Our challenge and the Coalition’s

You’d expect the most telling comment on the Government’s position on energy in Brighton last week to come from their Secretary of State Ed Davey. But, although he delivered countless confident fringe moments, administered an albeit small dose of much-needed confidence to the industry and investors, and reassured us with a recognition of balance; he was somehow slightly upstaged by a quiet and easily missed comment from Chief Secretary to the Treasury Danny Alexander.

In his Q&A session in the main conference, when faced with the question of who he gets on with the least and most of his coalition partners, Alexander was quick to refuse to answer. However, he was equally quick to add, that what he would say is that the issue that divides the Coalition the most is energy and the environment.

This certainly wasn’t the most significant of remarks on energy at the Liberal Democrat conference. For some it may not even come as a surprise that this issue is the most heated in Coalition discussions, especially in the Treasury. But in highlighting it, at the crucial time of the approaching Energy Bill, it begs the question of whether Westminster will be able to, as CBI’s John Cridland would put it, “just do it”?

At one of the many fringe events Cridland was alongside Davey, business could not have had a clearer message – certainty is vital now more than ever and politics that artificially polarises the issue of our energy future is unhelpful and misses the point.

This is not just the view of business, the industry itself is looking for strong leadership in this area and it is right that this needs to be balanced. ENA worked hard to ensure the picture of meeting carbon reduction targets was an affordable one. We helped to win the argument of an enduring role for gas through our Redpoint Consulting report launched by the former Energy Minister Charles Hendry back in November 2010. Faced with what some considered a hasty plan to decarbonise from DECC, industry was anxious to ensure a transition that would be affordable to customers.

Back then we’d have welcomed the words of caution from the Treasury, but we are in a slightly different place now. Asked about the role of gas, Davey stated the importance he placed on it, “As the Liberal Democrat Secretary of State, speaking on behalf of our party, I am not hostile to gas.” He even went on to say that he thought gas would have a central role for “many years to come”.

Davey gave his credibility numerous boosts throughout his Party’s conference. He didn’t just advocate the role of gas, he made the point that decarbonising power is the enabler to decarbonising heat and transport, and his commitment through the Energy Bill will no doubt reflect this. What is most important about how Davey presented himself at his first conference as Secretary of State is that he gets it. He knows that more heat pumps will emerge, more electric vehicles will be bought and he knows a balanced energy mix will support this.

Underpinning the delivery of this is an Energy Bill that strengthens the policy link to the regulators actions, whether that’s Ofgem or Labour’s alternative, and that delivers the certainty for investors.

Industry’s challenge is to help deliver understanding of the issues and solutions, we must inform policy without bias and take people with us. Government’s challenge is to not let political posturing and special interest interfere in getting the job done and enacting the Energy Bill so that the regulator can set the framework and the markets can deliver.


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