Don’t Crack at the Crunch


If the British Prime Minister were being authentic, he could be leading on an impressive story right now. Those of his core mantras that involve energy, taken together in strategic harness, make for an inspiring vision. Picture the scene. His Big Society concept sees communities taking power for themselves, providing for themselves. In short, Britain could be less centralised, more community-centric, more resilient to economic shocks.

His ‘green industrial revolution’ idea envisages fast-growing green British companies making jobs that counter the unemployment created by the austerity programme. Britain would become more energy-independent, less likely to be held to ransom by overseas energy producers. We would be importing fewer energy goods and services because we would have domestic supply chains. His ‘green deal’ would witness the empowering of a citizen-led drive to cut national energy requirements, and hence both emissions and fuel poverty, while providing yet more jobs with which to countervail austerity. His ‘green investment bank’ would underwrite much of this, setting an example that might even encourage conventional bonus-cult banks to confront their lending responsibilities in defence of the national economy.

Now for the reality check. Needlessly deep cuts in feed-in tariffs mean that many communities who planned renewable-energy projects won’t be able to deliver them. The cuts also mean that the fast-growing British renewables companies of 2011, many of them potentially set to be leading lights in the green industrial revolution, will find themselves having to shed thousands of jobs in 2012.

None of this is necessary. The feed-in tariffs levy a tiny sum on bills to pay premium prices for renewable electricity: just fifteen pence a month per household for the first fifteen months of the scheme. This could easily be offset by green-deal financing of energy-efficiency measures, which offer great potential for quick paybacks. But the green deal as it is falls far short of the house-by-house, street-by-street measures that the UK’s brewing energy crisis merits.

As for the green investment bank, it will not be able to lend at the volume needed to get green infrastructure going because it will not be permitted to borrow. And the bonus cultists, who contribute heavily to the Conservative party coffers, go about their business the same as they ever did, essentially unregulated.

As I experience the energy front lines, there is a kind of civil war under way at the moment in Britain. The nuclear and oil-and-gas industries are telling Government and the civil service directly – and indirectly via stories in the right-wing press – that they don’t need meaningful renewables in the mix. ‘Renewables will sour the nuclear renaissance,’ they say. ‘The unconventional gas-via-fracking story offers huge supplies of cheaper fuels.’

They pay PR agencies – propaganda hired guns – to design and execute campaigns that show renewables in their worst light. These campaigns do not stop short of lying. The biggest narrative they are pushing at the moment is this: green measures such as feed-in tariffs are behind soaring domestic energy bills. The truth is that it is the rocketing price of conventional power – not to mention recurrent Big Energy profiteering – that mainly drives energy prices up. But if the Daily Mail says something loud enough, often enough millions will believe it.

Thus, despite conventional energy’s setbacks – post-Fukushima national nuclear phase-outs, states banning fracking – the nuclear and gas industries are being surprisingly successful. Feed-in tariffs are being cut savagely, instead of in steady increments, as is supposed to happen, because Big Energy insists on it. This isn’t just happening in Britain: investors are losing faith. Articles appear with headlines like ‘Why Wall Street Hates Solar Stocks’. The whole process becomes self-intensifying.

There are days when one would never guess that Deutsche Bahn have targets and timetables for running the whole German railway system on renewables; that solar and wind have contributed more than half of new generation in the last two years in the US and EU both. Or that finance consultants Ernst & Young are among those predicting that solar electricity will be cheaper than conventional electricity as soon as mid-decade, and that the US solar industry now employs more people than the steel industry – and so on.

The Chancellor is now among those playing to the political gallery in professing that greenery is expensive, and that feed-in tariffs will bring fuel poverty to households. The reverse is true: a strong renewables sector in the mix will bring relative prosperity and fuel security, if we keep the faith over the next few years and fashion a glide path to grid parity and zero subsidy. Not the cliff-like market-staller cuts most Big Energy companies are urging on their side of our life-and-death intra-energy struggle.

More than that, a focus on renewables would allow the Government to deliver on some of its cornerstone mantras. Renewables empower communities, and do so quickly: it’s the Big Society at work. British clean-energy companies are operating in relatively job-rich industries that create employment fast: it could be the green industrial revolution and the green deal writ large.


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