I was at a big trade show last week called NextGen. This is the show for existing and future technologies in the alternative energy arena – everything from hi tec wood burning stoves to waste to energy plants. It attracts companies from all over Europe and was very busy with over 500 exhibitors and a wide range of lectures from the technical to policy. All good stuff and I thought I would find some interesting UK companies to whom we could deploy our bond funds. Well there were a few but compared with the German and Austrian exhibitors they felt small, inexperienced and amateurish.
Why is this I wonder? Is this the consequence of years of neglect of this sector by policy makers or just an accident of history? In Europe this sector has been thriving for the last 20 years. Well as an ex policy wonk my impression was that 20 years ago the alternative energy market was seen as small, hokey and irrelevant. We had oil and gas and what was the point of bothering with alternatives! Now we are scrambling to catch-up. History may now be repeating it self with the Cameron administration – political expediency substituting for long term energy policy . The energy sector has always been seen as” difficult” for governments. Investment decisions have very long lead times so short term costs incurred in one Parliament lead to long term gains that might not show up for two or three Parliaments. So a standard response has been to kick difficult decisions into the long grass and wait for a crises which can then be blamed on previous Governments. Perhaps energy policy is too important for Governments and should be set by an independent body with representatives from all parties – a variation on the Office for Budget responsibility.
By Richard Turner
