What the political parties are saying ahead of Thursday's General Election

There are big differences between left and right on future energy policy, but the topic has not been on the election agenda

Party leaders, David Cameron, Ed Miliband, Nick Clegg and Nigel Farage
Party leaders, David Cameron, Ed Miliband, Nick Clegg and Nigel Farage

While energy has been at the centre of the political arena over the last few years it has been absent from much of the General Election debate. Peter McCusker gauges the views of regional experts on the main parties’ pledges.

Ed Miliband’s promise to freeze prices caught the popular mood 18 months ago as energy prices soared, but much of the heat has been taken out of the issue in recent months with oil and gas prices falling.

Nevertheless, it still features prominently as one of Labour’s main energy policy thrusts – now as a price cap - alongside a promise to totally decarbonise the electricity sector by 2020, establish an energy security board and insulate five million homes.

The Tories on the other hand seem to have gone cold on some renewable energy, announcing plans to phase out subsidies for onshore wind saying we can hit our carbon reduction targets by building more nuclear power plants and developing a home-grown shale gas industry.

The Liberal Democrats unveiled plans for five green laws on carbon emissions, transport, waste, buildings and nature. Unsurprisingly the Greens are promising to go further than any of the others and rapidly phase out fossil fuels and nuclear power.

They want to spend £85bn supporting renewable technologies and cut UK greenhouse gas emissions to 10% of their 1990 levels by 2030 to tackle climate change.

Meanwhile UKIP are saying pretty much exactly the opposite, announcing plans to repeal the Climate Change Act 2008 and axe so-called “green taxes” to cut fuel bills.

One of the region’s leading energy figures Prof Ian Fells, emeritus professor of energy conversion at the Newcastle University, says the reason there has not been much focus on energy during the election run-up is that ‘candidates don’t really know much about it or have been misinformed’.

He said: “While it may be a bit trite to say it is the elephant in the room, it is probably the case.”

He says Labour’s price cap promise may help keep prices down for 18 months but it has already had, and if implemented will continue to have, a major impact on the most important element of the energy trilemma – keeping the lights on.

He said: “These proposals have already led to investment drying up and may further hamper investment if they are introduced.

“There has been a lack of progress on number schemes such as the Hinkley Point nuclear plant and biomass plants in the North East.”

North East Chamber of Commerce policy and research manager Mark Stephenson highlighted Labour’s energy price cap and the Conservatives onshore wind reversal as policies detrimental to businesses in the region and nationally.

Like Prof Fells, he believes the price freeze promise spooked investors and will further damage investment if introduced, threatening energy security.

“By capping profits the policy will also cap investments and stop money coming into the sector. A further investment of over £200bn is needed in the sector over the next few years which will safeguard jobs, make energy more secure and help bring down prices, but this could all be put under threat if this Labour price pledge is introduced.

“Investors are becoming increasingly concerned at the tinkering and anti-business rhetoric. It is not helpful to be labelling the energy companies as greedy.

“Businesses and households alike face cost pressures for energy but the case for capping prices is far from proven and we call upon all political parties to be open minded on how we address this issue in a meaningful but also a sustainable way.”

However Labour says it will continue to support the current subsidy regime – introduced by the coalition under the Electricity Market Reform (EMR) programme - and encourage a more rapid deployment of renewable energy.

Its energy security board promise, designed to ensure a there is pipeline of investment in the sector, has been welcomed by industry.

Keith MacLean, policy and research director at big six energy firm SSE, said such an organisation ‘would be helpful’, but it must be ‘genuinely independent’ saying it could help attract investment in the sector.

The greening of our energy system is a policy playground for the Greens which wants to eradicate fossil fuels much quicker than any other party.

Labour and the Liberal Democrats take a less zealous approach, with the Lib Dems wanting to double the amount of renewable energy in the system by 2030 and Labour wanting to completely decarbonise power generation by 2030.

However Prof Fells has concerns: “All this renewable energy will destabilise the transmission system and wind power will have to be backed up by a reliable base-load power.

“While there are plans in place for a lot more nuclear power, and while we should be looking to develop a whole lot more it’s doubtful that is achievable in the timeframe outlined.

“It just doesn’t add up, and it’s disappointing that the energy community does not stand up and say exactly that. We are being misled by the politicians who are encouraging sincere people to believe these renewable myths as truths, when they’re not.”

