Tuesday, 9 February 2010

The government has the power, it could make us all pay into a green bank

Dan Roberts
guardian.co.uk, Monday 8 February 2010 20.39 GMT

One thing Lord Browne knew better than most was that the energy world is all about power, not money. Sadly, this fact only just seems to have caught up with a British political establishment that thought open markets were all that was necessary. Last week's bombshell from energy regulator Ofgem calling for an end to the UK's liberalised market experiment is still reverberating around Westminster.
Climate change and energy security present urgent challenges to an industry that has underinvested in low-carbon capacity and is over-reliant on imported natural gas. So far, few have articulated an alternative, let alone admitted to the public how much money will be required to fix the problem. The capital-starved foreign energy companies that dominate here show no sign of doing it for us.
Yet one idea is beginning to emerge in government circles that could solve both problems. If energy is going to cost more, why not put the money to good use?
A 20% levy on electricity prices could raise £20bn a year toward a ­government-sponsored ­"green investment bank". Borrow against the equity and within a parliament or two we could fund the £200bn of wind, nuclear and transmission investment that the ­private sector is unable to find. The man who tried and failed to take Britain beyond petroleum would have approved.