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Energy bill ‘unworkable’ – Tim Yeo

The Treasury has been accused of making the energy bill “unworkable” by the Commons Energy & Climate Change Select Committee and its Conservative chairman Tim Yeo MP.

The legislation would scrap systems of subsidy for large-scale renewable energy and encourage nuclear power through a new system of ‘contracts for difference’ – where companies would sign long-term agreements to supply and pay for low-carbon generation.

It is well-known that the DECC and energy secretary Ed Davey have been engaged in a long-running fight with the Treasury and chancellor George Osborne over energy policy and subsidies.

The energy committee has said the resulting legislation is over-complicated and that the proposed spending cap to limit green levies that can be passed onto consumers in energy bills could introduce an “unacceptable” level of risk to companies looking to invest.

Yeo has attacked the plans, which he said would create the risk of higher household bills, limit investment and reinforce the dominance of the ‘Big 6’ energy companies.

He asserted that the Treasury demanded changes to the bill to placate Tory backbenchers who oppose the construction of new windfarms in their constituencies. Major cuts to support for onshore wind would “cause serious damage to the industry,” he said, highlighting that wind is the cheapest way to meet renewables targets.

Yeo said: “The Government is in danger of botching its plans to boost clean energy, because the Treasury is refusing to back new contracts to deliver investment in nuclear, wind, wave and carbon capture and storage.”

In an interview with the BBC, he specifically blamed Tory backbenchers, saying: “Under the guise of reducing bills for consumers, the chancellor will actually be increasing consumers’ bills. I don’t know if the back-benchers realise this but surely the Treasury does – yet it keeps pressing on with an action that’s clearly political to assuage MPs who don’t like turbines in the countryside.”

Gordon Edge, director of policy at the wind industry body RenewableUK, said botched reform could lead to “less diversity in the market, higher prices for consumers, over reliance on imported dirty fuels, and the potential of tens of thousands of low carbon jobs lost”, and called for further clarity on the proposals.

Davey commented: “The energy bill will enable us to make radical changes to the electricity market that deliver investment in secure, low carbon, affordable energy. We are determined to use the pre-legislative scrutiny period to develop a robust and effective bill with the interests of both consumers and investors at the heart.”

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