Households are set to see the subsidies they pay for renewable energy double to £140 a year by 2020, challenging Labour’s position as champion of the billpayer.

While renewable energy supporters had argued these increases will be lower than the rising cost of fossil fuels the recent boost in supply from the US shale oil and gas industry means wholesale fossil fuel prices are now falling.

James Bryce, partner and head of the nergy team at Newcastle-based Square One Law, said: “Whilst this consumer facing Labour price-cap policy may be an astute political move, there is very little analysis of the effect of such intervention in the electricity trading market – a responsive market that relies on a freely traded commodity. This is also at odds with the higher costs required to achieve low carbon generation.”

However Paul Verrill, director of Yarm-based energy analysts EnAppSys, said: “The price cap will be a relatively easy promise to make the industry keep, if wholesale energy prices continue to fall and the costs from EMR do not start to kick in until 2018.”

Mr Stephenson said: “In order to hit our renewable energy targets we need to encourage the development of more renewables but the Conservative pledge to phase out subsides for onshore wind farms is a sop to its Home Counties supporters.”

Ian Marchant, former boss of SSE and now visiting professor in the Business School at Durham University, said it would be ‘bad news for British billpayers, costing hundreds of millions of pounds every year in more expensive alternative technologies’.

Labour argues that despite the cost of energy to the big six falling by 20% only a small percentage of this has been passed on.

The Conservatives and UKIP are both keen to see a UK shale industry develop and Labour and Lib Dems have both said they support the industry, but with additional caveats.

Both parties have many prospective MPs who share the views of the Scottish National Party (SNP) and the Greens who want to see fracking outlawed.

There is a similar outlook from the main political parties on the North Sea oil and gas industry with all backing the industry to maximise recovery reserves, while industry body Oil and Gas UK is expected to continue to press the new Government for further tax breaks to support these golas.

Simon Bowens, North East and Yorkshire regional campaign coordinator for Friends of the Earth, wants to see fracking outlawed. “We need to speed up our adoption of renewable energy and decarbonise the energy system by 2030.

“We should be supporting industry to move away from fossil fuels and target the transport system to get more people on public transport and active travel, such as walking or cycling.”

Viewing the parties’ policies through the prism of the energy trilemma - decarbonising the energy system, keeping prices down and keeping the lights on - then there’s little doubt that the left of centre parties come out ahead on the decarbonisation point.

But some say Labour’s interventionist shift to the left on energy prices is damaging investor confidence, and threatening energy security, although these claims could be countered by its energy security board pledge.

While progress with renewables will be slower with the right of centre parties, UKIP and the Conservatives seem to be placing more emphasis on keeping prices down in the long run and promoting energy security by delaying decarbonisation and encouraging shale gas.

With a hung parliament looming, Mr Verrill believes the outcome may be as follows: “A Conservative coalition that will seek to slow down the growth of renewables and have specific agenda on certain technologies, continuing with the EMR legislation to keep the lights on, and not setting 2030 carbon targets.

“Alternatively a Labour coalition with ambitious targets on 2030 carbon reductions, continuation of EMR and a radical shake up of the status quo of the industry but perhaps tempered by the coalition partners’ self-interest to preserve big employers in their country – the SNP.”

General Election energy pledges of the main parties

Conservatives

Phase out subsidies for new onshore wind farms

Invest £500m over the next five years towards making most cars and vans zero emission vehicles by 2050

Support fracking and nuclear power

Labour

Establish an energy security board - charged with planning and delivering the energy mix including renewables, nuclear, green gas, carbon capture and storage and clean coal

Freeze energy bills until 2017 and give energy regulator new powers to cut bills this winter

Reduce carbon emissions generated during electricity production to zero by 2030

Lib Dems

Double renewable electricity by 2020, and aim to decarbonise the power sector by 2030, leading to a zero carbon Britain by 2050

Five green laws on carbon emissions, transport, waste, buildings and nature including a legally binding recycling target of 70%.

Use 50% of fracking tax revenue for green energy.

UKIP

Scrap the 2008 Climate Change Act and the EU’s Large Combustion Plant Directive

Support fracking for shale gas

End subsidies for wind turbines and solar photovoltaic arrays

Greens

Phase out fossil fuel-based energy generation and nuclear power

Reduce all UK greenhouse gas emissions to 10% of their 1990 levels by 2030 to tackle climate change. Invest in renewable energy sources, flood defences and building insulation

Ban fracking

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