Utility Week

UTILITY WEEK | 12Th - 18Th MAY 2017 | 15 Policy & Regulation Policy & Regulation the cost of capital, which is not really desir- able. Constant interventions are undesirable from an investor and consumer perspective." The utilities have been in this last- chance saloon, of course, when Ed Miliband unveiled his proposed freeze on energy bills four years ago. The issue was then kicked into the long grass, with the commissioning of the Competition and Markets Authority inquiry. In the meantime, falling wholesale prices fed into household energy bills, taking the political pressure off the government. However, given the upward pressure on wholesale prices, Grant is not sanguine about the outcome this time round. "I'm worried they might do something this time," he says. In a move that could buy the industry time, Energy UK calls for careful consultation on any cap in order to avoid the "unintended consequences" of rushed policymaking. Any fresh regulation should be "time-lim- ited and subject to reviews", it adds. Which? backs this up by calling in its Consumer Agenda for government for any retail energy market intervention to have a cut-off date. The industry is much more on message with Westminster thinking when it comes to the industrial strategy, which was cham- pioned by Timothy long before he entered Downing Street with May. Energy UK has identified "an industrial strategy built on a low-carbon economy" as one of its top five policy priorities for the upcoming parliament. And the Energy Net- work Association's policy submission says its members can play a central role in deliv- ering the industrial strategy. Renewables UK pitches in by pointing to how wind and wave projects can help to deliver an industrial strategy in deprived coastal areas. Potentially more worrying are Timothy's past comments on green energy. In a blog for the Conservative Home website about a year ago, he described the Climate Change Act (CCA) as a "monstrous act of self-harm". Energy UK calls for the next government to be more explicit through the contract for difference (CfD) auctions process about how it will support low-carbon technologies. SSE is more robust, calling for the government to put wind "at the centre of a modern indus- trial strategy", adding that onshore turbines have a "major role in our future energy mix". Grant says ministers must make it clear whether they remain committed to the targets outlined in the CCA and how they expect to achieve them. "This government will take us into early 2020, when people will be making capital investment decisions that will deter- mine whether we decarbonise, given that these assets have lives of over 20 to 30 years." A government with the kind of majority May looks on course to achieve could make brave calls that are driven by the nation's long-term interests rather than electoral cal- culation, Grant says: "They could use the benefits of that majority to provide clarity by looking beyond the five-year cycle." A s far as the forthcoming general election is concerned, the message from Energy UK chief executive Lawrence Slade is clear – "give us a long-term framework and the stability that would bring, and the industry will deliver." The trade body was one of the first to publish an election mani- festo last month, which set out a number of key policy priorities for whoever forms the next government. Speaking to Utility Week, Slade said the document's key message to politicians is to "make sure you are involving industry in discussions". "If you look at the post-Brexit opportunities," he adds, "if the gov- ernment and the industry can get together, we can set an ambitious programme of decarbonisation for this country, which covers every- thing from harnessing the best renewable technologies to taking the lead on decarbonising heat. "All of the jobs related to those activities are highly skilled jobs," he says. "That could lead to an industry that could be exported. It's similar to what happened with the oil and gas industry in the 1970s and '80s. "If you look at how some of the small companies in Scotland back then were able to harness those skills and export them around the world, why can't we do the same with the range of new technologies that a true industrial strategy, with low carbon at its heart, can deliver?" The manifesto also warns against the consequences of a future government intervening in the market with an energy price cap and states that "competition is the most appropri- ate way to drive down prices". It also recommends setting contracts for dif- ference (CfD) allocation rounds on a rolling, one-year basis, and more coordination between the government and other agen- cies, such as Ofgem and the Environment Agency, with an "appropriate hierarchy of rules and priorities". In addition, it calls on the next government to launch a major campaign to edu- cate people about the bene- fits of polices, which are paid through customer bills. "So, the chal- lenge for govern- ment, in terms of looking forward, is how you set that framework, which allows all these different technolo- gies to evolve and merge into a new system that can deliver for the next 50 years and beyond." Interview The need for stability The energy industry had hoped the previous parliament would have provided clarity; now it is hoping the general election will finally deliver it. government intervening in the market with an energy price cap and states that "competition is the most appropri ate way to drive down prices". It also recommends setting contracts for dif ference (CfD) allocation rounds on a rolling, one-year basis, and more coordination between the government and other agen cies, such as Ofgem and the Environment Agency, with an "appropriate hierarchy of rules and priorities". In addition, it calls on the next government to launch a major campaign to edu cate people about the bene fits of polices, which are paid through customer bills.

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