Ed Davey has managed to win his first major battle as Energy Secretary – against the might of the Treasury, no less. James blogged earlier in the week that the battle between Lib Dem and Tory on cutting subsidies for onshore wind generation would be a test of how well the coalition is actually working, and this morning’s report in the Financial Times that George Osborne and Davey have managed to find a compromise is an illustration of that partnership in action. The newspaper reports that the dispute became so heated that Nick Clegg and David Cameron intervened to hammer down a final agreement.
In the blue corner, Osborne was concerned not just by the effects of green policies on the competitiveness of British industry, but also by the fierce opposition to onshore wind within his own party. Don’t forget that 101 Tory MPs wrote to the Prime Minister in February demanding that the subsidy be cut. In the yellow corner, Davey is desperate that the coalition retain the ‘greenest government ever’ title – and he’s written a piece for ConHome this morning claiming just that – and keep his own party happy.
The deal itself looks like a win for Davey: the Treasury has conceded on its original demand that renewable obligation certificates for onshore wind be cut by 25 per cent, and has settled for the Energy Secretary’s suggestion of 10 per cent. But Osborne has secured other concessions which sweeten the deal a little for Conservatives, too. There will be a review in 2013 of the cost of onshore wind Rocs, at which point further cuts could be introduced. And the Energy and Climate Change department will make what the FT describes as a ‘firm commitment to the continued use of gas in energy production in the UK for decades to come’ to reassure gas investors. A statement by Lord Marland in the House of Lords is expected later today.Tags: Ed Davey, Energy, George Osborne, UK politics