Unlike most politicians Ed Davey, Secretary of State for Energy and Climate Change, can describe the challenges he faces in two well-used words – “energy trilemma”. They accurately sum up the often contradictory issues that have to be tackled. It means one of the few Liberal Democrat Cabinet ministers in the UK’s Conservative-led coalition has to keep the lights on, provide affordable energy, while still meeting climate-change targets.
“It’s particularly difficult for the UK because if we do nothing at all, we will still have to replace a lot of electricity generation and networks coming to the end of their natural life,” Mr Davey accepts. He was catapulted into the trilemma hot seat 20 months ago when his Lib-Dem predecessor Chris Huhne was prosecuted for perverting the course of justice over a speeding case.
Given the complexities of his trilemma, Mr Davey is surprisingly optimistic about the future, and how he and the Government are doing so far.
“I think we are doing exceptionally well, actually, in most areas,” insists the Secretary of State, who points out that £45 billion has been invested in electricity generation over four years, more than transport, water and telecommunications combined, with more to come.
As he talks, Mr Davey, who won a bravery award for saving the life of a woman in a railway incident, displays not just optimism, but the ability to find a sunny side to every cloud.
Didn’t the European Commission’s statistical body recently find that the UK was third lowest in renewable energy generation of 28 European countries and a long way off reaching its 15 per cent renewable energy target by 2020?
The UK is on 4.2 per cent renewables, just ahead of Malta and Luxembourg.
FUTURE IMPACT
“That’s historical, that’s historical. I think that’s changing, it’s changing fast,” replies Mr Davey, who explains that a lot of the investment is front-loaded and will have greater future impact.
He points out that transport and heat are included, areas where “we are making slightly less progress for a variety of reasons”. A 30 per cent target has been set for electricity and that will be more than met, he believes.
“I am pretty sure we will meet the 2020 target partly because we have been so successful in renewable electricity,” says Mr Davey.
Doesn’t the fact that, despite hundreds of new turbines being built, power produced by wind farms fell by a fifth in the second quarter of this year because of low wind speeds, raise questions?
Third-generation nuclear is on the verge of being cost effective compared with some renewables, although that could change as future renewable energy costs fall
“I disagree. We always knew winds would blow strongly at different times of year. In January nearly 20 per cent was coming from wind, a record. People forget you don’t pay for the windmills – zero – unless they are producing electricity,” Mr Davey explains.
The reduction in feed-in tariffs for solar panels surely can’t have helped?
“The truth is we are all learning in this space and the question is do you learn in a way that encourages or hinders investment,” he says, claiming a 60 per cent increase in solar energy generated.
The UK honoured existing contracts, unlike Spain or Romania, and moved on to produce “a predictable system” where tariffs go down as deployments rise.
“Guess what – it has been really successful. You know what? No one reported that. But they reported it when we were having problems,” says Mr Davey with passion.
But wasn’t launching the Green Deal to finance home energy efficiency and then closing it in July when the money ran out unfortunate?
“The Green Deal has not hit all our metrics, but it has hit some,” argues the Energy Secretary, who believes many of the more than 325,000 who had Green Deal home assessments will pay for improvements themselves or be helped by the big energy companies.
Is he worried UK lights could go out either because of political wrangling over energy prices or a lack of investment, as some senior energy industry executives have warned?
“I am as sure as I possibly can be that this won’t happen,” insists Mr Davey, who has powers under existing legislation to call on supplementary reserves from moth-balled power stations.
“I think that takes us very powerfully through the next two winters,” adds the politician, who believes that even if England had won the World Cup in Brazil on penalties there would have still been enough electricity to power the millions of kettles put on to make tea afterwards.
POLITICAL BATTLES
Mr Davey also faces the difficulty of being a Lib Dem in a Conservative-led government with reports of battles with Chancellor George Osborne over budgets and carbon targets, and even more public spats with Communities Secretary Eric Pickles over calling in around 50 onshore wind-farm applications, despite many having local authority approval.
The Energy Secretary saw off attempts by Mr Osborne to water down the UK’s legally binding obligation to reduce emissions by 80 per cent on 1990 levels by 2050.
The battle with Mr Pickles over the future of on-shore wind farms continues. While Mr Davey believes the Communities Secretary has the power to act as he has, there could be further legal challenges from the industry to see whether he has gone too far.
As a Lib Dem, both Ed Davey and his party have had to drop their long-seated opposition to nuclear power and last year he was able to announce plans for the first new nuclear plant in a generation, Hinkley Point C in Somerset.
Partly his concerns were, and remain, the cost of nuclear. He believes third-generation nuclear is on the verge of being cost effective compared with some renewables, although that could change as future renewable energy costs fall.
The environmental impact of fracking could also be problematical for a Lib Dem, but Mr Davey favours further exploration as long as there is a regulatory framework in place at the outset.
“You can only persuade people if you can show that the government has gone about it in a responsible way,” says the Energy Secretary, who sees a long-term gain.
CARBON PLAN
As part of the carbon plan for 2050, replacing liquefied natural gas from Qatar with domestic gas from fracking could cut prices, increase energy security and reduce the UK’s carbon footprint.
Mr Davey is optimistic about the impact of his 2013 Energy Act, which created the world’s first low-carbon electricity market.
“The Act is one of the things I am proudest of because it is a very flexible framework, which you can adapt to the low-carbon winners of the future,” he says.
The politician, who controversially called climate sceptics “diabolical”, also has increasingly high hopes for the United Nations Climate Change Conference in Paris in December 2015.
He set up a Green Growth Group of major EU countries, including the UK, France and Germany, to “push the ambition levels of the European Commission”.
Mr Davey is optimistic that the proposals, if accepted, would get close to a European Climate Change Act at least up to 2030.
“I would have liked to go beyond 2030, but you can’t swallow the elephant in one go,” he says, believing that an early and ambitious offer from Europe would raise the bar and put pressure on China, the US and India to accept more stretching targets.
Unfortunately, if it happens, Mr Davey may not be there to see it.
Before Paris he faces his own political trilemma – a general election in a three-party system that could end coalition government for the Lib Dems.
