National Grid chief calls for more renewables subsidies

Tim Webb and David Adam
The Guardian, Tuesday 24 March 2009

The government must draw up a masterplan to meet the UK's ambitious targets of providing 15% of the country's power from renewables by 2020, National Grid's chief executive, Steve Holliday, has warned.
As investment in alternative sources of energy dries up because of the credit crunch, Holliday called for more subsidies to make sure enough wind farms and other sources of renewable energy are built in time. He also called for tighter regulation of energy markets, even at the expense of competition.
Analysts estimate that £234bn total investment in energy will be needed by 2025, to be paid for by consumers. Holliday said that reducing energy demand - and bills - was the only way to afford the vast sum. Smart meters installed in homes, for example, can ration electricity supply during peak demand by switching off some appliances for a short period.
But with the cost of capital for developers increasing, National Grid executives are frustrated at what they see as a lack of joined-up thinking and urgency displayed by the government over the 2020 targets. Holliday said: "We should be very worried there is not a masterplan. If you set an aspiration you [should] work out a plan to do this."
This summer the government will publish several policy documents on renewables, how to promote manufacturing of clean energy equipment such as wind turbines, and how to meet the UK's carbon budgets.
But National Grid is concerned that they could prompt another round of consultations, further delaying decisions. The firm is also worried that the election of a Conservative government next summer could lead to a review of any decisions made.
There is a danger, Holliday said, that "we are going to wake up and say we have not got a chance of meeting the target because of the time we have lost".
The government signed up to the EU targets in early 2008, agreeing to source 15% of its energy from renewables by 2020. Over a third of all electricity generated will have to come from renewable sources, up from about 3% today.
A consultation on how to meet this target will be concluded this summer. "Why does it take a whole year?" asked Matthew Lockwood, from the IPPR thinktank. "One of the biggest problems around this area is confusion and people not being clear about what the government is doing. There is a huge vacuum. Announcements are just dribbling out."
He said that the delay over the strategy on how to roll out smart meters was a good example. The government originally intended to announce its decision last May. This was pushed back to November and the industry is still waiting.