I’m delighted to see so many of you here for what promises to be a very interesting night.
Before I start, I must mention the venue.
It is an inspired choice! Luxury meets low carbon.
In 2013 The Savoy won five awards for its commitment to reduce its environmental impacts –
reducing energy consumption by an impressive 30% and greenhouse gas emissions by 3,000 tonnes a year.
So it is fitting that it is hosting the REA’s Annual Awards.
Indeed, once again the REA’s Awards are showcasing the most inspiring examples of how UK businesses, local authorities and communities…
…are investing and innovating to realise the unique opportunities in renewable energy.
I’m also encouraged to hear about the REA’s new Finance Forum. Not just important, but very timely.
It is vitally important that the renewables industry and the wider finance community build strong relationships and share information with each other.
No-one does financial innovation better than us. The City of London leads the world in low-carbon finance. Our industry must innovate with finance as well as technology.
Over time this will reduce the cost of capital for the sector and help renewable energy towards its target of competing on cost with energy from fossil fuels.
But today, I would like to leave you with two very clear messages.
First, this Coalition remains absolutely committed to an ambitious rollout of renewables. Scaling up deployment.
But in the most cost-effective way we can – clean energy embedded in our Long-Term Economic Plan.
Secondly, the energy market of tomorrow will – and must – look fundamentally different to yesterday.
Out goes an industry dominated by a few giant utilities; a monopoly of centralised energy models.
In comes a new, diverse market, rich in innovation, driven by innovation, with an entrepreneurial, dynamic set of market participants.
New actors, new investors, new technology.
And Government policy must support that shift.
Break down those barriers to entry.
Open up the market to new players, large and small.
Not stifle the industry with suffocating regulation.
No one in this room should doubt the Coalition’s commitment to cost effective, value-for-money renewable energy, and at real scale.
Ernst & Young in their latest global report rate the UK as one of the best places in the world to invest in renewables.
Indeed, they rank the UK as the best place on the planet to invest in offshore wind and marine energy.
Last year, against a backdrop of falling investment across the EU, the UK saw record highs, growing investment in renewables by 20%.
Outperforming the rest of Europe, including Germany, by a country mile…
Indeed, I hope that the England football team can replicate this performance with Italy on Saturday night!
So it is not surprising that so many companies are increasingly coming to our shores.
Companies such as DONG Energy, who has committed to invest over £5bn in the UK and described it as “a great place to invest”.
This is all thanks to the significant steps we have taken to grow the sector.
Not tinkering with the system we inherited, but big, bold, important reforms.
I’d highlight two measures in particular: the Green Investment Bank, and our Electricity Market Reforms.
I couldn’t be prouder of the fact that it was this Coalition that established the Green Investment Bank, the first bank of its kind in the world.
The GIB has committed £1.3bn to green energy projects and has mobilised a further £3.3bn of private sector money.
We are already seeing the fruits of this investment.
Earlier this year the TEG anaerobic digestion plant opened in Dagenham - the first of its kind in London.
GIB supported Greencoat Capital which was the first listed offshore wind fund on the UK stock market…
…and a further 6 clean energy investment companies mobilising £1.3bn have followed, opening up the stock markets to a new asset class…
Secondly, the Energy Act last year has put in place the framework for Electricity Market Reform.
A reform that will deliver up to £100 billion of investment by 2020.
This will ensure a historic shift to investment in renewables.
DECC recently signed the first Final Investment Decision contracts.
These will bring forward £12 billion of investment, support 8,500 jobs and generating enough electricity for over 3 million homes.
But growth and change is not without its challenges.
We are introducing long-overdue competition for increasingly established technologies.
Driving down the costs even further and helping us deliver more for less. Squeezing subsidy. Driving cost innovation.
And ensuring that consumers see better value for money.
And costs are coming down.
We have seen a stunning fall in the costs of solar PV, in my time as Minister. Down by over 60% in the last three years.
And during my time as Minister, what a change we’ve seen lso in the deployment of solar!
From a very small start in 2010, over a million people now go to sleep at night with a solar panel on their roof, which bursts into action as soon as the sun rises.
Over half a million solar installations are now in place, many other exciting distributed energy technologies are being delivered at real scale.
But we have only just scratched the surface of the potential for a host of distributed energy technologies.
We’ve gone from a few MW under the last government to close to 4GW of installed capacity of solar alone.
I want us, Government and industry, to work together in a partnership to ensure that we reach grid parity as soon as possible.
In solar, as in other renewables.
