Energy Bill is ‘fundamentally flawed’ says Tim Yeo

Tim Yeo slammed the Government today for its lengthy development of the Energy Bill and labelled it "fundamentally flawed" by the weakness of its demand side measures.

Speaking at the Energy Market Reform Summit in London today, Yeo outlined the recommendations made by the Energy and Climate Change Committee following its consultation of the draft bill last year.

He was quick to point out the extensive period of time it took for the Government to release the draft Energy Bill and the conflict within Government and between the Treasury on energy policy.

“The Energy Bill had a gestation period comparable to the pregnancy of an elephant but with rather more disappointing conclusions” he said.

“We were hampered by the fact that the Treasury refused to field a minister to answer perfectly legitimate questions and it is clear the Treasury has driven policy which is reflected in the bill and has overruled, as far as I can tell,” he added.

He raised concerns, by suggesting that the Bill was flawed because it did not encourage investment through measures that emphasize the financial savings that can be made through energy efficiency.

“Even those people that do not except the science behind climate change, even those people that have no enthusiasm for investment in low carbon technology have to acknowledge that there is an economical case for more investment in energy efficiency”.

Regarding the potential of the Energy Bill, Yeo said more needed to be done to encourage businesses, as well as homeowners to invest in energy efficient measures.

Yeo also highlighted the need for the Energy Bill to include a Feed-in-Tariff (FiT) for energy efficiency.

“I hope we will achieve this – it’s an interesting possibility and it would sit very comfortably in a very welcome way alongside some of the Feed-in-Tariffs of other forms of energy generation” he added.

According to a report published last year by the Green Alliance and WWF-UK, the introduction of electricity efficient FiTs could reduce the UK’s electricity demand by 40% by 2030, saving in excess of £10bn per year.

However, Yeo, the chair of the Energy and Climate Change Committee, did commend the Government for listening to some of the committee’s recommendations, especially around the Levy Control Framework, which controls expenditure on renewable energy that can be levied through energy bills.

“The Levy Control Framework was absolutely crucial in our view to give investors the confidence they needed and some good progress has been made on this. In November, the Government set the Levy Control Framework at £7.6bn, which is more than three times the current level. It’s a realistic rate of increase and it’s a realistic figure in our view” said Yeo.

“We now have a realistic framework within which realistic progress and decisions can be made on a rational basis”.

Looking into the future costs of renewable energy, Yeo was satisfied that low carbon technologies would reach an affordable level.

“The probability is that the cost of some forms of low carbon renewable energy will fall substantially further in the period between now and 2020 and we may reach a situation where, for example, onshore wind needs no extra support at all and can compete economically with fossil fuel generation,” he added.

“That’s when we will hope to see the same sort of progress in solar and some forms of waste and energy which should be in much stronger positions by the end of this decade,” said Yeo.

The chair was not as confident about the current situation for wave and tidal technology.

Yeo told edie that the increase was far too costly as the Government looks to raise the technology to five Renewable Obligation Certificates (ROCs), from two.

“Because of this wave and tidal will not form a significant part of our energy mix for the next 10 years.

“However, it is good that Britain is one of the leaders in international research in this area and if we can crack the costs, tidal particularly, and probably wave as well, is a fantastic resource but at the moment is completely unaffordable,” he added.

Leigh Stringer

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