The Changing of the Guard


September 6, 2012

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The changing of the guard often ushers in a new era. For those on the outside, the first few weeks of these new appointments can prove to be a tense, speculation-fuelled, time.

So this week’s Cabinet reshuffle in the UK Government, and the replacement of Energy Minister Charles Henry, and Environment Secretary Caroline Spelman by unknown faces caused some intense conjecture as to the future of the wind energy industry.

The reason for much of the hand-wringing? Charles Hendry’s replacement, John Hayes, has been in the past quoted as saying unfavourable things about the wind industry.

And Owen Paterson, Caroline Spelman’s successor, has commented previously on his preference for shale gas exploitation and the suspension of green energy subsidies.

This has meant that most commentators have decided both are firmly anti-wind.

But before we decide that both appointments are looking to systematically destroy the industry, its important to bear a few things in mind.

Ed Davey, as Secretary of State, still sits at the top of the tree. And whilst he can’t act unilaterally without the support of his junior ministers, he still backs the over-arching pro-renewable stance of his Liberal Democrat party.

We don’t as yet know how John Hayes will adapt to his role. And whilst he might not be the strongest proponent of wind energy, he will have to work within a policy framework that has already committed to the technology.

And of course there is the bigger picture. Such a move may eclipsed by the wider global wind energy landscape.

The UK is currently the global leader in the offshore wind industry, but how long this will continue is very much open to debate, as the German market starts to catch up, and Asian businesses start to gear up for an offshore wind boom.

And in the US, in an election year, a decision will be made that will have far greater consequences for the global wind industry.

Mitt Romney will in all likelihood suspend the PTC for wind energy, if elected. This will overnight cause mass redundancies at the global turbine makers and a capital flight from the industry worldwide. Asia will eventually pick up the slack in domestic developments, but not for quite a while yet.

Viewed in this light, knee-jerk reactions to as yet unknown outcomes at a domestic UK level seem rather extreme. As the market matures the dynamics are simply more complex than the parlous state of individual country politics, and the institutional frameworks should be robust enough to cope.

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