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FT: Industry dismayed by latest energy row


Lord Heseltine, the Conservative former cabinet minister, has warned that the energy sector cannot gain access to a “wall of money” from investors until the government clarifies its policies after months of indecision and infighting.


His comments were made as coalition infighting over onshore wind farms resurfaced after John Hayes, a new Tory energy minister, appeared to signal the end of such projects.


David Cameron was forced to defend the coalition’s green record during the weekly prime minister’s questions session, saying it had overseen more new renewable power in two years than Labour had in 13.


Mr Hayes had implied an end to new wind power projects, saying “enough is enough” and that it was “extraordinary” that so many turbines had been “peppered” around the country, often against the wishes of locals.


Within hours Ed Davey, the Liberal Democrat energy secretary, had slapped down his junior minister, saying there was no imminent policy change on wind power.


“There are no targets – or caps – for individual renewable technologies such as onshore wind. Nor are there reviews being done of onshore wind on the basis of landscape or property values,” he said.


The coalition row over renewables has been rumbling for months with some ministers arguing the government should drop its low-carbon commitments and concentrate on other priorities.


Lord Heseltine told the FT there were “acutely difficult” long-term decisions that the government had been slow to make over energy.


“There is a huge potential investment programme waiting to come, but it depends on the government giving the signal upon which energy policy for 20 years is going to be based, with all the cost implications,” he said. “Until they do it, the wall of money will not tumble our way.”


Liberal Democrats have increasingly warned about the danger of abandoning support for the green economy.


Danny Alexander, the Lib Dem chief secretary to the Treasury, held a meeting with infrastructure investors on Monday to discuss ways of getting money into schemes.


He told the FT that investors were calling for “policy certainty, regulatory certainty, in a number of areas, particularly on energy and energy investment”.


Denmark’s Vestas, the world’s biggest turbine manufacturer, said Mr Hayes’ comments risked damaging investment prospects for the UK.


“Manufacturers need to be confident there is broad and sustained support for the goods and services they produce,” said the company.


Executives at other renewable energy companies also expressed dismay at the minister’s comments.


“This is better than The Thick of It,” said Bruce Davis of Abundance Generation, a company that allows investors to put money directly into UK renewable energy projects. “John Hayes has allowed politics to prejudice the development of policy,” said Mr Davis. “If you’ve got this flip-flopping going on, whether real or not, it affects people’s confidence.”


Among Tory backbenchers – 100 of whom signed a petition against on shore wind power – there is huge opposition to turbines.


The CBI has called on the government to end the “political ping-pong” over green growth after the Treasury prompted reversals on several environmental initiatives. The lobby group believes that green business will be a “major pillar of our growth”.


But on Wednesday John Cridland, director-general of the CBI, said Tony Blair, the former Labour prime minister, had left the UK with EU renewable targets that were “pretty heroic” in their ambition. “I’m not sure those targets can be achieved in a cost-effective way,” he said.