The proposed amendment to the UK Energy Bill recently launched by Conservate MP Tim Yeo has been defeated by 290 votes to 267 after being heard in the House of Commons. If successful, the amendment would have forced the government to adopt a 2030 decarbonisation target for the energy sector. Mr Yeo is the Conservative chair of the House of Commons Energy and Climate Change Select Committee.
Various LibDem MP’s joined a number of Conservatives in support of the amendment and more MP’s decided to vote in favour at the very last moment, however unfortunately it was still not enough to affect the final vote thereby leading to a narrow escape for the government. The Coalition managed to convince enough LibDem backbenchers to move against the amendment as part of a LibDem bargain with the Conservative Chancellor George Osborne. The payoff was financial support for clean energy through to 2020 made in exchange for a two year delay on the decision whether or not to adopt a decarbonisation target.
Many businesses in the clean energy sector will see this as a major blow given that the success of the amendment would have meant billions of pounds of investment in renewable energy, particularly the supply chain. In his introduction Mr Yeo warned the house that the Treasury’s obsession with gas power had already led to “doubts in the minds of many prospective investors about the depth of the government's commitment to decarbonising electricity generation.”
“Doubts about whether a future government will stay committed to supporting low carbon technologies after 2020, fears that instead it will bet the farm on another dash for gas, and a lack of clarity about the level of strike prices to be proposed for the new Contracts for Difference regime have all unsettled investors” Mr Yeo added. “The only certain consequence of this is that investment will be slower and the risk of a capacity crisis greater.”
The clean energy sector in the UK has consistently argued that a decarbonisation target would provide the policy stability the sector needs in order to encourage further investment and to avoid the risk of clean energy businesses relocating overseas. Mr Yeo stated that this would in turn force the UK to remain reliant on fossil fuel infrastructure for at least another generation.
Energy Minister Michael Fallon rejected this argument insisting that the government’s carbon budgets already provided investors with the certainty they need. Despite failing in the House of Commons, green campaigners still believe the amendment could succeed in the House of Lords where there are a number of potentially rebellious LibDem and Conservative peers. If the Lords approve the amendment, it could be passed back and forth between the houses until a compromise is reached with the government making some kind of concession or even forcing the legislation through with the aid of the Parliament Act.
The Renewable Energy Association (REA) has responded to the defeat in a specially released statement on the matter.
REA Chief Executive Gaynor Hartnell said: ““Today’s vote is disappointing. It makes an EU-level renewables target for 2030 even more important, something the ‘greenest government ever’ is also opposing in Europe. Failing to decarbonise our electricity supply industry will have long term consequences both environmentally and economically. The Government’s own advisors, the Committee on Climate Change, state that relying on gas will only save the country money in a scenario of low gas prices, whereas switching to renewables would save the country £25 to 45 billion by the 2020s.”
The REA argue that a decarbonisation target would help to deliver £110 billion worth of investment that the sector needs by 2020.
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