As the FT reports:
George Osborne is blocking a new subsidy regime for renewable energy, as he fights a coalition battle with the Liberal Democrats to ensure gas remains central to Britain's future power needs.
So, according to the IMF he's trashing the economy and now he's doing his best to trash the environment.
You can see why the Tories just love him.
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Brought to us all courtesy of Nick Clegg and Vince Cable……
Thank you Nick Clegg and Vince Cable…..
Actually, Osborne the FT and the LibDems don’t realise it, but Osborne is actually improving the economy. Bear with me and I will explain:
Osborne is planning to reduce the number of Renewable Obligation Certificates awarded for each MWh of power generated from onshore wind power, by at least 10% and probably 25%. There is no “cash subsidy” for the wind farms, but the ROCs are valuable because fossil; fuel generators are required to acquire a fixed number of certificates per MWh of non-green power that they generate. They can do that by generating “green” electricity or by buying ROC’s from independent power projects, and in both cases the cost is passed on to the consumer.
What Osborne, the LibDems and the FT haven’t figured out is that the number of ROCs required isn’t being reduced, merely the number of ROCs available for one particular form of green generation.
There are possible consequences. Either there will be a switch to other forms of green generation, which isn’t that easy because there aren’t many options and none of them come close to the economics of onshore wind power, or more likely, that 10-25% more power will have to be generated from onshore wind to produce the (fixed number of) ROCs that the energy companies need, which will come at a greater cost to customers.
So Osborne is wrong if he thinks his measures will reduce costs. The LibDems are wrong if they think it will reduce renewable generation and the FT are wrong because they failed to spot that the number of ROCs required is fixed.
Sorry that should be “improving the environment”, not economy.