Monday, 25 February 2008

Route Maps and Parsnips

A wonderful thing is a route map. A good one sets out the best route for getting from one point to another. But if you don't also have control of the steering wheel, and the driver decides to follow a different route – or even to drive to a different destination - it can end up being of purely academic value.

At first sight, the Renewable Energy Route Map for Wales, launched last week by the Assembly Government, is an exciting document. It would certainly be a major achievement for the Assembly Government if Wales were to follow the route laid out. But do the Assembly Government (or the UK Government, come to that – this isn’t just another plea for more powers) have enough control of the steering wheel to be certain of following the route that they have laid down?

It’s the verbs – the ‘doing’ words - in any plan which indicate how it is to be implemented, and the route map seems to me to fail this test. The key verbs throughout the document are ‘consider’, ‘explore’, ‘encourage’, ‘examine’, and ‘support’. These are not words which suggest to me the serious implementation of change on a sufficiently wide scale in a sufficiently short timescale.

The few more specific actions talk about the use of grants to encourage the private sector to undertake certain developments rather than others - in short using public money to subsidise favoured developments. There are two problems with this approach. In the first place, it means that, regardless of how this is spun, public expenditure which could be used on front line services is effectively being used to subsidise some energy costs; and secondly, it does not even guarantee that the private sector will undertake those developments.

The problem with energy policy is that too much of it is effectively being left to the market, and the market pursues those strategies which deliver most profit to the private companies, not those strategies which best fit government plans – or those which address the issue of climate change. Worse, it’s not even a level market; as opponents of wind farms are quick to point out, the ‘renewables subsidy’ given by the government to encourage the development of renewable energy, actually distorts the market. That is the government’s intention, of course, but whether the distortion works as intended, and has the desired effect, remains open to considerable debate.

That is not to say, of course, that the market / private sector has no role in the energy market. If the strategy decrees that we want X MW capacity of windpower, then allowing the private sector to compete for the construction and management of that capacity is a reasonable approach, within the current economic structures. That's as good a way as any of ensuring efficiency and value for money.

But surely it is for the government to decide how much capacity should come from wind, how much from coal, etc. – i.e. to set the strategic framework. And it is for the government to insist on (rather than merely encourage) the implementation of that framework. I doubt whether this strategy can succeed as long as the market continues to decide which type of capacity to build, on the basis of which delivers the most profit.

Is there an alternative? Yes there is – but it depends on the state taking a more pro-active role, and insisting on implementation of the agreed strategy. That includes, for instance, refusing to allow developments which do not fit the strategy rather than simply subsidising those that do. I have little faith that this will happen, however. Neither Cardiff nor London seem willing or able to contemplate such an approach.

As just one example, there are suggestions of two gas fired power stations in Pembrokeshire – one each side of the Haven. The logic of a sensible energy policy is that both should be refused (and alternative means of generating power be built). Yet the response of government seems to be to welcome the jobs created, and leave the decision about the type of plant to the private sector – who will build the one from which they can make the most profit, rather than the one which best fits the government strategy.

Without addressing these sorts of issues, the route map is in danger of being little more than fine words. And fine words, as they say, butter no parsnips.

4 comments:

alanindyfed said...

Better than a nuclear power station, one on each side of the Haven!

Draig said...

Good piece. I've got questions to ask about the role of gas-fired power generation in the energy equation too...

www.thebigwelshgasproject.blogspot.com

Jim.

Ceredig said...

Alan,

Nice to see someone in Plaid is still against nukes. Care to have a word in your leader's shell-like?

Draig,

Good questions to be asking. It seems to me that building more power stations which burn fossil fuels is the opposite of what the government says its strategy is. And even if we are to burn hydrocarbons, a larger number of smaller CHP stations would be a better way of so doing that a small number of larger CCGT stations.

However, the companies building and operating the stations can make more profit from the CCGT stations; and the oil and gas companies can recover the not inconsiderable investment in exploration faster by selling (and therefore burning) more gas more quickly, so CCGT is what we will get.

From my perspective the key thing is that, as long as governments permit the mix of capacity to be determined in this way, any and every strategy they produce is essentially a meaningless PR exercise.

Draig said...

Seems to me that Ieuan Winge is for anything that he thinks will bring employment to Ynys Mon - he's quietly supporting the LNG plant up there too.

Maybe someone should tell him that this LNG plant is going to trigger another massive pipeline all the way along the North Wales coast...

You'd think that as a Nationalist, Ieuan would understand that many of our major energy links (powerlines, water pipes, gas pipes etc.) run West-East for a very good reason...