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Labour underlines support for decarbonisation target in 10-point energy plan

Labour underlines support for decarbonisation target in 10-point energy plan

Labour will today publish a new 10-point plan detailing how it plans to "reset the energy market" during the 20 months of its promised price freeze, reinforcing its previous commitment to introduce a decarbonisation target for the power sector.

Labour leader Ed Miliband and shadow energy and climate change secretary Caroline Flint will launch the new Energy Green Paper at an event at Manchester Town Hall later today, promising that the new strategy will "make sure gas and electricity is affordable and available for this generation and generations to come".

Miliband is expected to draw parallels with the Thatcher government's "Tell Sid" campaign, which accompanied the privatisation of the UK's energy industry.

"We have a new message for Sid," Miliband will say. "We will freeze your bills for 20 months. We will reset the market with real competition and proper regulation so that prices are affordable. We will secure the investment we need. Today's Green Paper on Energy sets out how the energy market is failing consumers and failing Britain. And it explains how a One Nation Labour Government will secure energy which is affordable and available."

The Green Paper brings together Labour's recent flurry of energy market reform proposals, including its commitment to ring-fence supply and generation businesses, introduce an "open pool" for wholesale electricity, and replace Ofgem with a new watchdog.

It also confirms a Labour government would "take forward the system of contracts for difference to encourage investment" – a move that is likely to be welcomed by clean energy investors – and reiterates previous commitments to introduce a decarbonisation target for 2030 and provide the Green Investment Bank with "the power to leverage new investment".

In addition, it sets out new proposals for a new Energy Security Board that would be tasked with undertaking long-term planning to ensure the UK's energy security is not compromised.

Labour's high-profile price freeze promise may have sparked a major political debate on energy policy, but it has prompted accusations from businesses that the move could hamper new investment in the run up to the next election by increasing the political and policy risk faced by investors.

The new 29-page Green Paper appears designed to try and ease some of those concerns by providing further clarity on how a Labour government would seek to reform the sector and mobilise investment in new clean energy capacity. BusinessGreen understands that Labour is also working on two further packages of proposals on energy efficiency and the green economy that are due to be released next year.

Steve Radley, director of policy at manufacturer's trade body EEF, said the new document was likely to be welcomed by energy-intensive companies.

"Industry is facing major unilateral increases in energy prices and will welcome the Green Paper's focus on competition, transparency and value for money," he said in a statement. "Its commitment to Contracts for Difference and a 2030 decarbonisation target provide a clear sense of direction which is vital to get investment in low-carbon energy flowing. However, in setting a 2030 target, both here and at European level, it is vital that it is sufficiently flexible that we don't lock ourselves into energy technologies that are uncompetitive."

However, trade association EnergyUK launched a thinly-veiled attack on the new proposals. "Truly powering Britain means increased competition, attracting international investment, rebuilding trust and a better deal for customers," said a spokesman for the organisation. "Energy UK and its members are up for change but it has to honest and real, not soundbites and rhetoric.

"Reform is already underway. Currently competition is increasing, companies have simplified tariffs, people are switching and more suppliers are coming in. No other industry is facing the investment challenge of the energy sector and we will work with all parties to keep the lights on and keep us secure. What is needed is a well-functioning energy market that gives consumers fair value, works in their interest and gives investors the confidence they need. An open and honest debate and long term policy commitments are essential."

The publication of the Labour plan is likely to reignite the row between the three main political parties over energy policy, with the coalition poised to next week announce changes to the ECO and Warm Front schemes that are designed to cut annual energy bills by about £50 per household.

Meanwhile, a new survey commissioned by the Energy Bill Revolution campaign will today show that a sizeable majority of people regard energy efficiency improvements as one of their top infrastructure priorities for the UK.

The survey of 1,000 adults found that 85 per cent rank free energy efficiency measures in their top three infrastructure priorities, while 57 per cent stated that it should be the top priority, above new roads, new power stations, HS2 and new airports.

"The UK government has more than £100bn in infrastructure projects planned but not one single penny is set aside to insulate homes," said Ed Matthew, director of the Energy Bill Revolution. "All parties need to listen. What people want more than anything is warm homes. This must be the UK's number one infrastructure priority."

The campaign is calling on the government to recycle revenue generated from UK and EU carbon taxes to fund a mass rollout of energy efficiency makeovers for 600,000 homes a year.

However, speculation is mounting that with funding for domestic energy efficiency programmes already cut by a fifth over the course of this parliament, further cuts could be imposed if the government extends the deadlines for the ECO energy efficiency schemes without imposing tough new insulation targets on energy companies.


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