By Daniel Mahoney, Tony Lodge and Tim Knox
Centre for Policy Studies
A new Energy Bill should take the opportunity of setting out how combining
energy policy and a new industrial policy can deliver for the economy.
For years the old Department for Energy and Climate Change (DECC) denied
its policies did not take into consideration the concerns of energy
intensive industry and other sections of industry which rely on competitive
electricity prices – to the chagrin of Industry Ministers.
The abolition of DECC and the creation of a new Energy and Industrial
Strategy department opens up the opportunity to deliver a new energy policy
which prioritises costs, competitiveness and security of supply in the
national economic interest after Brexit.
Furthermore, Prime Minister Theresa May’s new gGovernment needs to address
the growing conflict of interest relating to National Grid and the growing
use of interconnectors. Here’s why:
Policy on renewables will on average cost households £466 a year by 2020.
Costs may increase due to subsidy caps being breached.
EU legislation has closed 12 GW of baseload capacity since 2012. UK winter
margins are now 0.1% without emergency measures.
The Capacity Market has failed to attract new gas fired power stations. New
gas plant equated to just 10% of the Capacity Market’s gas contracts.
Low wind, unplanned nuclear closures, an interconnector outage and high
energy demand led to prices spiking from £40/MWh to £999/MWh on 14 September.
The UK is depending on growing foreign imports of electricity, which have
risen by 30% in two years. National Grid’s role in this must be examined.
Following the abolition of DECC, a new Energy Bill is needed to prioritise
costs, competitiveness and security of supply.