'Let renewables fight it out for subsidies'
A Westcountry MP who was yesterday appointed minister for rural affairs wants wind and solar energy subsidies slashed to curb spiralling household bills.
George Eustice, Conservative MP for Camborne and Redruth, told the Western Morning News that developers of otherwise uneconomic "green" technology should "fight one another" to get financial support.
The Taxpayers' Alliance has just claimed every British household will pay an average of more than £400 in higher bills to help otherwise uneconomic carbon-free technology meet targets by 2020.
Mr Eustice was an adviser to Number 10 on energy and climate change issues before yesterday being named a junior minister in the Department for the Environment, Food and Rural Affairs in the reshuffle.
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His comments come amid Labour leader Ed Miliband's plan to freeze energy bills and Tory and Lib Dem Cabinet ministers warring over plans to cut "green" subsidies.
Speaking to the WMN yesterday before his appointment, he said: "There is an argument that the level of subsidy paid for wind and solar is still too high and this is being passed on to electricity bills.
"We need to replace the current subsidy system with a highly competitive 'Dutch auction' or tender process where renewable energy developers fight one another for the right to install new capacity at the cheapest possible price."
He argues his proposal would address the issue of varying costs and levels of efficiency between the different technologies.
At present, the so-called Renewable Obligation guarantees a subsidy based on the technology – be it offshore wind turbines, onshore wind farms, biomass plants, landfill gas sites or hydro power plants – rather than how effective an individual scheme is.
Mr Miliband last week promised a 20-month energy price freeze should Labour win the general election, saving the typical household £120 between May 2015 and January 2017. The Opposition leader said the freeze would allow time to cut bills long-term and stick to "green" power targets too. But critics argue it will be impossible as subsidies are at the root of the problem.
Tory ministers attacked Labour's move as a "gimmick" and claimed Mr Miliband was taking his party "back to the 1970s" by reverting to left-wing interventionism in the economy. They have also blamed Mr Miliband's "green" policies when he was Labour's Energy Secretary for helping to force up bills.
Mr Eustice told the WMN the Labour plan was flawed as energy companies could hike bills before the freeze comes into force.
He said: "Ed Miliband's proposal was not thought through and is the wrong way to tackle a genuine problem. It could drive up prices in the short term and lead to energy companies gaming the system. The right response is to make the market more transparent and competitive."
Subsidies are paid for by consumers and businesses in their bills and passed to green energy generators. A Taxpayers' Alliance analysis shows the total subsidy will be nearly £22 billion by 2020.
In May, Mr Eustice was named among an eight-strong team of Conservatives developing policy within No 10, and was charged with advising on energy and climate change. Supportive of wave power, the former farmer has raised concern over the effectiveness and visual impact of wind farms, and has called for a planning clampdown to block the march of turbines and large solar farms. Both technologies have caused deep divisions in the Westcountry.
His stance brings him in line with his new boss, Tory Environment Secretary Owen Paterson, an outspoken critic of wind farms who has clashed with Lib Dem Energy Secretary Ed Davey over their worth. Chancellor George Osborne reportedly wants to use his autumn budget statement to raid the power giants' energy tariffs by slashing subsidies. But he faces opposition from Mr Davey, who has argued there was "no justification" for neglecting carbon reduction targets.