The Tories' green energy plans include huge offshore wind farms, tidal power and more nuclear power generation
Huge offshore wind parks and new nuclear reactors to be financed by a state-backed Green Investment Bank would be built under plans to reform energy policy and meet tough emission reduction targets to be announced by the Conservatives today.
In a package of measures with far-reaching implications for industry and consumers, David Cameron is also expected to call for a floor price for carbon to be set as a way of stimulating investment in cleaner forms of energy.
The policy will punish coal and gas-fired power generation while benefiting producers of wind and nuclear electricity. Greg Clark, Shadow Energy Secretary, did not reveal details, but said: “We believe that the time has come to establish new financial mechanisms to make it easier for people to invest. At the moment it is too difficult.”
The policies will also include a measure that marks a return to the same principle used to defeat Nazi Germany in the 1940s. Mr Cameron will for the first time set out plans for government-backed green “war bonds” to help to finance energy projects of up to £200 billion that are considered critical for Britain to meet its goal of cutting carbon emissions by 34 per cent by 2020.
The scheme will allow money to be put into clean energy through the purchase of Treasury-backed “Green ISAs” linked to renewable projects including tidal, solar and wind farms.
The Conservatives also announced the creation of a working group to examine how to create a public-private funded Green Investment Bank to provide additional financial support. Loosely modelled on Germany’s KfW bank, which invested nearly €20 billion in environmental projects last year, it would form a key plank of a Tory push to make Britain a global centre for environmental finance and green manufacturing of everything from wind turbines to components for nuclear plants.
The Tories said the bank would consolidate existing sources of funding for green energy, such as the Carbon Trust and the Marine Renewables Deployment Fund. It would act as an intermediary to help to attract and package green energy investment opportunities.
Labour criticised the plans. Lord Hunt of Kings Heath, Energy Minister, said that they amounted to “little more than tinkering with the energy market”. He said: “The Tories would create uncertainty and push up prices.”
The Tory report invoked the spirit of Sir Winston Churchill, quoting the wartime leader’s view that, at a time when North Sea gas supplies are being rapidly depleted, energy security lay in “diversity and diversity alone”.
The party said that a Conservative government would secure UK energy supplies by promoting diversity in energy supplies and more gas storage to withstand supply shocks. The plans are also expected to include incentives to encourage development of nuclear power stations by exempting nuclear electricity from the climate change levy — a tax levied on power generation that is paid by utility companies.
Wind energy is exempt but utilities must pay the levy on all electricity generated from coal, gas and nuclear power stations — even though nuclear generation emits no carbon dioxide.
Mr Clark said that the party’s energy policy was designed to meet four goals: ensuring security of supply, cutting emissions, maintaining affordability and maximising the industrial opportunity available to Britain.
The Tories are likely to give fresh details of £6,500 grants for energy efficiency improvements for all 26 million homes in the UK. The money would come upfront via a loan programme, with consumers repaying a proportion of what they save on their energy bills.
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