UK Energy Secretary Ed Davey

Coalition 'united' on UK energy sector reform

The UK’s Energy Secretary says the Coalition is ‘united’ behind plans to reform the UK’s energy sector.

Davey told a meeting organised by business group the CBI, which has called for "less politics, more policy" over energy, that the Government would deliver the certainty to ensure investment in low carbon power while keeping the lights on.

But he gave no further information on a surprise announcement by the Prime Minister that the forthcoming Energy Bill would force companies to give consumers the lowest possible tariff, as opponents claimed the policy was "unravelling".

The Energy Bill is set to be published next month, following apparent divisions within Government over favouring a new "dash for gas" or driving forward new low carbon electricity with targets to decarbonise the sector by 2030.

Davey said: "I believe a strong case has been made by many investors in energy infrastructure for a decarbonisation target range for the power sector.

"Such a range would help make clear our continued commitment to our climate goals."

In the face of claims of a Cabinet split over the Energy Bill, including over the inclusion of the target to slash emissions from the electricity sector by 2030, he said: "I can say with confidence that the coalition is united behind these energy market reforms."

But he would not be drawn into revealing whether a 2030 target had been agreed.

At the event, CBI deputy director-general Dr Neil Bentley said investors were not looking for more targets, but for detailed policy and a clear political message.

He said: "We are seeing UK energy policy get increasingly political.

"Are you for green or for growth? Are you for renewables or for gas?

"Fruitless debates over these false choices can seem like they're just noises off, but they really matter.

"With every new story that adds to the sense of uncertainty, I hear of more phone calls from overseas head offices to UK executives asking whether it is worth putting further work into scoping out possible investments in the UK."

He said the most cost-effective way to cut emissions was a diverse energy mix, including new nuclear reactors, renewables and new gas power.

And he warned that while the Government was right to encourage "safe" extraction of unconventional shale gas to maximise domestic energy supplies at reasonable cost, gas alone was not the answer as prices were likely to rise.

Nicolas Molho, head of energy policy at WWF-UK, said: "With three major investors having already shelved their planned investments in UK offshore wind factories over the last six months alone, it's high time for the Government to speak with one voice on the need to support our renewable energy sector and introduce the strong Energy Bill we need to decarbonise our power sector by 2030.

"Failure to do this in the very near future will result in the UK missing out on a major economic growth opportunity."

At today's meeting on the Energy Bill, Davey also distanced himself from reported comments by Chancellor George Osborne describing the green lobby as the "environmental Taliban".

He said he found environmental groups to be "extremely constructive and helpful", even if he did not always agree with them.

"I believe they have campaigned effectively and represent not just their members but a wide section of the population, and environmental NGOs (non-governmental organisations) have a really important role to play in the climate change and energy debate," he said.

Four major environmental groups - Greenpeace, Friends of the Earth, RSPB and WWF-UK - have written to the Chancellor challenging him over whether he had referred to parliamentary climate campaigners as "the environmental Taliban".

In the letter, signed by the heads of the four organisations, they call on Osborne to confirm or deny the reports, and if they are accurate, specify which MPs, individuals or organisations he was referring to.

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