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UTILITY WEEK | 27TH NOVEMBER - 3RD DECEMBER 2015 | 9 Policy & Regulation There's little to reassure investors that the government is serious. I n these pages back in July I suggested the political circumstances could hardly be more benign for Amber Rudd and the government to set their energy policy agenda for at least a decade ahead. In announc- ing cuts to support for onshore wind, solar and getting rid of the unlamented Green Deal, the energy secretary moved quickly – no doubt with the approval of the Treasury – to set out what, governing with a majority, she didn't want. She said much less about what she did want. Against the backdrop of sharp criticism and a dramatic fall in investor confidence, which seems to have surprised ministers, there have been weeks of speculation about a major speech from Rudd to "reset" the government's policy objectives and give industry a road map into the 2020s. Last month, it was suggested that the "reset" would strongly advocate demand management above new generation. A fortnight ago, as the first NISM for a few years got predict- able crisis headlines, it had been downgraded to a "so reset". This week, despite the efforts at spinning as something more substantial, what we eventually got was mostly a restatement of existing policy. With the exception of a few bizarre weeks in 2013 (when former energy minister John Hayes was boasting about put- ting the coal back into coali- tion), unabated coal generation coming offline by the mid-2020s may be a pre-Paris climate talks friendly notion, but is not really more than a statement of what will happen anyway. Seeking to emulate the US by replac- ing coal with gas to reduce emissions is hardly an original sentiment either. Of course, it is much easier to advocate more effective use of technology, demand reduction, international interconnec- tion and distributed energy as alternatives to new generation from the safety of academia or on planet think-tank, than when faced with the harsh realities of being held responsible for keep- ing the lights on. Particularly when a couple of weeks ago the combination of unplanned unavailability of thermal plant and a sustained high pressure weather system across much of northern Europe led to Nation- alGrid issuing a NISM notice. Little matter that the interven- tion worked as intended, the resulting headlines will not have encouraged boldness. Rather, we have the familiar reiteration of support for an electricity supply mix of new nuclear, offshore wind ( provided cost fall) and gas generation replacing coal. Even for those who broadly accept the pragma- tism of the approach, key ques- tions remain unanswered. No suggestion of how the capacity market will deliver investment in new gas where it has failed to date, no indication of the size of the levy control framework post- 2020 and little confidence for offshore wind developers that warm words today won't give way to similar antipathy to that directed at onshore wind. Ministers may find that it is answers to those questions of substance that will have more impact on repairing investor confidence than this week's speech, however carefully craed and extensively spun. Opinion Tom Greatrex, Former shadow energy minister Difficulties with gas Energy secretary Amber Rudd sees gas, along with help further in the future from nuclear, filling in the generation gap that will be created by the coal plant dropping off the grid between now and 2025. However, there are a series of issues that make this seem- ingly straightforward gas-for-coal swap anything but. 1. Investment concerns – investment in new gas-fired power stations has not been forthcoming, despite the development of the capacity market. Tweaks to the system are likely to be required to encourage the construction of new plant. 2. Carbon targets – there are concerns that building new gas-fired power stations to meet baseload and peak demands will "lock in" carbon emissions for the best part of the next five decades. This comes as the energy secre- tary insisted the UK still aims to meet its long term carbon reduction goals. 3. Security of supply – Rudd stated that UK reliance on gas imports could be as high as 75 per cent by 2030, exposing the UK to potentially volatile global markets. The govern- ment hopes developing domestic shale gas reserves will insulate the UK from possible price spikes, and to keep costs down. "Scenarios looking at energy decarbonisation see a major rise in the use of power to meet our heating needs. This is a major challenge as peak heating or cooling demand often coincides with peak power demand. "One option is to use heat to move power demand away from peak times. Heat costs about 100 times less to store than power and with large thermal stores on heat networks and smaller ones in homes, we can disconnect heat demand (time of use) from heat supply (time of production)." Tim Rotheray, director, Association for Decentralised Energy