Utility Week

UTILITY WEEK | 11TH - 17TH OCTOBER 2019 | 11 Policy & Regulation the Liberal Democrats, this book made the unapologetic case for a free market Conservatism. But Kwarteng was singing from a di erent hymn sheet when he appeared at a confer- ence fringe event organised by the Centre for Policy Studies, the think-tank that was piv- otal in the development of the Thatcherism in the early 1980s. He said there is a now a "genuinely wide consensus within the party on the [climate change] issue, which is a lot wider than it was ten years ago". While there are "one of two MPs" who may think global warming is a "hoax", he pointed to the unanimous support for the net zero target legislation within the Conserva- tive parliamentary party during the debate to approve the net zero target. "My instincts are for the free market, but there are limits to that," he said, adding that the energy market has been regulated for "pretty much a century". Hewson had argued at the IEA event that the costs of decarbonisation would bear down more heavily on those who were strug- gling to keep on top of their bills than those with a "comfortable life in London". And while the most recent round of CfD (contract for di erence) auctions has won plaudits for delivering renewable generation that looks set to be cheaper than existing gas plants, Hewson recalled that it had been a very di erent story when the initial contracts were allocated. "CfDs have been excellent for investors in renewables at the expense of ordinary con- sumers," she said, adding that the subsidy regime is "highly susceptible" to lobbying from interest groups. Hewson said the desire to decarbonise the economy must be seen in the context of wider concerns about improving the UK's productivity, adding that an economy- wide carbon tax was a better way of cutting emissions. But Kwarteng defended the operation of the CfD market, insisting that what the UK had achieved in terms of decarbonisation should not be dismissed and had not been by accident. "It's been way more success- ful than anyone anticipated," he said. "We wouldn't have reached that if you had le" it entirely to the free market." Re– ecting this pragmatic tone, he admit- ted that while initially unconvinced about the price cap on standard variable tari s, he had been 'impressed" by how it had worked. And when pressed on whether the UK should backpedal on emissions cuts, given this country's relatively small contribution to overall emissions, he insisted that Brit- ain had an important leadership role on the issue. "Virtue signalling isn't bad," he said. There was little new in terms of new power policies announced at last week's conference, although new energy e™ ciency building regulations were unveiled and transport secretary Grant Shapps signalled that he wants to look at bringing the ban on sales of internal combustion engine cars and vans forward by › ve years to 2035. But it sounds like the government won't be abandoning its current support for a mix of low carbon generation technologies on Kwarteng's watch. "This will cheaper than going down an all renewables or nuclear path," he said, adding that he would have probably given the go- ahead to EDF's plant at Hinkley Point C. But hot on the heels of Labour's decision to endorse the Green New Deal policy to hit net zero by 2030, the Tories are keen to show they are best placed to deliver this agenda, particularly given the latest Extinction Rebel- lion protests set to hit London this week. Afolami said: "I think there is a political will to get quite a long way there. I worry about how easy that will be politically to do. It will require signi› cant acts by the govern- ment to put in place "Le" ies will use this issue as an excuse to shut down as much as possible of the capitalist system. We must make it as easy as possible for people to make behaviour change because otherwise it will happen in a much more coercive way." "People have used the climate change issue to resurrect a whole range of le" wing anti-capitalism and anti-western ideas," said Kwarteng, who was keen to stress how tech- nology will cut emissions rather than reining in economic growth. He expressed the belief that electric vehi- cle use would increase "We've got to distinguish the need to deal with the decarbonisation issue, which is a good thing, from the rag bag of le" wing pressure groups. We've got to be to be very, very vigilant about the fact that there are a lot of people who want to question our entire economic system "The idea green energy or the environ- ment is opposed to economic growth is very, very bad," he said, adding that the two shouldn't be presented as "Manichean opposites". "You can be environmentally responsible while having a dynamic growth agenda." With an election widely expected before the end of this year, the Conservatives will be under pressure to demonstrate that they have the right policy package for tackling what is increasingly referred to as a climate¦crisis. "Teesside has done pretty well at cutting carbon emissions by half – we did that by closing the steel works and putting 3,000 peo- ple out of work." Ben Houchen, mayor, Tees Valley Combined Authority "CfDs have been excellent for investors in renewables at the expense of ordinary consumers." Victoria Hewson, head of regulatory a airs, IEA "My instincts are for the free market, but there are limits to that." Kwasi Kwarteng, energy minister

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