Greatrex: Has Rudd offered a policy ‘reset’, or merely a ‘re-statement’?

In these pages, back in July, I suggested the political circumstances could hardly be more benign for Amber Rudd and the government to set their energy policy agenda for at least a decade ahead.

In announcing cuts to support for onshore wind, solar and getting rid of the unlamented Green Deal, the Energy Secretary moved quickly – no doubt with the approval of the Treasury – to set out what, governing with a majority, she didn’t want, but had said much less about what she did want instead.

Against the backdrop of sharp criticism and a dramatic fall in investor confidence which seems to have surprised Ministers, there have been weeks of speculation about a major speech from Rudd to “re-set” the government’s policy objectives and give industry a road map into the 2020s.

Last month, it was suggested that the “re-set” would strongly advocate demand management above new generation capacity. But a fortnight ago, as National Grid’s first NISM [notification of inadequate supply margin] for a few years got predictable crisis headlines, it had been downgraded to a “soft re-set”.

This week, despite the efforts at spinning as something more substantial, what we eventually got was mostly a re-statement of existing policy.

With the exception of a few bizarre weeks in 2013 (when former Energy Minister John Hayes was boasting about putting the coal back into coalition), unabated coal generation coming offline by the mid-2020s may be a pre-Paris climate talks friendly notion, but is not really more than a statement of what will happen anyway.

Seeking to emulate the USA by replacing coal with gas generation to reduce emissions is hardly an original sentiment either. Musing on having an independent systems operator, to remove perceived conflicts of interest at National Grid, will be familiar to those who followed the detailed discussions of the 2013 Energy Act, when exactly that was suggested by the opposition.

Of course, it is much easier to advocate more effective use of technology, embracing demand reduction, prioritising international interconnection and distributed energy as alternatives to new generation capacity from the safety of academia or on planet think tank, than when faced with the harsh realities of being held responsible for keeping the lights on.

Particularly when a couple of weeks ago the combination of unplanned unavailability of thermal plant and a sustained high pressure weather system across much of northern Europe led to Grid issuing a NISM notice. Little matter that the intervention worked as intended, and the lights stayed on, the resulting headlines will not have encouraged boldness and long term thinking in Whitehall.

Rather, we have the familiar reiteration of support for an electricity supply mix of new nuclear, offshore wind (provided cost reductions continue) and gas generation replacing coal. Even for those who broadly accept the pragmatism of the approach, key questions remain unanswered.

There has been no suggestion of how the capacity market will deliver investment in new gas where it has failed to date, no indication of the size of the levy control framework post 2020 and little confidence for offshore wind developers that warm words today won’t give way to similar antipathy to that directed at onshore wind in recent months.

Ministers may find that it is answers to those questions of substance which will have more impact on repairing investor confidence than this week’s speech, however carefully crafted and extensively spun.