His speech was his first significant one on the environment since he came into office, and was an attempt to confirm his commitment to renewable energy. But environmental campaigners and green energy investors had hoped for a more firm policy speech that would encourage investment in an area that has been rocked by uncertainty and government divisions.
Cameron: Renewable energy ‘vital to our future’
As reported by Worldwise Investor last week, Cameron had been under fire recently from his own backbenchers, who openly opposed the development and subsidising of green technologies, particularly wind power. At a time when the oil and gas industry received a £3bn tax break in the Chancellor’s recent budget, and when green energy subsidies were being slashed, the government’s mixed messages were jeopardising green investment.
At CEM3, Cameron told delegates he ‘passionately believed’ that the growth of renewable energy is ‘vital to our future.’
With global energy demand forecast to increase by 40 percent in the next 20 years, Cameron said, ‘we urgently need a more diverse, cleaner mix of energy sources that will give us energy security without causing irreparable damage to the planet.’ He said that nuclear energy, cleaner coal, oil and gas, and carbon capture and storage will all have an important role to play alongside renewable energy.
He said he had made good on his promise to be the ‘greenest government ever,’ saying the UK is ‘one of the best places for green energy, for green electricity, for green investment and crucially for green jobs anywhere in the world.’ He cited examples such as payments to businesses that generate their own renewable electricity, the first green investment bank, his carbon capture and storage programme, and the largest offshore wind market in the world, as proof of his achievement, as well as the fact that 10 percent of our energy needs were met by renewables in 2011.
We need cheaper energy, says Cameron
Whilst Cameron claimed the UK’s efforts in recent years to develop and encourage investment had made the renewable energy market here possible, he said the UK and other countries now faced a new challenge: making it affordable.
‘At a time when higher gas prices are leaving families and businesses struggling with their energy bills…and when we are fighting to get to grips with our debts, we don't just need greener energy – we need cheaper energy too,’ Cameron told delegates. ‘Today renewable energy is still relatively expensive.’
His remarks were criticised by business groups and environmental organisations from the Climate Group to WWF-UK, who said he continued to portray renewable energy as a burden and unaffordable – a lack of faith which will only sap confidence from investors. In addition, his speech had originally been planned as a keynote policy speech, but instead was reduced to seven minutes of introductory remarks, which fuelled criticism from Labour.
New investments and industry partnership for North Sea
Cameron said in his remarks that ‘one of the biggest opportunities’ for renewable energy investment lies in the North Sea. He praised the way the private sector and government worked together to help give Britain a competitive advantage in North Sea oil and gas from the 1960’s. And so he called on ‘that same partnership between government and business’ to bring about another revolution in the North Sea by investing in off-shore wind power and carbon capture and storage. To that end, Cameron announced a new industry partnership comprising 20 companies, committing to ‘the long term vision of a second renewable energy revolution in the North Sea.’ The partnership will look into ways to maximise the use of wind energy from the North Sea and research ways to bring down its cost.
However, Cameron will have to realise this vision without the help of Shell, who announced it would not invest in off-shore wind farms in the North Sea, saying the numbers ‘didn’t add up.’
Along with the North Sea partnership, other new clean energy investments were announced at the summit. A £300 million biomass project by Helius Energy at the Port of Bristol was also announced, while E.ON said it was awarding a major contract for the installation of cables for its Humber Gateway offshore wind farm to British company Balfour Beatty. Meanwhile Eneco and EDF are set to form a joint venture to develop the Navitus Bay offshore wind farm to the west of the Isle of Wight.
With the government promising to meet 20% of its energy demand through clean sources and with aggressive targets to cut carbon emissions, many business and environmental groups may feel that David Cameron still needs to convince investors of his commitment to the green agenda that he promised in his election campaign.