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Charles Hendry MP: Why we shouldn't put a decarbonisation target in the Energy Bill this week

HENDRY CHARLESCharles Hendry is the MP for Wealden and is Chairman of Forewind.  He is a former Energy Minister.

As we wrestle with the joint challenges of delivering energy security in a low carbon and affordable way, the Committee on Climate Change’s latest report is a timely reminder of what is at stake.

To deliver on those aims, we have to rebuild our energy infrastructure, making up for a dismal failure to over past years secure the necessary levels of investment, and the Energy Bill, currently before parliament, is a vital instrument in securing that investment.

One of the key decisions for Parliament now is to decide whether we need to include a formal decarbonisation target in the Bill.  As an enthusiastic supporter of a low-carbon economy, I don’t think we do.

The case for the target is less about new low-carbon electricity generating plant - as there are other specific contractual measures in the Bill to deliver this - and more about the vital need to secure industrial jobs in the UK to build that infrastructure.

It is good for Ministers to challenge people to raise their aspirations and ambitions, and targets are part of that process, but they can only be relevant if we know how to meet them.  As a Minister, I always questioned targets where there was not a 'roadmap' for delivering them.

The challenge with a decarbonisation target set now for 2030 is that we cannot yet know how it can be met - or indeed, if it can be met.

Nuclear may not happen on the scale hoped for - and it is hard to see how we can meet a decarbonisation target without new nuclear.  Some of the emerging renewable technologies, such as offshore wind and tidal, may remain too expensive, and we don't yet know if their costs will come down to make them affordable for consumers.  Carbon Capture and Storage, which could give a low-carbon future for coal and gas, has yet to be proven commercially, and we don't yet know if it would cost. Unabated gas is relatively plentiful and is certainly lower in its carbon intensity than coal, but on its own would not enable us to reach the low level of emissions which the 2030 target would be likely to require.

My difficulty with the target, therefore, is that we would be requiring it to be set without knowing that it can be met, and that cannot be a responsible decision for government to make, when the costs of getting it wrong would have to be picked up by consumers for decades to come.

On the other hand, a target could clearly help secure the industrial renaissance a low-carbon economy could deliver.  We all want to see jobs in the construction and the supply chain come to the UK, but companies are unlikely to invest unless they can see an order-book going well beyond 2020 and out to 2030.

Yet the decarbonisation target does not deliver that certainty.  Certainly, it says there needs to be new plant built, but no one can know which technology would deliver it.  Investors will still require a clearer understanding of the likely market in the 2020s if they are to proceed, and so a clear agenda, as in the forthcoming offshore wind industrial strategy, is actually going to be much more important than a general amorphous target.

So whilst I understand the ambition behind the proposed decarbonisation target, I also recognise that it has consequences which have not yet been thought through.  Ultimately, energy security and our low carbon future depend on clarity for each technology, not on a lofty ambition which no one knows how it can be delivered.


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