“March’s budget provides one of the biggest opportunities to tackle climate change in the UK," the Virgin tycoon says.
Posted: 16th March 2012
Sir Richard Branson is one of 102 top business signatories of an open letter to David Cameron urging him to back wind and other renewable forms of power generation.
“March’s budget provides one of the biggest opportunities to tackle climate change in the UK," the Virgin tycoon says. “We must ensure it encourages investment rather than creates uncertainty and delays further serious investment in the renewable sector. As a country we need to be better prepared to deal with rising energy prices.”
The so-called ‘102 letter’ is conceived partly as a response to the actions of 101 backbenchers who last month wrote to the Prime Minister attacking wind power, and a call to the Treasury to re-establish a stable investment platform for renewable energy as a driver of the recovery out of the recession.
It is published on the website of the Entrepreneurs' Organisation (EO), the global network of more than 7,500 business owners in 38 countries.
“Cutting support for green energy is a false economy," comments Dale Vince, Founder and CEO of Ecotricity, one of Britain's most successful new energy companies trying to muscle in on the territory controlled by the Big Six.
His angle is energy security. “Britain needs to become energy independent once more, and with the North Sea all but depleted of fossil fuels we need to look to other forms of indigenous energy. We have them in abundance, in the wind the sun and the sea, enough to power our country many times over.
“While Britain remains dependent on global energy markets, our bills can only go one way: upwards."
His analysis is that the level of current support for green energy sources is relatively small in comparison to that for oil and gas.
In the last 12 months roughly £30 of our household energy bills has been spent on green energy support. Of this, the Renewables Obligation (RO) added just £15.15 to the annual energy bill of the United Kingdom’s 26.3 million households, with onshore wind power adding only £4.68, according to Ofgem's recently published RO annual report for 2010/11 and Ecotricity's analysis.
The RO is the main support mechanism for encouraging the growth of renewable energy in the UK.
Meanwhile, the rising cost of imported gas added around £120 to energy bills last year, according to Ofgem's Electricity and Gas Supply Market Report.
"We need to reverse those proportions; it's an incredible false economy to throw money at energy market speculators while penny pinching over the one thing we can do to solve the problem long term: make our own energy,” concludes Mr Vince.
The letter says that “as entrepreneurs, investors, economists, scientists, engineers, energy providers, community builders and Members of Parliaments, we are increasingly concerned about the lack of clarity around the future of government support for land-based renewables, such as solar, wind and biogas."
They call for a “decentralised energy market" as a means of making the costs of upgrading the UK's “antiquated infrastructure and transmission losses" more efficiently, claiming it will “deliver savings for taxpayers and provide frustrated investors with new opportunities".
It wants the government to guarantee “the broadest possible ownership of the UK's next generation of energy infrastructure", perhaps copying the situation in Germany, where over half of all energy supply is owned by individuals and communities, and which, they say, has “delivered a 25% cost reduction".
The letter, also signed by financier Ben Goldsmith, calls on the new National Planning Policy Framework to “recognise the huge value of this approach", and for planning inspectors to take into account “our collective needs, both local and national", in building our future low carbon economy.
"In wind alone, the UK has more than 40% of Europe's renewable energy resources – enough to power up our economy three to four times over, generate exports, and provide the tools for communities and entrepreneurs to do their job," they write.
Juliet Davenport, the CEO of Good Energy, another new entrant into the energy market, calls for “a more inclusive approach to the way we invest in our energy infrastructure" to make it “a vehicle for both economic and social investment in communities, towns and regions across the UK”.
“If there is no stable platform for investment in renewables, we cannot expect to generate the backing or scale of innovation needed to make a sustainable difference," adds Howard Johns, chair of the Solar Trade Association.
The letter follows one from former directors of Friends of the Earth sent on Tuesday, slamming Britain's support for nuclear power, owned by foreign companies.
Mr Cameron is not short of advice: authors and campaigners George Monbiot, Stephen Tindale, Fred Pearce, Michael Hanlon and Mark Lynas have also written to him this week in support of nuclear power, which they claim cannot be ignored.
They point out that Germany and Japan, in their attempts to do without nuclear power, are increasing their carbon emissions.
However, Jonathan Porritt and his colleagues do not call for the closing of nuclear power stations overnight in Britain; there is no need to substitute their current generation capacity with coal or gas.
Lynas and co. also claim that nuclear power is cheaper; at issue is whether cost estimates given for building new nuclear power stations and accounting for their decommissioning and the care of radioactive waste are verifiable and accurate.
The Chancellor will be addressing some of these issues on Wednesday; amongst his policy tools for supporting all low carbon forms of energy is the proposed feed-in tariffs with contracts for difference, as set out in the government's Electricity Market Reform White Paper.
Investors will also be listening for any announcements concerning the Green Investment Bank.
Story: David Thorpe, News Editor