Greg Barker: Clean energy subsidies tops list of challenges for DECC

That’s the warning of former Climate Minister Greg Barker, who believes Amber Rudd was a “fantastic choice” as the new Secretary of State at DECC, but a number of pressing matters will make for a challenging time in office, with the LCF budget sitting top of the pile.

Speaking exclusively to edie this morning, Barker said: “I was really pleased to see Amber Rudd given that well-deserved promotion – she has real grit and this is an area she is genuinely passionate about. Having an all-women ministerial team in the commons is fantastic and I think we’re going to see some outstanding leadership there. But they do face some tough tasks ahead.

“I think the big challenge for the Department is going to be the Levy Control Framework. We took the decision in 2012 to provide clean energy subsidies through to 2020, mapping out £7bn to support the deployment of renewables over the period.

“But such was the success of the coalition in deploying clean energy; we are now racing through that budget at a rate of knots, and questions are now being asked as to how we manage the remaining budget within that envelope.”

Squeezing subsidies

A tighter LCF budget could cause a number of issues for clean energy producers: some large-scale renewable energy projects could be sidelined without additional funding; while a cap could force DECC to impose big subsidy cuts on small-scale renewables through the feed-in tariff scheme.

“The challenge will be to drive down costs even further; to squeeze subsidies even harder to ensure they are spread as widely as possible and we get the maximum deployment for the money,” Barker added.

Having retired as an MP at the end of March, Barker headed up DECC in the last Conservative Government; overseeing a big expansion of decentralised energy along with the development of some world-firsts, including the Renewable Heat Incentive (RHI) and the Green Investment Bank. More recently, he served as David Cameron’s personal ‘Climate Change Envoy’ in the run-up to the General Election.

Barker also oversaw the launch of the Green Deal energy efficiency scheme in 2011. But take-up figures have been far less than the Government hoped, posing another trial for Rudd and her team.

“The policy framework for the Green Deal is broadly in the right place,” Barker explained. “But the thing I misjudged was expecting the ‘Big Six’ to come forward with an effective green deal offer when in actual fact the most impressive green deal offers came from the smaller entrepreneurial companies.

“We need a more thoughtful approach to how we’re going to manage the Energy Company Obligations (ECO) scheme, to get away from this rather blunt giveaway culture of the low-end energy efficiency measures.”

Optimism

Perhaps the biggest task for Rudd this year will come when she represents the UK at the UN Climate Summit in Paris in December – a summit widely-regarded as the most important in the history of human civilisation. But Barker is confident that Tory Party will stay true to its manifesto promise to “push for a global climate deal”.

“It’s what all of their efforts are going to be focused on – delivering an ambitious agreement. I’ve no doubt that’s what the Prime Minister will be telling the G7 when they meet in Germany next month. The appointment of Amber Rudd and the commitment of the Prime Minister to reinvest in the green agenda confounded the critics, the sceptics and the doom-mongers and I’m very optimistic about the next five years.”

Barker was speaking to edie following an announcement that he has joined the board of trustees at The Climate Group, the international not-for-profit organisation which supports government and business leaders on climate change and the low-carbon economy. He will be supporting The Climate Group on its RE100 renewable energy initiative for businesses, and mobilising public and private climate finance for the developing world. 

Luke Nicholls