Experts forecast UK offshore wind industry to focus on Scotland as Amber Rudd is appointed as Energy Minister in new Tory government

Amber Rudd UK Minister for Energy
Amber Rudd UK Minister for Energy

Amber Rudd has been appointed as Secretary of State for Energy in David Cameron’s new UK  Conservative-majority government. She replaces Ed Davey, a Liberal MP who held the post in  the previous coalition government until losing his seat last week.

Rudd – who graduated in History from Edinburgh University – is Tory MP for Hastings, which she first won in the 2010 election. She previously worked in investment banking in the City and as financial journalist.

In a speech she made recently before last week’s election, Rudd laid out her energy policy. She said:

I’m looking forward to the next Parliament, our Conservative Manifesto is clear. We will continue to support the UK Climate Change Act and cut emissions as cost-effectively as possible.

“We’ll do this through insulating a million more homes, supporting new nuclear power, offshore wind, marine energy and other renewables alongside natural gas and by continuing to drive smart-meter roll-out in every home.”

Her appointment has been cordially welcomed by many in the energy industry. But her pro-nuclear and – possibly – pro-fracking policy may generate community opposition as well as widen an energy policy fault-line for or against fracking between Westminster and Holyrood.

Ben Wetherall, Head of Gas at ICIS, said that the election of a majority Tory government would have significant impact on three key energy policy issues. He said:

 Fossil fuel 

Existing coal-fired generation is the surest way of guaranteeing margins until new gas plant comes on so will the Conservative majority government will have to consider whether to alter the carbon price support rate to help improve coal profit margins. And longer term – without the shackles of the Liberal Democrats  –  a Conservative government can more actively pursue the fracking agenda.

Wind generation

The end of the coalition government and the removal of the Liberal Democrats from the Department of Energy and Climate Change (DECC) means an end to subsidies for new onshore wind farms. This was in the Conservative manifesto and with Ed Davey now gone it will be difficult for a weakened opposition to argue the counter point, at least in England.

However the Conservatives will now have to recognise the parliamentary weight of the SNP. The SNP has put renewables at the heart of its energy policy and the industry has the backing of the Scottish public as well.

As a result, we expect onshore wind power development to be centred in Scotland as opposed to England from this point onwards.

 EU Referendum

The rejection of the Labour party by the electorate means that the price freeze threat is gone. However, energy investors will now turn their attention to the challenges and the threat posed by the EU referendum. The UK’s energy supply make-up is to a certain extent defined by EU directives. Investors need certainty. So the implications for energy sector investment are not great, at a time when we do still need to build more plant to guard against shrinking capacity margins.”

Comments on Rudd appointment from around the energy industry:

Maria McCaffery, Chief Executive, Renewable UK
Maria McCaffery, Chief Executive, Renewable UK

Renewable UK: Chief Executive, Maria McCaffery

We wish Amber Rudd well as Energy Secretary. We are pleased to see continuity at the Department following her role as Energy Minister in the previous Government.   We welcome the positive commitments which she has made on reducing carbon emissions, tackling climate change and protecting the environment. We are looking forward to working with her and showing how all the technologies we represent: onshore wind, offshore wind and wave & tidal energy, can help achieve these aims, as well as providing energy security and financial growth for the UK.

 

Hector Grant, Chief Executive, Industrial and Power Association
Hector Grant, Chief Executive, Industrial and Power Association

Industrial and Power Association, Glasgow: Chief Executive Hector Grant

The announcement that Amber Rudd will be the new UK Energy Minister is refreshing news. IPA is pleased to see that a balanced supply is high on the Government’s agenda along with the need to reduce CO2 emissions.

It will be many years before we have sufficient renewable power generation. However in the meantime we will have to rely on fossil with carbon capture and other technologies to meet our carbon reduction targets.

Focussing on home insulation is a guaranteed way of reducing power demand and at the same time, if done in the right way, will reduce fuel poverty – which is a particular issue in Scotland.

 Solar Trade Association: Chief Executive Paul Barwell

We very much welcome Amber Rudd’s appointment as Secretary of State for Energy and Climate Change, and look forward to working with her to make sure solar reaches its full potential. We need stable policy support and strong leadership on solar – just one final push could get rooftop solar to zero subsidy by the time this Government leaves office.

We also hope that Amber Rudd’s experience in finance, her previous experience in the Treasury and her real understanding of the needs of new and growing businesses will mean that she recognises the value that the UK’s thousands of small and medium sized solar companies can bring. 

 

Deirdre Michie
Deirdre Michie

Oil & Gas UK Chief Executive, Deirdre Michie

We look forward to working with the new Government to promote and develop a sustainable future for the industry. We welcome the appointment of Amber Rudd as Secretary of State for Energy and Climate Change; Sajid Javid as Secretary of State for Business, Innovation and Skills; and Greg Hands as Chief Secretary to the Treasury.

These ministerial positions are absolutely crucial to the ongoing success of our industry, which contributes so much to this country, not only through supplying a secure supply of oil and gas, but through the support of some 450,000 jobs and a £35 billion supply chain which is recognised as world-leading.

We have had good relationships with both the UK and Scottish Governments and look forward to strengthening this constructive relationship with the new Government. In order for the UK to thrive in the long term, energy policy needs to be at the heart of economic policy. We are looking forward to meeting the new Ministers as soon as possible in order to support them in understanding the contribution our industry makes, and to outline the issues we face.

For our industry stability is very important, and therefore we also hope to see continuity of office within this new Cabinet.We also wish to emphasise the importance of establishing and maintaining a strong tripartite approach to maximising the economic recovery of oil and gas from the North Sea. 

Paul McCullagh, Chief Executive, Urban Wind
Paul McCullagh, Chief Executive, Urban Wind

Paul McCullagh, Chief Executive of Glasgow-based UrbanWind:

We welcome the appointment of new Energy and Climate Change Secretary Amber Rudd, who has consistently asserted a commitment to increasing green investment and reducing carbon emissions and wish her well in her new role. 

It is imperative that she continues to demonstrate these commitments now that she is in a position to really drive them forward. In particular, it is crucial that she provides the much-needed clarity over the Conservatives positioning on new onshore wind developments that has been sorely lacking in the lead up to the election.

As a growing industry that is a key player in reducing our carbon footprint now is the time for clear, unequivocal leadership, unlocking the potential of on-shore wind energy in the UK to create jobs, increase investment and drive economic growth.

Onshore wind is increasingly being recognised as potentially the cheapest method of energy generation we have available to us. It now needs strong leadership to increase confidence in the sector and avoid the ‘stop start’, hesitant policies of recent years, which have damaged the industry.

We hope to see clear support for small and medium-scale distributed wind that qualifies for the feed-in-tariff. Individual developments of one or two turbines, providing locally-generated power back to the national grid, will be critical if the Minister is to achieve her ambitions of cutting the UK’s carbon footprint.

There is a tremendous opportunity for onshore wind to play a key role in achieving the objectives that Ms Rudd has previously described, as well as to rebuild confidence from the green economy in a Government whose reputation for supporting the sector has been left badly damaged by policy inconsistency over the last five years.

 

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