Tony Lodge: Set out your priorities, Mr Huhne, and give Britain the energy policy it needs

"We will set a target for 40 per cent of UK electricity to come fromclean, non-carbon emitting sources by 2020, rising to 100 per cent by 2050, block any new coal fired power stations without immediate carbon capture and reject a new generation of nuclear power stations."

This was not the election manifesto of a fringe green pressure group, but that of the Liberal Democrats; coalition partners in the new Government and unexpected holders of the hugely important energy portfolio.

What are we to make of it? The Lib Dems' written coalition agreement with the Conservatives tells us that they can abstain in the Commons votes on new nuclear power stations, that new coal plants must be fitted with "sufficient" carbon capture from the outset and they will support the full establishment of feed-in tariffs which will force electricity companies to buy a certain amount of renewable energy. The Lib Dems' over-ambitious renewable targets have been dropped.

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As with so much in the coalition agreement, it will be very interesting to match the rhetoric with concrete delivery so as to avoid the UK's looming energy crisis. Concerns include reassuring investors, particularly in the nuclear and clean coal sectors, that they have a friend in Chris Huhne, the Energy Secretary. He will need to move quickly to set out his priorities, especially given that the energy portfolio has effectively remained rudderless in recent years.

There are a series of EU directives looming which could force the closure of all of our important coal plants by 2022. The new Energy Secretary will need to move quickly to make sure the EU's Industrial Emissions Directive, particularly, is amended to allow us to continue to use coal to generate electricity. If this is not successful, then he should be prepared to act in the national interest and derogate from the directive in order to secure energy supply and keep prices down.

New energy statistics should concern Mr Huhne. Compared with the first quarter of last year, imports of natural gas were a staggering 31 per cent higher this year and gas use for electricity generation was 18 per cent higher. In the first quarter of 2010, and for the first time since 1968, gas imports exceeded home production. Britain has now become overdependent on imported gas for its energy needs. The UK's exposure to gas price spikes and and the consequent higher energy bills is now guaranteed.

Electricity supplied by coal is 17 per cent down on last year with gas up by a huge 25 per cent. Worryingly, coal production from ongoing deep mines was down by nearly 30 per cent on last year, with overall coal demand down by 13 per cent. Clearly, coal is suffering from a lack of a clear strategic policy for the future of the fuel with investors

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looking to invest in more gas plants, thus exacerbating our gas

dependence. In short, gas is quickly displacing coal.

Deep concerns exist about the last government's so-called clean coal competition, its overwhelming support for wind over other important and potentially more effective and less intrusive renewables, such as energy crops and tidal, alongside the almost blind approval for more and more gas fired power stations.

It is the new Energy Secretary's job to tackle these issues, provide leadership and get a grip. He will need to take a very clear and early lead on nuclear if we are to have new reactors operating by 2020, at the earliest.

Yorkshire's role and lead in this sector should be impressed on Chris Huhne by his boss, Nick Clegg, the Sheffield Hallam MP and now Deputy Prime Minister. Yorkshire generates far more electricity than it needs – it is the powerhouse of the UK – with significant coal, gas, renewable and other power plants operating 24/7. It stands to lead in the clean coal revolution alongside huge potential developments in the green energy sector. But a lead will be needed and Mr Huhne will need to take it, and quickly.

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New clean coal development, and policy support for existing coal plants, some of which straddle the M62, is important in order to keep electricity prices competitive and also to provide financial certainty for ongoing deep mines. Mr Huhne can also look to Yorkshire for new incentives and initiatives to limit fuel poverty and boost household energy efficiency.

In Wakefield, the council is trialling a new Green Plug, designed by a local company, Logicor, in 70 council houses to test its impact on energy bills. The trial will measure the energy savings from the

fitting of the Green Plug to selected home appliances. Initial research shows that the plug can save a household hundreds of pounds a year.

The Energy Secretary has also called for a huge expansion in

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renewables. This could represent a huge waste of scarce public money, through ROC (Renewable obligation certificates) subsidies, unless renewable energy storage policies are also supported. We can now store intermittent renewable energy from wind and solar and use it later as a 24-hour fuel.

Mr Huhne should visit Sheffield and see the hydrogen energy storage technology in the factory of ITM Power, it is fascinating and can help rescue the often under-siege renewables sector.

Many analysts were surprised by the appointment of Chris Huhne. It is a sign of the Conservatives' determination to secure the coalition that the energy brief was offered up, but it is also a huge risk. At a time when difficult decisions need to be taken to secure our energy supply, keep prices down and potentially oppose EU directives, Mr Huhne must now act in the national economic interest and forget previous Lib Dem policy hang-ups.

Tony Lodge is a research fellow at the Centre for Policy Studies.