What do the parties have to say about energy? Part 1: Conservatives

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What do the parties have to say about energy? Part 1: Conservatives

By |2017-12-19T15:19:19+01:00June 1st, 2017|Energy, Infrastructure, Regulations & Policy|

The General Election is fast approaching and each of the leading parties have now published the manifestos. In a series of articles we will scrutinise their positions on energy and how their implementations would affect your business. Let’s take a look at the current regime first, The Conservative party:

“Competitive and affordable energy costs”

As a first step, The Conservatives want to commission an independent review into energy costs. This is interesting since the Competitive Market Authority (CMA) has just completed a multiyear review of the industry overseen by the current government under the lead of The Conservatives. Are The Conservatives saying that they will do the same thing again? Do they believe they have failed to set out what they wanted to do? What do they think they will find that hasn’t already been studied at length by the CMA?

The Conservatives’ agenda for “competive and affordable energy costs” includes the ambitious aims to

  • have the lowest energy costs in Europe (for both consumers and businesses)
  • ensure a reliable supply
  • meet the 2050 carbon reduction objective
  • establish an industrial energy efficiency scheme for large companies

All of this sounds very positive but the manifesto lacks any statements on how or if these goals are even achievable. Presently the UK are reliant on a large proportion of main land Europe to keep us topped up when the network needs to be balanced.

Only recently we witnessed huge spikes in prices when France took one of their power stations off line which clearly indicates how dependant we are on Europe.

To provide us with the infrastructure we need to achieve these goals, billions will need to be spent. Every network upgrade, every spike in national usage that will be passed to the networks who in turn will pass it to the suppliers who in turn will pass it to the end user – keeping the price inflated, not bringing it down.

“A diverse energy mix”

The Conservatives take a clear stance towards off-shore wind energy. In brief, they see the future of off-shore wind projects primarily in remote islands in Scotland. The manifesto vaguely states that the party will base their post-Brexit energy policy “not on the way energy is generated”. What this means for different forms of green energy production in general and how this will allow the UK to meet climate change goals is not touched upon in the manifesto.

“Backing small businesses”

As part of their “Backing Small Business” agenda, The Conservatives plan to “consult” on how to extend the Safe-Guard Tariff Cap currently applied to micro businesses to SME businesses. They have stopped short of saying that they will implement it.

Industry regulator Ofgem have pushed hard to clean up this area of the industry for some time and have been quite successful. Suppliers now have much less scope for higher tariffs than they once did, but for businesses who overlook their utilities there are still huge penalty costs to be incurred and potential savings consistently go on ignored.

Moreover, the CMA reviewed this area recently and took action. Would a new consultation not just yield the same findings?

It remains as a positive message of the manifesto that they actually acknowledge SME businesses.

Any questions what this could mean for your business in specific? Ask us! And keep an eye out tomorrow for the Labour Party policy review.

Find the full manifesto here.

Find our main article on the CMA Energy Market Investigation here.

About the Author:

Jonathan Reeves