BEIS formation ‘makes complete sense’ for the green economy, says Aldersgate Group

EXCLUSIVE: The creation of the Department for Business, Energy & Industrial Strategy (BEIS) provides a key opportunity for Britain's energy-intensive businesses to develop and deliver ambitious low-carbon strategies, the Aldersgate Group's executive director has told edie.

Speaking ahead of the forthcoming return of MPs to the House of Commons for the autumn Parliamentary session, Nick Molho stated that the replacement of the Department of Energy & Climate Change (DECC) with the business-focussed BEIS has the potential to “build bridges where previously there was tension”.

Molho, whose Aldersgate Group represents the leaders from business, politics and civil society to drive action for a sustainable economy, also cited the inextricable relationship between energy and climate change issues and the UK economy as sensible rationale for this departmental alignment of business strategies with low-carbon operations.

Missed opportunity

Asked about his thoughts on the BEIS formation, Molho said: “I think it’s a good thing. Looking back at the past 10-15 years, climate change and, to an extent, energy policy has seemingly developed separately from other big business and economic decisions in Government.

“Given that the low-carbon agenda and climate change initiatives are fundamental to the way we run the economy and do business, I think that merging climate change, energy and industrial strategy all together makes complete sense.

“In the past, there have been concerns about how the energy-intensive sector will be impacted by the UK energy policy, and one of the things that was rarely talked about was how we could create an industrial strategy that could provide support for the energy-intensive sector in the short-term, whilst supporting their inclusion in the low carbon supply chain.

“Clearly, the need for a low-carbon industrial strategy that includes the UK’s energy-intensive sector has been seriously overlooked. I’ve always said that there’s been a missed opportunity – you need a significant amount of glass to have well insulated, energy efficiency houses; you need a lot of steel to build offshore and onshore wind turbines; you need concrete for offshore wind foundations.

“By looking into the long-term, BEIS could ensure that the UK’s energy-intensive industry could be incorporated into a low-carbon supply chain.”

‘Chance to make it right’

Molho’s sense of optimism regarding the new Department’s potential to facilitate business-led climate action has not been matched by figures from within the energy-intensive sector itself. Recent research has in fact shown that the majority of large business energy users fear that the recent removal of DECC will leave climate change “swept under the rug”.

In the wake of Prime Minister Theresa May’s on-going indecision over the Hinkley Point nuclear project and the ever-uncertain future of renewables in the UK energy mix, business have urged the Government act swiftly to provide industry and investors with the long-term certainty they need to plan with confidence for the future.

While Molho agrees with green businesses and MPs alike that the Government should provide clarity for investors by defining its position on some key green policy issues, the Aldersgate Group director remains upbeat that the emergence and continued development of clean energy technologies such as demand response and offshore wind, in addition to the approval of climate-related legislation such the Fifth Carbon Budget, will keep the green economy high on the national agenda.

“At the moment, there is a certain level of uncertainty -you can’t really argue with that,” Molho said. “Then, you throw Brexit into the mix and it gets amplified.

“I don’t feel ‘positive’ about the current state of policy but I feel positive about the opportunity to make it right in the coming months. Thanks to the adoption of the Fifth Carbon Budget, we now have a clear objective to aim for the next 15 years. Now that we have a clear commitment to cut emissions in place, we need an emissions reduction plan to deliver on that.

“The big question now is: ‘how solid and detailed is this emissions reduction plan going to be?’ We need a clear sense of direction for the low-carbon power, heat, transport and energy efficiency sector for the next 15 years.”

The House of Commons returns from its summer recess on 5 September.

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George Ogleby

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