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Osborne in renewables row with Lib Dems

The chancellor fears overgenerous support for wind power and other renewable sources will deter investment in gas-fired power stations, which he believes offer businesses and consumers the prospect of lower bills in future.

George Osborne is blocking a new subsidy regime for renewable energy, as he fights a coalition battle with the Liberal Democrats to ensure gas remains central to Britain's future power needs.

The chancellor fears overgenerous support for wind power and other renewable sources will deter investment in gas-fired power stations, which he believes offer businesses and consumers the prospect of lower bills in future.

The stand-off between Mr Osborne and Ed Davey, the Lib Dem energy secretary who wants to prioritise renewables, has infuriated business. John Cridland, head of the CBI employers' group, claims the "political row" is holding back investment in Britain's energy infrastructure.

The battle over Britain's energy policy is exacerbating coalition tensions following this month's row over House of Lords reform. Mr Davey has been forced to cancel an announcement, planned for this week, on renewable subsidies.

Lib Dems believe Mr Osborne's stance is further evidence that the Tories are tacking to the right and diluting David Cameron's pledge to run Britain's "greenest government ever".

The chancellor, however, will be cheered on by more than 100 Tory MPs who signed a letter... more [truncated due to possible copyright]  

George Osborne is blocking a new subsidy regime for renewable energy, as he fights a coalition battle with the Liberal Democrats to ensure gas remains central to Britain's future power needs.

The chancellor fears overgenerous support for wind power and other renewable sources will deter investment in gas-fired power stations, which he believes offer businesses and consumers the prospect of lower bills in future.

The stand-off between Mr Osborne and Ed Davey, the Lib Dem energy secretary who wants to prioritise renewables, has infuriated business. John Cridland, head of the CBI employers' group, claims the "political row" is holding back investment in Britain's energy infrastructure.
 
The battle over Britain's energy policy is exacerbating coalition tensions following this month's row over House of Lords reform. Mr Davey has been forced to cancel an announcement, planned for this week, on renewable subsidies.

Lib Dems believe Mr Osborne's stance is further evidence that the Tories are tacking to the right and diluting David Cameron's pledge to run Britain's "greenest government ever".
 
The chancellor, however, will be cheered on by more than 100 Tory MPs who signed a letter this year calling for cuts in the subsidies paid to promote "inefficient and intermittent energy" supplied by wind farms.

The row has been referred to Mr Cameron and Nick Clegg, but the prime minister and deputy prime minister have been unable to strike a compromise.

While the energy secretary accepts the case for a 10 per cent cut in the subsidy for onshore wind farms, Mr Osborne believes it should be steeper. His aides say that overgenerous renewable subsidies "reduce the viability" of gas.

Officials on both sides say the main stumbling block is Mr Osborne's insistence on linking the renewables policy to decisions on gas so that there is "a credible and certain framework" for investment in both.

In his March Budget, Mr Osborne declared: "Gas is cheap, has much less carbon than coal and will be the largest single source of our electricity in the coming years."

Mr Davey accepts that gas has an important part to play and his department is due to complete work on a gas strategy in the autumn.

Some Tories believe that shale gas could play a crucial role in Britain's energy needs in future, although Mr Davey is sceptical.

The energy secretary is holding back on issuing new shale gas licences in Britain, amid local community concerns about the "fracking" process used to extract it and possible regulatory problems.

"The government has a big decision to make: are we going to build a low-carbon power system or are we going to have a second dash for gas?" said David Kennedy, chief executive of the committee on climate change. "The economically sensible thing is to deliver a low carbon power system."

Under the coalition's energy market reform plans, the gas plants that supply nearly half the UK's electricity supplies would be play a less dominant - but still critical - role in coming decades, especially when back-up power is needed to balance the electricity grid on windless or cloudy days.


Source: http://www.ft.com/intl/cms/...

JUL 20 2012
https://www.windaction.org/posts/34420-osborne-in-renewables-row-with-lib-dems
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