Leader

Energy policy is now set by the Treasury – should we care?

A question that often comes my way – and that I’m starting to dread – is "so, what’s on your agenda at the moment?"

Energy and water have always been interesting beats to cover but at the moment there is a dizzying array of topics to try to keep track of. A quick overview of Utility Week coverage from the last week spans the evolution of market mechanisms for delivering clean power, the allocation of those and other costs, the challenge of tackling mounting utilities debt, public control of – and influence on – energy and water assets and the shifting role of regulation in all of this.

In the case of energy, much of this momentum has been driven by the overriding concern about affordability. It is, though, a belated recognition that some of these long-standing arguments about cost allocation and market design always had real-world implications, and should really have been tackled years ago.

Interestingly, these conversations are being led not by the Department for Energy Security and Net Zero (DESNZ) but by the Treasury. This clearly represents a shift in the balance of power – quite literally – within government and has its pros and cons. With Ed Miliband’s departure, DESNZ has lost an influential figurehead who seemed to consistently come out on top in funding fights. While Miatta Fahnbulleh does not appear to have the same autonomy, she definitely has the Treasury’s attention on energy matters in a way I don’t remember seeing before.

It is very welcome to see the bean counters grappling with questions that have long graced the pages of Utility Week - but that does not mean there are going to be any easy answers.

Chancellor John Healey’s glib statement that the government will “only buy and build new projects when they lower bills and when they can connect to the grid” masks a whole host of thorny issues. A genuine effort to bring down bills now and into the future requires a web of interconnected decisions on the level of infrastructure the country requires, how decentralised the system becomes and how energy is billed and paid for.

I am cautiously optimistic that this might be the moment we start to actually make inroads on some of these issues. The penny seems to have dropped in government that there is not a single soundbite or policy that will deliver an affordable, clean energy system.

So, what’s on my agenda? Well, pretty much everything, all at once at the moment. But it’s refreshing to see genuine momentum across all these areas.

At the risk of giving myself an even more complicated answer to that question, I’d like to see water issues get the same level of forensic scrutiny. Movement on regional water councils is a positive step, but if the government is serious about reshaping the water sector, it will need to bring the same rigour to the detail as it now applies to energy, across all areas of reform.