Prime Minister Liz Truss has highlighted two immediate challenges on energy: helping people with their energy bills now and generating new domestic sources of energy for our future needs and security. Getting the details right will be vital.
With some analysts predicting average energy prices could reach £500 a month by January, the package of help will need to reach both the ‘just managing’ as well as those on Universal Credit – those on the average salary of £33,000 will not have a spare £3,000 pa for additional energy costs.
However, while freezing the energy cap for consumers would give certainty and reduce anxiety for tens of millions of our constituents, it doesn’t resolve the wider economic issue. In fact, reimbursing energy suppliers the difference between a frozen energy cap and the global gas wholesale price would only add to future taxpayer debts – as well as not helping the 1.1 million rural households dependent on heating oil.
There needs to be a mechanism for fair treatment of both consumers and electricity generators, whose prices were fixed through Contracts for Difference (CfD). And without some incentive for all of us to change our consumption patterns we won’t see behaviour changes of the type likely in Germany where everyone has been told to use 20% less energy.
So the details of the mechanism to be announced today are critical.
Meanwhile, as the Prime Minister has suggested, we have to speed up work on future supplies. Decisions on Sizewell C, the small modular reactors proposed by Rolls Royce and other sources of baseload energy (i.e. not subject to sunshine or wind blowing), including tidal stream for the strength of our tides, need to be taken fast.
The PM has also said that in order to mitigate against the consequence of Putin’s invasion we will also need to generate more North Sea oil and gas. A more UK reliant energy policy would help immunise us better against any further economic blackmail from Putin in the future.
In all this, far from being the cause of this crisis, domestically generated net zero nuclear and renewable energy is key. That’s why I’m delighted that Liz Truss pledged to “double down” this target in her recent message to the Conservative Environment Network (CEN). But if we are going to achieve this, end our reliance on gas and Putin and reduce energy bills longer term then we need to embrace even more renewables.
The opposite narrative - that onshore wind and solar power are unpopular and that the latter would weaken our food security is unhelpful. Grade A soil should be used for food production but there are plenty of parts of the country where farming solar energy makes good sense. In my constituency of Gloucester our plans to generate green energy (solar and wind) from land contaminated by previous landfill usage (and so not usable for housing) makes good sense. Blanket opposition to these energy sources is not the right response and in fact, new opinion polling by Survation shows almost nine in ten Conservative voters back solar power, making it the most popular form of energy with our party’s supporters. Local democracy is the key to deciding what works best where.
Of course, strengthening our energy and food security should never be an either-or situation. We need both – and let’s back solar farms on unproductive land where communities agree, giving landowners a new income source and generating cheap, clean power that can cut bills without jeopardising food production.
The same survey suggests nearly two-thirds of Conservative voters support lifting the ban on new onshore wind farms in England – again with the caveat of where there’s local support. That will be key to our project in Hempsted, Gloucester too; if the research shows that wind turbines can be installed safely, without harm to migrating birds or amenity loss for residents, then we may become the first Cathedral city in the country to go ahead. The case to persuade planners, environmentalists and residents will need to be robust.
In fact, over 80 per cent said they would support a renewable energy project in their area, perhaps not least because the average price for new renewables is nine times cheaper than gas. I believe our party’s supporters will back the onshore wind turbines on the local Gloucester recycling centre that I’m interested in for my constituency. Conservatives are often more supportive of onshore wind and solar power than the wider public, and I would not want inspectors to rule in favour of Made in Gloucester Green Energy if there was strong local opposition; we should win by having a strong case that makes economic and environmental sense.
We should also look at two of our island nation’s great natural assets – wave and tidal energy – which are the most guaranteed form of renewable energy production. When the wind doesn’t blow and the sun doesn’t shine, the tide still flows twice a day without exception.
And because new polling shows 81% of Conservative party voters support tidal power, compared to 72% of the general public, our new Prime Minister has an opportunity in her early premiership to support tidal as part of our future energy mix and guarantee future government investment in the next CfD auction round. The Chancellor was very supportive of this when at BEIS and I hope this continues.
Meanwhile, there is an opportunity for the PM to make an early commitment to new nuclear including the STEP programme, which I hope will come to Gloucestershire. Boris Johnson was right to make the confirmation of Sizewell C one of his final acts and 63.9% of Conservative voters agree we should include nuclear in our future energy creation.
More than anything the new research shows a desire across the country to get new energy infrastructure built. It’s logical that the government wants to assure people that no stone is being left unturned, but a nudge to encourage more renewables – including marine, solar and onshore wind (all substantially more popular and cheaper than shale gas).
While there is no silver bullet to the gas crisis, generating more renewables is a must. Faced with this unprecedented crisis, we should support our new Prime Minister in looking at all options to strengthen the UK’s energy security and bring down consumer costs, and I know she will then implement them vigorously.
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