Guest Blog Mervyn Bowden: A deal that’s green in its thinking!

I have to admit that I find most Government-led schemes to “improve” various aspects of our lives somewhat cringe-worthy. They conjure up so many varied visions of how our hard […]

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By Sumit Bose

I have to admit that I find most Government-led schemes to “improve” various aspects of our lives somewhat cringe-worthy.

They conjure up so many varied visions of how our hard earned cash is going to be squandered by the faceless politicians and their cronies who have the fortunate and comfortable job of distributing it to those who, aside of those who are genuinely deserving and in need, can be undeserving and, indeed, positively grabbing on occasions.

Let’s face it, the consultation process prior to any legislation is designed to discourage potential respondents through terminal boredom and prevent them providing a “lean and mean” & constructive response. In the energy world there a plenty of examples.

Let’s start with the Feed In Tariff system: Clearly an initially flawed variant on a brief glimpse of the exemplar German model for inspiring all types of renewable generation, the UK version was most obviously designed by directors and shareholders of solar photovoltaic companies with close-knit relationships with those in the political decision-making sphere.

Logic employed appears to have been to take a technology with limited generation efficiency and output and reward it far more highly than alternatives which are several times as efficient and likely to be of far more practical use to the UK economy. A big u-turn followed on the figure paid but how could so many mistakes get through on a scheme that was so heavily debated and “consulted on”? It’s hugely expensive and will find its way back onto everyones’ bills.

Next, the Renewable Obligation Certificate (ROC): Generally one of the better schemes to give long term incentives to deserving forms of generations, particularly when revised to produce a tiered system. As with all schemes, this has had a fair amount of tweaking to respond to lobbyists and others with vested interests in the huge capital sums involved. Undesirable as this tweaking is, it has at least managed to correctly incentivise more appropriate forms of generation, such as anaerobic digestion, which solve a number of sustainability problems quite effectively.

Onto Enhanced Capital Allowances: Designed by accountants for the benefit of tax inspectors I suspect, this scheme has probably only been adopted by the big corporates! For small companies, or those who can’t afford expensive advisors, this is a non-starter – far too complex and difficult to understand.

Ah, EPC/DECs: two examples of yet more severe forms of bureaucracy drain the lifeblood of energy efficiency funding by confusing everyone involved and coming up with strange, inexplicable outcomes. When did an EPC or DEC actually describe the energy performance of a building in any adequate or useful way?

As for the CRC – well, no comment.

And finally the latest masterpiece, The Green Deal!

By definition, any measures which give away (oops, I meant incentivises) through use of taxpayers’ money any sort of scheme need to be crystal clear in their objectives, totally transparent and easily measurable. The fact that hardly anyone seems to have heard about this scheme and even those that have would be hard pushed to describe its contents, is decidedly worrying.

I do wonder whether the “Green” part of this deal refers to those who will potentially take up the loans on offer rather than the environmental causes supposedly espoused. In my humble opinion, those with the greatest need of an energy efficient home will be those who are most susceptible to fuel poverty. Given that few people have heard of the scheme, still less understand how it can help them, there is a major risk of completely missing whatever targets were intended here.

So that leads me to a final proposition. Energy a Government cash-cow?

Energy is being taxed more and more heavily, which immediately tips more people unnecessarily into fuel poverty – a kWh of gas or electricity costs the poor exactly the same as the rich but takes a far greater toll of their limited budget, energy pricing is becoming even more of a political football, levies for things like the Feed In Tariff are finding their way onto bills as a surprise addition, pass-through charges rise massively ahead of inflation each year.

All these factors make it even more important that any subsidies and incentives in this sector are clear, simple, measureable, effective and, hopefully, reduce the energy cost burden on those who suffer the indignity and genuine hardship of fuel poverty.

Mervyn Bowden is the Managing Director of Intuitive Energy Solutions Ltd.