U.K. Should Find Cheaper Way to Tackle Climate Change, Say Lords

From

The U.K. government should stop intervening in power markets and better manage its carbon budgets in order to curb the cost of tackling climate change and boost energy security.

That’s the conclusion of a report Friday by a panel of lawmakers in the House of Lords, which says government policies to encourage investment in low carbon energy have all but killed competition in the market.

Successive government’s subsidies for solar panels, wind turbines and new nuclear power plants such as Electricite de France SA’s Hinkley Point C in Somerset are pushing up consumer energy bills, according to the report from the Lord’s Economic Affairs Committee.

“Hinkley Point C is a good example of the way policy has become unbalanced and affordability neglected,” said Lord Hollick, chairman of the committee. “It does not provide good value for money for consumers and there are substantial risks associated with the project.”

The cross-party panel said the Conservative government should host technology-neutral auctions for new supply and create an Energy Commission that would advise it on the best way to achieve its energy objectives, according to the report. Ministers should also prioritize security of supply over decarbonization and affordability, the report says.

The report was criticized by researchers and pressure groups. Following its advice would be “a disaster” for the North of England economy, according to the Institute for Public Policy Research, which has close links to the opposition Labour Party.

"While ducking investing today might make short-term sense, this will lead to much bigger bills in terms of higher costs and missing out on tomorrow’s green jobs potential,” said Darren Baxter, IPPR north’s researcher, in an e-mailed statement.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE