The green revolution

Last October Ed Miliband, the former Cabinet Office minister and confidant of Gordon Brown, was given one of the hardest jobs in government. Chosen to head the new Department for Energy and Climate Change, he was tasked with charting a path to revolution.

New Labour has long spoken of a future in which Britain would be ringed by thousands of windmills, turning in the breeze to create pure, pollution-free power.

Dirty old coal-fired power stations would bury their harmful exhaust deep underground; underwater turbines would draw energy from the tides. Our homes would be kitted out with smart meters to give us by-the-minute updates on our energy use and carbon footprint.

The vision was there. What was missing was the detail, and it was up to Miliband and his team at the cutting-edge energy department to provide it.

Last week, he revealed the fruits of that labour. The documents comprising the latest iteration of the government’s plan for a green future weighed in at more than 1,000 pages.

They contained a few firsts. The government finally admitted in stark terms that energy bills will have to rise – by 17% for business and 8% for households – to decarbonise the economy.

It broadly laid out how the £150 billion investment required over the next 20 years will be distributed (offshore wind looks like the biggest winner).

Every government department was given a carbon budget. More than 400,000 “green jobs” are expected to be created and no fewer than half a dozen quangos will be set up to oversee the transition to deliver an 18% cut in carbon emissions from present levels by 2020.

Industry, however, was sceptical. It has seen targets come and go before. This is Labour’s fourth energy white paper since Creating a Low Carbon Economy was published in 2003. It is by far the most comprehensive but many of the hardest questions remain unanswered.

How does the government propose to kickstart investment that has plummeted by a third in the past year? Will it step in with a new mechanism if the carbon price remains low? And no new details were given on how the byzantine planning process, the bane of the stuttering revolution, will be reformed.

New Energy Finance, the alternative-energy research firm, described the white paper as “old wine in new bottles” containing “hardly any . . . strikingly new measures to support the industry”.

Instead of a bold, detailed plan, what was produced was a repackaging of previously published programmes. “There isn’t a lot new here,” said Paul Golby, chief executive of Eon UK, the gas and electricity provider. “Policy papers are great but there isn’t a sufficient sense of urgency. Without the details and timetables showing how they are going to reach these targets, policy papers become aspirations,” he said.

Over the next 11 years, the heaviest burden will fall on the power companies. Britain’s power stations, most of which burn coal or gas, produce more pollution than any other source, accounting for about a third of UK carbon emissions.

Today only 6% of our power comes from renewable sources. By 2020, the government envisages a fivefold increase to 30%.

David Porter, head of the Association of Electricity Producers, said: “Both in money terms and in the number of projects, this is the biggest undertaking the electricity industry has ever had to make.”

Wind and nuclear power will be the biggest components of the change. It is estimated that 7,000 wind turbines, both offshore and onshore, will need to be built. Today there are 2,357.

Few think this will happen. Most new wind power sources are envisaged as enormous farms out at sea. This will require even more back-up plants to be built so that power can be provided when the wind isn’t blowing. What is more, laying the hundreds of miles of cables to connect them to the grid will be a hugely complex task. And Britain has virtually no domestic capability to build turbines.

The scale of the challenge facing the wind industry is typical of all “green” sectors. The government has portrayed our scant domestic know-how as a huge opportunity. There is nowhere to go but up, the argument goes, hence the 400,000 promised “green” jobs.

However, Britain simply doesn’t have the cash to emulate America, where the government has earmarked tens of billions of dollars in public funds to kickstart the sector. Instead, it is hoping that it can create a regulatory environment attractive enough to motivate the private sector to put up the billions that are needed.

Golby at Eon, which plans to build up to three nuclear reactors and the largest wind farm in the world, the Thames Array, is not convinced.

He said: “If there is not a clear path to payback on a new plant, we won’t build it.

It’s unclear whether the current market mechanisms will deliver that.”

Tom Murley, head of renewable-energy investment at HG Capital, was more blunt. “The UK is just a hard place to do business,” he said. “America is clearing the decks so people can do this stuff, but Britain doesn’t have that kind of money. They spent it all on bailing out the banks.