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How long can it be before green energy subsidies are cut?

NOTE: Lawney asked us to check carefully as he usually has is re-read in house but his side-kick is on hols! An, he says, he failed his O-level English “dismally”!

We are all aware of the enormous deficit in the UK that, incidentally, is still growing and will continue to grow for a few years yet. How is this ever going to be brought down to manageable proportions? And, just as importantly, how is the UK going to engineer economic growth rates that will make this enormous deficit manageable?

My guess is that welfare generally will be cut even more, public sector pensions will be further reduced, the age when pensions will be able to be taken will rise to 70ish.

Furthermore NHS funding will be kept at current real levels which means efficiencies will have to be squeezed out of their operations to cope with growing longevity and increasing costs; however  given that doctors and senior personnel  are significantly overpaid and wastage is everywhere in the HNS efficiencies should be achievable for a few years to come.

These radical changes are happening and  will be reinforced when, whoever wins the next election, realises that our deficit must be radically cut over the longer term (not just maintained or conveniently forgotten about) otherwise we will be in danger of going the same way as Greece and Portugal.

Set against that background what is the chance of green subsidies either being enhanced or remaining the same when the government considers it energy/climate change policies?

When the chips are down UK PLC will have to rely on the most cost effective way of reducing our carbon emissions. That may well be carbon capture at coal fired power stations, nuclear power and some gas fired stations. Renewable energy is very expensive to subsidise may well  be one of those things that could be  forgotten about in the race for reduced spending.  Whilst any government policy changes should not be retrospective, as that could be challenged in the courts, subsidies are likely to be reduced in the medium term, anyone who believes this is unlikely should just look at the PV market support that has been recently slashed!

When will this happen? my guess is after the next election when it finally dawns on the incoming government that this is a bigger mess  than most people believe. No matter which party gets back in they will be confronted by the awful truth that we are living in cloud cuckoo land and the anaemic levels of GDP growth will struggle to support our accumulated deficit.

So why are we (Eco) continuing to develop green energy plants? Simply because we believe we can get them established before the next election. Anyone planning a large project that takes five years to develop should think very hard about spending too much money on it.

I hope I am wrong in my thought train but don’t forget the last time we had a recession like this in the 20s and 30s it took 15 years of stagnation and low growth before the second world war came along after which we had a real return to growth.

Trelawney Dampney, MD at Eco Sustainainable Solutions

 

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