I don’t pretend that this will be easy, it won’t, but we shouldn’t let a lack of ambition limit what we can achieve. Not just in one or two technologies, but right across the renewables landscape.
If we hadn’t been ambitious in 2010 we wouldn’t have seen over £34 billion of announced investment in renewable electricity generation, with the potential to support almost 37,000 jobs.
I was with the PM last summer off the coast of Kent, when he personally inaugurated the world’s largest offshore wind array…
…to make us here in the UK the largest producer of offshore wind on the planet…
…and earlier this year Siemens announced plans to build not one but two turbine manufacturing plants in Hull –
representing £310m of investment and the creation of 1,000 direct jobs, on top of construction.
Together, working in partnership, we can ensure that the renewables sector continues to thrive.
Which brings me to my second point. I firmly believe in a different model of the energy sector in the future.
A model which, to be frank, will pose a challenge to bigger scale utility companies.
This model will marry supply and demand side solutions. Bringing to the picture the 3 ‘D’s:
- Demand reduction
- Demand response
- Distributed energy
Distributed energy is central to this vision.
An energy market not of the Big 6, but of the Big 60,000.
Where individuals and organisations generate their own electricity – in part or in whole – at scale.
Community-scale and – importantly – utility-scale energy, working hand-in-hand.
We stand today, closer than ever, on the threshold of a ‘power to the people’ revolution.
Empowering and helping to drive down costs for consumers as well as putting pressure on outdated, monolithic business models.
Already, local generation is spreading rapidly.
Almost 550,000 homeowners and businesses have registered for the Feed-in Tariff, up 26% on last year.
And I don’t just mean solar. There are a host of new technologies in the pipeline, such as combined heat & power and coppiced biomass.
We should learn from countries such as Denmark, where distributed energy provides a third of their heating and electricity.
Or the Netherlands, where it provides almost 40% of energy.
To achieve this vision, Government needs to provide three things.
As someone with a background in finance, I know how important this is to your investors and backers.
And I hope you will see, as we finalise implementation of the reforms in the Energy Act, that we are determined to provide this.
Indeed, we already have the certainty of funding through the Levy Control Framework.
Guaranteeing unprecedented financial support for renewables through to 2020.
No other country in Europe can boast this level of certainty. Not France, not Denmark, not even Germany.
Second, targeted policy interventions.
We are focusing our efforts on those areas which need support to grow. And leaving the market to drive innovation where Government is not needed.
That’s why we are safeguarding funding for the wave and tidal sectors, through strike prices. Technologies with huge long-term potential but which still need strong long-term support.
That’s why we have published the first-ever Community Energy Strategy, to meet our vision of community energy which powers a million homes by 2020, with £1.5bn of investment.
And that’s why we are looking at opportunities to export British expertise in the renewables sector around the world.
I’ve already led two trade missions to Africa and Saudi Arabia, and UK Trade & Investment has plans for many more.
Finally, and crucially, Government needs to avoid the trap of regulating the sector into submission.
While Labour’s ‘freeze the bill’ may sound like an attractive pledge, the price freeze proposal put forward by Labour would be reckless in the extreme:
Reckless because it would jeopardise investment…
Reckless because it would torch competition by putting up the barriers to entry, entrenching the dominance of the Big Six that Labour created…
And reckless because it would drive up the cost of energy bills for hardworking consumers…
No, the answer to genuinely lower bills is competition, investment and choice. Not shifting the goal posts so far that no one in their right mind would want to enter the market.
It’s not more 1970s style regulation or the creation of a super-bureaucratic regulator that we need to drive the renewables industry forward.
Instead, we must slash unnecessary red tape, supercharge innovation and drive down the barriers to entry. I want this industry to be as sexy as the innovators of Silicon Valley.
And crucially, Government must be a genuine partner with the private sector – not its enemy.
We should embrace the future with confidence, not retreat into the 1970s.
So finally, in conclusion. Let me thank you again for your work.
The renewables industry is forging a genuinely groundbreaking future in the UK. And some of you are doing some quite amazing things that really deserve recognition.
So good luck tonight with the awards.
Although I’m cleared to receive Top Secret Government information, Nina will not tell me who has won.
I would like to end by congratulating everyone who has been nominated.
Winning is, of course, the ultimate accolade.
But being shortlisted is a huge achievement and one that you should, quite rightly, be very proud of.
I’m sorry I can’t stay for the gold envelope opening – but I very much look forward to finding out who has won.
All the best, and have a great evening.