Governmental cuts to renewable energy does not create innovation in the sector according to Lord Deben, as the Committee on Climate Change (CCC) chairman also took aim at the lack of transparency behind recent environmental policy decisions.
Speaking as the CCC provided the Energy and Climate Change Select Committee with a 2015 progress report, Lord Deben said that the purpose of subsidies was to “help new ways of solving old problems in markets controlled by big companies” and questioned whether or not removing or severely cutting subsidy support would help drive innovation.
His sentiments fly completely against comments made by DECC permanent secretary Stephen Lovegrove before parliament’s summer recess when he suggested that industries often innovated when subsidy support was removed as they looked to still compete.
In a wide-ranging session, Lord Deben was also questioned on the CCC’s previous warnings of a policy gap that would occur after 2020 when the Levy Control Framework was due to expire, and whether or not the government’s recent policy decisions had only served to move support in the “opposite way” and widen the gap.
Deben said that not only was more certainty needed “further down the road”, but added that the CCC was to press for an extension of the system and that the system remained “sufficiently robust” in order to deliver against the UK’s renewable energy commitments.
He also poured scorn on what he perceived to be a lack of transparency attached to the reasoning behind policy cuts especially in respect to what he termed a “clearly politically-motivated” move to end support for onshore wind.
“If the government decides to take measures which are the least cost system, they have to tell the public what that cost is. It must explain what the public is paying for that policy decision and transparency is crucially important in this,” he said.
However Lord Deben did reserve criticism for the motivation behind the cuts and suggested that replacement support was in the policy pipeline. “We cannot assess [the impact of policy decisions] until the government reveals the alternatives [and we] expect that to be done soon,” he added.
CCC chief executive Matthew Bell also provided evidence during the session and responded to questioning on the current uncertainty surrounding the future of Contracts for Difference. The mechanism had been intended to replace Renewable Obligation support for large-scale renewables projects, but the second allocation round has been postponed indefinitely and energy secretary Amber Rudd could not confirm its continuation when providing evidence to the ECC Select Committee in July.
Bell said the future of CfDs was “very important” for the government’s least cost model, but added that when it would be clarified as well as the rules and conditions for allocations needed to be cleared up by the government.