Better late than never for clean energy in UK

CONSUMERS have to worry about high energy prices, the risk of brownouts and the environmental necessity of clean, low or no carbon energy.

These concerns have become political concerns. The election cleared the Miliband- inspired political uncertainty around energy. Amber Rudd, the new Secretary of State, has the opportunity to deliver real value for energy consumers, just like Ros Altmann is for pensioners.

We know a fifth of the UK’s existing power stations are scheduled to close by 2020, and unfortunately investment i nto new energy projects has fallen over the last five years as political risk was too high.

But clean energy technology has moved at a fast pace, and other countries have raced ahead of us with renewables – Germany is likely to become the world’s first ‘Green Superpower’.

The unintended consequence and unexpected good news is that the UK can leapfrog intermediate technology and seize a ‘ last mover’s advantage’ as the price of clean energy reduces.

As the Government’s outstanding energy economist Lord Stern has said, enough sunlight hits the earth every 90 minutes to power the planet for a year.

Now, fast improving technology for capturing the sun’s rays means solar energy is experiencing the equivalent of Moore’s Law in computing – the observation made in 1965 by Gordon Moore, the co-founder of Intel – that the number of transistors per square inch on integrated circuits had doubled every year since these circuits were invented.

We are seeing exponential increases in capacity with accompanying falls in price – great news for customers.

Renewables – particularly sun and wind – are becoming a genuinely economic proposition, without a complicated subsidy regime that is expensive for taxpayers and consumers. Subsidies distort: notably, we see countless examples of windmills in beautiful countryside where there is no wind.

Subsidies also discourage innovation, and keep prices high. The Government is quickly clarifying when the price support mechanisms will be withdrawn and the next step is to decide to allocate some of the subsidy money to r esearch and development.

The global Apollo programme would be a terrific place to start. Promoted by UK Climate Change envoy Sir David King and six energetic Lords who are energy and climate change experts, it calls for publicly-funded research and development to put the UK at the forefront of renewable energy generation.

The UK has to meet its UN obligations and the EU target of cutting carbon emissions by 40pc by 2030. So the UK has to move towards renewable energy sources. Last year they accounted for only 6pc of energy generation. But we need to do this without price hikes f or consumers.

This all but rules our nuclear, which is low carbon, but prohibitively expensive. The estimated £25bn Hinkley ‘C’ looks like another potential chapter in the book of government blunders.

Consumers will pay over £ 100 per megawatt hour when the market price is £40£50. And on top of this there are nuclear decommissioning costs of around £80bn.

As the UK’s largest direct investor in infrastructure, Legal & General can help. We’ve already invested over £6bn of our £15bn target in UK infrastructure. Now we want to make more direct i nvestments i nto cl ean energy: so far, we have only invested £100m in solar.

BRITAIN has some of the best environmental conditions for renewables in the world, with strong wind, solar, tidal and wave resources. We can take a balanced approach to energy generation, prioritising research and development, maximising flexibility as we move towards renewable energy targets.

We owe it to our children and grandchildren: we have already saddled them with over-priced housing and too much debt, including student loans. Let’s not add environmental damage, unaffordable £100 per MWH electricity and a £100bn nuclear decommissioning bill to the toxic mix.

Now is the time for the Government and investors like ourselves to get moving.