Energy policy ‘unmatched in uncertainty and chaos’: former WEC chair

Britain’s energy policy is unmatched in terms of “uncertainty” and “chaos” according to a former chair of the World Energy Council.

Speaking at an event on investor confidence in London earlier this week, Sir John Baker said: “What has happened is at every decade, or every change of government, the priorities have changed, the support system has changed, the structure of bringing things into the market has changed.”

The current government implemented a raft of reforms to energy policy after coming to power in May, among them axing the competition to develop carbon capture and storage and bringing an early end to the Renewables Obligation for onshore wind and solar. A recent report by the Energy and Climate Change Committee said such changes had left investors “spooked”.

“Where we are today is pretty well unmatched across the energy universe that I know in terms of uncertainty, and I would even use the word chaos, in relation to energy policy,” Baker told the audience.

He said investors in the renewable sector have often got to the end of four or five year projects and found “the whole market has changed and the whole exercise has been aborted.”

“We must have consistency and continuity to de-risk the market,” he added.

Baker said Britain had been “bedevilled” by regulatory uncertainty. He recalled how the initial focus on competition when the energy sector was privatised had given way to focus on consumer protection “for obvious political and media reasons”.

He also noted that Britain had brought back capacity payments after getting rid of them a number of years ago. “Where is the consistency of thought?” he asked.

Despite his frustration with changing policy, Baker argued the government could not stand aside and leave things to the market. He said although it should not be picking winners, it must “set a framework that’s going to last longer than the life of an energy minister” and “find a way still to get big projects through the planning system”.

Fellow panellist and former energy minister Charles Hendry agreed: “No secretary of state will ever leave this to the market. Some people say let’s go back to the time when the market delivered it all.

“That was a short period of time. That was the aberration. The aberration is not government getting more involved in energy policy now, because it’s simply too important.”