Who’d have thought it? The medievalists at Greenpeace have finally made a useful contribution to the energy debate by insisting Britain has two energy policies. They’re right.
As the ideological fault-line in the UK coalition government is increasingly laid bare by the in-fighting between (Conservative) Chancellor George Osborne’s Treasury Department and (Lib Dem) Ed Davey’s Department of Energy and Climate Change (DECC), the signs are that a new economic energy realism is also biting in Europe.
In late July Davey’s DECC won a pyrrhic victory against the UK Chancellor’s Treasury Department keeping a proposed cut of 25 percent to wind subsidies to a mere 10 percent. But the price for Davey was green-lighting a UK government push in support of natural gas; a move that will, ultimately, prove devastating to the anti-fossil fuel ambitions of Davey and his Lib Dem colleagues’ policies – although not for the free market and the UK economy.
UK onshore wind farms still depend on the lifeline of 100 percent taxpayer subsidy, with offshore running at around 200 percent. In 2012, UK wind farm subsidies will hit £1 billion for the first time. With end consumers footing the tab for this exercise in ideological economic plunder, power companies and wind farm developers alike are clearly greatly ‘incentivized’ to maximise their windfall ‘dividend’. According to Renewable Energy Foundation (REF) figures, current renewable energy targets are on course to provide the power companies with a windfall of £100 billion from the subsidy regime by 2030. The top ten wind farm developing companies are set to net a mere £800 million between them in the next year alone. The Danish company Dong is the chief beneficiary of this government largesse, expecting to rake in over £156 million. And that’s before the additional guaranteed profit from its power sales to the National Grid via the market-skewing Renewables Obligation scheme, which guarantees ‘green’ electricity producers a fixed price.