Ed Miliband wants to bring power to the people

The Times
June 1, 2009

Robin Pagnamenta

Just don’t push me off the edge,” Ed Miliband grins as he gazes out across Whitehall, posing for a photograph on the rooftop of his government department. Indeed, the Secretary for Energy and Climate Change seems remarkably relaxed. With Westminster in meltdown, with MPs looking over their shoulders, dread-ing the sound of their phone, visibly twitching at the mention of the word “expenses”, here is a minister seemingly able to look forward, not back, to concentrate on the job in hand, not on the scandal du jour.
Which is surely a “good thing”, given that the job in hand is particularly difficult — and particularly important. Britain’s energy future looks uncertain and Mr Miliband is in charge of both keeping the lights on and delivering the Government’s ambitious green agenda.
There is, for example, a yawning supply gap opening up, as a quarter of the UK’s ageing power plants are forced to close by 2015. Supplies of North Sea gas are dwindling, too, leaving Britain ever more reliant on imports of the fuel from Norway, Algeria and Qatar.
And there is the challenge of cutting UK emissions of carbon dioxide by more than a third by 2020, something that Mr Miliband wants to achieve by replacing Britain’s fleet of dirty, fossil-fuel-fired power stations, which generate 76 per cent of the country’s electricity, with low-carbon power — new nuclear reactors, “clean coal” plants and wind turbines, in sufficient numbers and with all the infrastructure needed to support them. Many industry experts raise their eyebrows at such an ambition, but Mr Miliband insists that it is possible.

“There will always be the defeatists,” he says, now downstairs and perched on a black sofa in his rather spartan ministerial office. “People said to me when I started this job that I would never be able to square the demands and interests of those who care about climate change and those who care about energy \ . . . but I think that we can forge a new consensus around energy policy. There is a set of shared interests between the green movement and the industry.” Perhaps so, but meeting these multiple goals to such a tight deadline will be vastly expensive. Ernst & Young estimates that the industry will need to fork out £233.5 billion by 2025 to pay for the changes, stoking fears that millions of families will be forced into fuel poverty as a consequence.
Will consumers tolerate this? Mr Miliband says that they have no choice. “There is no question that there are upward pressures on prices, but people would be misled to believe there is a low-cost, high-carbon future. There isn’t. If we don’t make the transition to low carbon now, all the evidence is that the costs will be higher later on.”
Mr Miliband, 39, was appointed to run the newly formed Department for Energy and Climate Change nine months ago. An MP for barely four years, winning his Doncaster North seat in the 2005 general election, before that he had been a key adviser to Gordon Brown at the Treasury, building on his background studying economics at Oxford and the London School of Economics. When he became the Cabinet Office Minister in 2007, he and his elder brother David, the Foreign Secretary, became the first brothers to serve together in a Cabinet since the 1930s.
Energy is his focus now and he says that a nationwide rollout of so-called smart meters in all 26 million UK households is an “absolutely crucial” first step to cutting the vast amounts of energy wasted in the UK. “The surest route to energy security is energy efficiency,” he says. “[Smart meters] will save more money than they will cost, so this is the closest thing there is to a win-win.” Despite recent financing problems arising from the credit crunch, Mr Miliband also has high hopes for offshore wind energy and argues that fresh incentives unveiled in the Budget will help to shore up flagging investment in the industry.
Nuclear power clearly has a big role to play, too, even if Mr Miliband hardly sounds like the industry’s most enthusiastic advocate. “I’m in favour of it,” he smiles, before adding: “I wasn’t exactly brought up in a pro-nuclear household.”
So has he always been in favour of nuclear power? He dodges the question. “I understand the concerns that some people have, because people associate it [with] weapons . . . but I think it’s wrong to say we don’t go ahead with new power stations.”
There is no disguising, however, the Energy Secretary’s passion for another, newer technology: Carbon Capture and Storage (CCS). CCS, in which coal plants are fitted with equipment to strip out and store emissions, may remain unproven at a commercial scale, but with 50,000 coal-fired power stations churning out emissions around the world, advocates have described it as a pivotal technology that must be mastered if the world is serious about tackling climate change.
In April, Mr Miliband unveiled a new policy to construct up to four new coal-fired power stations in the UK fitted with demonstration CCS equipment. “I have to say to you, we have to make this work,” he says. “It’s a moral and industrial imperative. Without CCS, we are going to find it very hard to get the kind of action we need on climate change.” To emphasise his point, Mr Miliband describes a recent trip to Guangdong province in China, where the governor told him that 40 gigawatts of new coal-fired power stations were planned. That is equivalent to about half of Britain’s entire installed generating capacity.
Under the terms of the UK scheme, power companies would have to apply CCS to a portion of a typical coal plant and would have to fit it to their entire output by 2025. Yet Mr Miliband’s policy on CCS has been criticised for being sketchy on detail, especially over whether or not plants would be allowed to continue operating if the technology does not work. It is a criticism that he rejects, although he acknowledges more work needs to be done.
While all these different initiatives will be needed, Mr Miliband admits that some fundamental, broader changes may be necessary, including a more muscular role for government in the UK energy market. “I think that dynamic markets are at the centre of our energy policy, but . . . the market on its own is not going to ensure that we make the transition to low carbon.”
This summer, for the first time since the 1980s, he plans to set out a vision of the future, with clear guiding principles for how Britain’s energy mix will look in 2030, 2040 and beyond. “It’s not a blueprint but a pathway. I feel that there is a yearning for this to happen among energy companies.”
Mr Miliband, who is also leading Britain’s efforts to secure a global deal on climate change at a United Nations meeting in Copenhagen later this year, is reluctant to give away more, but it sounds as if he has a few more things up his sleeve.
“One thing I have learnt in this job is that people respect you for boldness,” he says. “Given the scale of the problem, people want boldness.” He is unlikely to disappoint them.