Editor’s letter: Scant reason to be cheerful

The energy sector is searching for positives as political disruption take uncertainty to new heights

“I got us into this mess, I’ll get us out of it.” So Theresa May reportedly told Tory MPs in a meeting following her crushingly underwhelming performance in the snap general election.

Energy sector leaders may well feel this apology is owed as much to them as to seething Conservative MPs who saw a relatively “strong and stable” parliamentary position disintegrate in a few short weeks.

Before the election, experts moaned about a lack of consistency in energy policy. They pointed to sudden shifts in ground, such as the withdrawal of Levy Exemption Certificates (LECs) and support for onshore wind, as evidence of knee-jerk decision making. And of course many energy retailers expressed horrified disbelief that the traditionally pro-market Tories would commit to introducing price regulation.

But despite these problems, there was also a feeling of hope that a more coherent policy era might be around the corner. The creation of BEIS, although it raised fears about the sidelining of climate change, was generally met with optimism. It heralded joined-up thinking that could place energy at the heart of economic rebalancing. It even began making good on this potential with consultations on industrial strategy and smart, flexible energy systems, which prominently recognised the importance of investment and innovation in critical national infrastructure.

Now, with a minority government clinging to power, optimism is thin on the ground and uncertainty has reached new proportions. There is no clarity on when, or if, key policy decisions will be made. There is no confidence that our minority government will be able to pass key policy and legislative decisions through the House of Commons. There is a grim acknowledgement that another election may be just around the corner and that Labour’s strong performance this time round could translate into renationalisation becoming a reality.

In the short term, there are some positives to keep in sight. First, Greg Clark has remained at BEIS. The energy secretary, who is widely respected by industry, had been tipped for a promotion to chancellor if May seized a big majority. Second, Nick Timothy, May’s top adviser, whose influence underpinned the party’s increasingly intransigent line on price caps, has quit. Third, a hard Brexit, with exit from the single energy market and Euratom, is now less likely.

For many, these will seem a scant silver lining. But it is there.