The two main criticisms of the government’s new energy security strategy are fair. The tiptoeing around onshore wind, which got gentle words of encouragement but no change to planning regulations, looks a case of political cowardice. It is perverse to apply a handbrake to “one of the cheapest forms of renewable power”, to use the government’s own description, when public opinion is broadly supportive of turbines on land. Objections from Tory backbenchers should have been ignored.
Equally, the lack of new measures on energy efficiency is bizarre since every serious body, from the International Energy Agency to our own National Infrastructure Commission, has been banging the drum for ages. “A gradual transition following the grain of behavior” translates as a win for the cold hand of the Treasury.
There were two clear positives in the mix, it should be said. First, the target for more offshore wind is genuinely ambitious. A fivefold increase in capacity to 50 gigawatts by the end of the decade is a significant upgrade on the previous aim of 40GW. The target may even be achievable given the current rate of progress. And from the perspective of energy security – the focus of this policy, do not forget – offshore’s bigger turbines and higher load factors are always going to score well versus onshore.
Second, solar was given a boost with the aim (though not a target, note) to increase capacity fivefold by 2035. It is illogical that the government seems more willing to flex planning rules for solar than for wind, but solar is the quiet success story of the renewables revolution. It has outpaced every cost projection over the past decade. Expansion looks the easiest to deliver.
Then, though, one comes to the meat of the plan. The big bet on nuclear is, to put it mildly, hopeful. The government is trying to replace current capacity that will largely go offline by 2050 and also double nuclear’s share of electricity supply versus today’s position. The plan strains credibility. Up to eight new reactors – call it four new two-reactor plants the size of Hinkley Point C – is an enormous undertaking.
The best that can be said is that it is possible to imagine how events could, possibly, run favorably. Hinkley could arrive within its revised timetable without further cost hiccups. Sizewell C in Suffolk, the next plant on the block, could attract the desired rush of private-sector investors under a new financing model that would allow the juice to be priced within the £ 60- £ 70 a megawatt hour range of political acceptability. And success in financing Sizewell could broad confidence and get the show rolling.
There are, though, a lot of assumptions in that list. The biggest unknown is whether the government is prepared to back the EPR design – the one used at Hinkley and set for Sizewell – for all the new plants. Logic says it should because mixing and matching designs is a recipe for higher costs and surprises, a point stressed by energy analyst Peter Atherton. The productivity gain in constructing Hinkley’s second reactor, for example, is said to be 15%. In a complex process, replicating one design has demonstrable value.
The government is not, though, at the stage where it can have sufficient confidence to back EPRs wholeheartedly and mean it. Talk of “leading the world” in nuclear construction should therefore be filed under “believe it when you see it”. You have to know what you plan to build to make such boasts. There is an alarming nuclear-sized question mark at the heart of this strategy.
Shareholders push supermarkets towards living wage
See, resolutions from agitating shareholders can make a difference. Well, the tale of two pay rises for frontline staff in the supermarket sector cannot be attributed directly to the resolution filed at Sainsbury’s by the campaign group Share Action with backing from Legal & General among others. But it probably helped to concentrate minds in the boardroom.
Tesco is raising its minimum hourly rate of pay by 5.8% to £ 10.10 from late-July. Meanwhile, Sainsbury’s is expected to lift the rate for staff in outer London from £ 10.50 an hour to £ 11.05, meaning those workers will join colleagues in the rest of the country in getting the real living wage at a minimum.
The shareholder resolution called on Sainsbury’s (and, by extension, its main competitors) to get itself accredited as a real living wage employer, which would require it to go further. The commitment has to be permanent and third-party contractors such as cleaners and security guards have to be included.
But perhaps the pace is quickening. It should. Large supermarket chains should be able to meet accepted definitions of living wages.