Last Thursday UK Energy & Climate Change Secretary Chris Huhne MP spoke at an event on the Green Energy Economy organised by Newcastle Liberal Democrats (full disclosure: I’m a party member and councillor). Compared the the usual shallow platitudes that MPs of all persuasions trot out about the green economy, Huhne gave the audience a pretty heavyweight discourse – maybe a bit too technocratic at times for parts of the audience – on the current state of play, what the Government is trying to achieve, and how it is trying to achieve it.
Huhne is an economist by background, and the really interesting part of the speech for me was his opinions how countries get out of economic slumps. He argued that it was never the prevalent industry of the time that got the economy going again, but fast growing emerging sectors – such as the motor industry in the 30s taking over from heavy engineering. The green sector is one of the fastest growing at present, so that’s why the low carbon economy is one of the main thrusts of the Government’s growth strategy.
On his energy sector reforms, he argued that, while consumers would find a 7% increase on the cost of each unit of energy consumed, once you factor in energy efficiency measures such as the Green Deal, the average bill should go down. This fact was, he said, being deliberately ignored by sensationalist elements in the press.
For a heavyweight speech, we had an appropriately heavyweight audience with at least two University Profs, a clutch of top businessmen from the region and quite a few students taking sustainability-related courses. Unsurprisingly, the questions were excellent – here’s a summary of them along with Huhne’s answers (both paraphrased – any errors are mine):
Q1. When you implemented the previous Government’s Feed-in Tariff scheme, why did you cap the amount of tariff available and the size of the installation.
A: In the time between the previous Govt designing the scheme and it coming on line, the cost of solar panels in particular has fallen. The profit margin would have been excessive given that ordinary consumers are footing the bill, in fact a ‘dash for solar’ could have caused significant economic hardship to people who are already feeling the squeeze. So [Huhne] had to scale the FiT back to give a good, but not excessive, return and cap the total to protect the consumer. The department is currently working on a more intelligent system which would track technology costs automatically.
 Q2: Industry doesn’t feel the Govt is sending out a consistent message and won’t act until it hears one.
A: Everything in the coalition agreement on the environment has either been implemented or is well on the way, plus the renewable heat initiative which wasn’t in it. While some policies have had to evolve, such as FiTs, there has been no inconsistency of purpose, despite what you may read in the press.
Q3: Subsidies for biomass energy could kill off the panel board industry which relies on a source of clean recovered wood.
A: There is plenty of biomass available, but the supply chains are weak. The answer is to develop the supply chains, rather than scale back biomass energy.
Q4: All these technologies require a huge amount of public subsidy – is this sustainable?
A: Public subsidy is required when a technology is immature. Costs are falling fast eg cost of solar is dropping by 6% year on year – so the cost differential relative to other forms of energy will soon disappear. We need more onshore wind as that is the most cost-effective and [Huhne] thinks the turbines are beautiful (Huhne cracks joke about having been booed at other events for saying that [and he consequently took flak in the local press]).
Q5: Are you squeezing out energy intensive industries like steel and aluminium?
A: Nobody wants these industries to simply disappear overseas as there would be no ecological benefit – and we need steel in particular to build more wind turbines. [Huhne] and Business Secretary Vince Cable are currently putting together a strategy for such industries.
 
Overall, Huhne was very well received and it was great to hear both the Government view directly and his response to tough expert questions, as opposed to his message being ‘filtered’ through an often cynical media (whether pro- or anti-green).
Picture courtesy of Tracy Connell