Former MP Alan Simpson says the UK should follow Germany's example on feed-in tariffs and support decentralised energy
David Cameron should not be surprised that his 'green' credentials are to be legally challenged by the community energy schemes he directly pledged to support.
The PM may have a solar roof on his own home, but he wants to prevent most others from doing the same. Specifically, he wants to make sure the poor can't join him.
For a government with not much to boast about, it is either clumsy or cynical to cut a scheme because it is becoming too successful... especially when it earns more than it costs.
The government plans to make swingeing cuts in its 'Feed-in-Tariff' (FITs) programme promoting solar energy. The Coalition has announced a ‘consultation' about the cuts, but the cuts kick in two weeks before the consultation closes. Nice one Dave. No wonder there is a legal challenge.
Under the FITs programme, people who put solar roofs on their houses get paid for the clean energy they produce. It has also created 25,000 jobs in the last 18 months. The Coalition Agreement even pledged to make this the centrepiece of their commitment to ‘community owned renewable energy generation'. You would never guess it now.
Hundreds of community energy cooperatives formed around the country, following Cameron's rallying cry to follow his lead. Most see their plans being torn to shreds. Many face big financial losses on agreements they entered into, but which become unviable after the cuts.
To conceal this cock up, Ministers and officials have begun a ‘black propaganda' campaign against their own scheme. FITs are whispered to be ‘an unreasonable burden on other people's energy bills'. If that doesn't work on you, the criticism turns to 'an indulgence to the rich, at the expense of the poor.' Mick Jagger has a solar roof. So does Guy Richie. Say no more, it must be eco-bling and nothing else.
If 'bling' was all it was, believe me, Ministers would have left everything in place. The real story behind the cuts is more about large scale government dishonesty than small scale indulgences.
Britain's FITs programme is a pale imitation of the German one. Already, millions of Germans produce (renewable) energy from the roofs of their homes, schools, libraries and workplaces. In Opposition, both the Lib-Dems and Tories dismissed the Labour initiative as pitifully unambitious. In government, they pledged to do much more. Now, the rush is to find cover for an ignominious retreat.
Ofgem, the energy regulator, estimates that FITs might add £1 a year to everyone's energy bills. Its only might because other studies say the Treasury gets more back in tax and NI (from the jobs created) than it costs to run the scheme. Either way, it is not a sum around which the economy will crumble. So who benefits from a huge furore about whether this £1 is affordable or not? The answer is the people who have just added £175 to your annual energy bill; the Big 6 energy companies.
Ministers flip-flop their indignation about energy price rises, but do nothing to halt the bump in profits energy companies have pocketed from each of us; up from £15 per household nine months ago to £125 today. Instead of tackling the big guys, Ministers have picked a fight with the small kids at the other end of the playground.
In practice, it means picking on housing charities, community cooperatives, local councils and assorted social landlords; all of whom wanted to join Mick, Guy and David, in using solar roofs to cut over 30 per cent off household electricity bills. They just want to do it for the fuel poor rather than themselves. None of these schemes will be affordable after the cuts. The cuts are designed to ensure this.
To avoid an embarrassment about how the Treasury have completely messed up the organisation of the programme, Ministers decided that it is just easier to exclude the poor from the game. So, tens of thousands of tenants, in the country's coldest homes, will be left out in the cold. It would be easy to put this right, but to do so would upset the big energy companies. This is where the root of the problem lies.
As an MP, I helped push amendments into the Energy Act 2008 that are (belatedly) bringing Britain into the renewable energy revolution. Energy companies hated the changes because they involved a transfer power (as well as energy) from energy companies to ordinary citizens. They like sending us bills, but balk at the idea of sending back cash for the energy we produce for ourselves. Subsidies to them can be unlimited. Payments from them are to be avoided or constrained.
Just over a year ago, officials and MPs warned me that FITs would be safe from further cuts "as long as you don't ruin it by being over ambitious". What they meant was "It will be safe as long as the poor don't join in."
No one mentioned Guy Richie or Mick Jagger as the problem. But if too many poor households had solar roofs we might have to do what the Germans have done, and use this to break the power of energy companies to dictate energy prices.
Germany now has 55GW of renewable energy, which has to be taken first by the German Grid. The effect is to cut peak demand (and peak prices) by up to 25 per cent. The savings are passed across to all consumers. Moreover, over half of this new energy is owned by households and communities rather than by big energy companies.
German energy prices are about the same today as they were in 2008. Big Energy is just required to get by on normal rather than super-normal profits. It is what Britain's energy cartel is desperate to avoid.
Decentralised, renewable energy could take Britain down a path that would end the rigged energy market that leaves most of us powerless to change the game. Britain's energy cartel knows that if we were to go down the same path - with millions of households, and thousands of communities, becoming energy producers and not just consumers - the rigged market would be over.
There is no fixed (piddling) budget that communities bicker over in Germany. FITs are a freestanding item that has to pay its own way within the nation's energy accounts. Britain could do the same.
Come on David, its time to put your roof on the side of the small millions, not the Big Six.
Alan Simpson is a former MP and renewable energy advisor, now working independently on energy and climate issues
