Tuesday, 6 September 2011

The Cheap Energy Deception

Government energy policy is one of those topics that brings the right leaning part of the Fourth Estate out in a froth, but only on those days when there is less news on the go. So today, when Phonehackgate has rumbled back into life, there is little copy being published on the subject. It was rather different for the Maily and Sunday Telegraph over the last couple of days.

And in laying into the move to greater energy security, the Telegraph’s political editor Andrew Porter has – once again – sacrificed facts to fit the paper’s agenda. The paper has got hold of a note from Young Dave’s senior energy advisor, and has claimed that it warns that current energy policy will add £300 to annual domestic bills by the end of the decade. Except it doesn’t say that at all.

But fair play to the Telegraph, the note in question has been released in full, and it’s quite clear that the £300 (being 30% of the average domestic bill) is actually only £135, as it refers just to electricity and not gas consumption. Moreover, the note does not dismiss assumptions about consumer behaviour in improving energy efficiency – like insulation. It suggests that behaviour needs more encouragement.

That the interpretation applied by Porter is not supported is clear, although the agenda of the Telegraph may not be: this is to systematically rubbish the idea of more energy provision through renewables and nuclear – what is referred to as energy security. The thought that all those new power stations are not being built by the supposedly all-providing free market does not enter.

And if the free market will not provide either capacity or energy security, then Government policy has to be to intervene. There is an increasing amount of present capacity that is in its last years of operation, and bringing on stream replacement generation that does not depend on imported gas and coal is a once in a generation opportunity.

The same question hangs over new energy sources: if shale gas is so wonderful, why has the UK’s first such operation ceased production after only a couple of months? The suspicion of earth tremors being caused by the fracking process was the first reason given, but then the operator cited economic concerns: it was not as cheap as some have asserted.

Finally, as Damian Carrington has pointed out, the current Government policy effectively bets on the price of oil being over $100 a barrel in 2020, which would mean comparatively lower bills. Add that distinct possibility to energy security and critics of that policy look less like the voice of reason, and rather more like those queuing up to whinge at Chris Huhne. Responsible journalism it is not.

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