Pity energy firms and cleantech investors in Britain: waiting for UK energy policy to be finalised is like waiting for Godot.
The British Government's Energy Bill is currently in the committee stage in the House of Lords.
Together with the prior consultations it has taken years to get to this point and will continue snaking through parliamentary procedure for a few months yet.
The whole country and its dog is impatient for the transformation in the market and doddering infrastructure that has for so long been anticipated.
Yet still arguments rage over the fine detail.
For the last ten years, successive governments have dithered over what to do about Britain's polluting coal-fired power stations, mothballed gas power stations and ancient nuclear reactors, at the same time as meeting climate-protection targets that are legally enshrined in the world's first climate change legislation.
Over £110 billion of investment is needed by 2020 to bring the network up to date and avoid blackouts. The Energy Bill is tasked with stimulating the majority of this investment at a time of low public spending.
It's a ragbag document crammed with disparate measures, the most important of which is reform of the electricity market to favour new entrants, renewable energy and energy efficiency. There's also considerably enhanced consumer protection, protocols for the decommissioning of nuclear sites, and the strengthening of the energy watchdog Ofgem's powers.
But critics of the Bill lament its complexity.
A Good Strike and You're In
For example, interpreting the nature of 'Feed-in-Tariffs with Contracts for Difference' (CfD for short), and how to participate in the Capacity Market auctions, intended to guarantee future energy security, will create work for armies of well-paid consultants for years to come.
Generators will secure a CfD by negotiating, initially with the government, based on an estimate of the long-term price needed to bring forward investment in a given technology, called ‘strike prices’, for different technologies (renewables, nuclear and carbon capture and storage).
Successful generators and developers will be able to sell their electricity into the market in the normal way. The CfD then pays the difference between an estimate of the market price for electricity and the strike price.
Everyone is eagerly waiting to see what the strike prices will be. Naturally, they the subject of fierce lobbying, most publicly by EDF for its planned new generation of nuclear power plants. Recently the Chancellor, George Osborne, tried to break the stalemate on these talks with EDF by promising that nuclear developers could bid for £10 billion of government-guaranteed loans.
Who's Got the Capacity?
Then there is the Capacity Market. This is intended to compensate fossil-fuel power plant owners for the times when their output is not needed because cheaper renewable energy is available, to ensure that it is available at times when the renewable energy is not.
The Capacity Market will embrace new and existing generation capacity, including combined heat and power (CHP), embedded generation, energy storage, and permanent reductions in electricity demand.
The Department for Energy and Climate Change (DECC) reasons that an Administrative Capacity Market is necessary to give investors in new plant confidence in the face of volatile energy prices.
This entails guaranteeing a price for energy in the future, and it could, DECC thinks, cause household bills to increase by around £16/year - whatever the energy source (although this is predicated upon a total emission intensity for the power sector in 2030 of 100gCO2/kWh).
DECC's Capacity Market modelling allows for an emission intensity up to double this. It is an indication that the Government is prepared to let emissions rise way beyond that expected by the Climate Change Act, of 50gCO2/kWh in 2030, in order to be super-confident that the juice will keep flowing to homes and industry.
The Government narrowly defeated a move to include just such a 50g target in the Energy Bill; this target was demanded by investors, the Confederation of British industry and leading energy companies for the exact same reason: to give them confidence to put up their money.
An End to Tyranny
Enough about supply; what about demand management? Here is where we find one of the most revolutionary aspects of the Bill: it marks an end to the tyranny of the principle that has dominated energy policy since the national grid began: of satisfying peak demand at any price.
The Bill contains an Electricity Demand Reduction (EDR) measure, which will be part of the Capacity Market, because DECC's research has shown that up to 22 power stations-worth of energy could be saved by investing in energy efficiency.
Participants in this market will be paid to reduce their demands for power at a time when it is the most expensive.
Although it yet needs to be tested using a pilot scheme, it is already working in the United States, and it means that small, decentralised generators and owners of stand-by generators experiencing reduced demand, will be able to gain an income by selling the energy they don't need.
The Dark Side
That's on the bright side. But there is a dark side: coal.
Coal-fired power stations are intended to be phased out after 2016 due to the introduction of an Emissions Performance Standard (EPS) of 450gCO2/kWh. Emissions from power stations are also covered by another two European directives: for large combustion plants and industrial emissions.
But coal is cheap. That's why the latest figures for 2012 show that over a third (39%) of Britain's electricity came from burning it, an increase of 10% over the previous year's proportion.
This was largely responsible for a rise of 4% in the country's greenhouse gas emissions in 2012, making it Europe's worst performing nation, according to Eurostat data.
Cheap coal is displacing less polluting forms of power and could knock out all the intended benefits of the Energy Bill.
As a result of cheap coal, the UK has missed its indicative renewable energy target for 2011-12 and now has to submit an amended national renewable energy action plan to the European Commission by the end of next June.
In an attempt to counter the resurgence of coal as a source of power and climate-warming gases, the European Investment Bank (EIB), the EU's main lending arm, has announced that it will no longer finance most coal-fired power stations unless they emit fewer than 550 grams of carbon dioxide per kilowatt-hour (gCO2/kWh), a figure which could lower to 450g within a year and thereby affect older gas-fired power stations as well.
The World Bank also plans to limit the financing of coal-fired plants in the future.
UK energy policy has a further weapon to counteract the gains made by coal: the new carbon price floor is intended to make burning it as expensive as the difference between the price of carbon in the EU Emissions Trading Scheme, and a price currently set at £16 per tonne set by the UK Treasury.
But as a deterrent this weapon is as effective as using aspirin to cure tuberculosis.
Coal is so cheap that the power stations will most probably just pay the tax and carry on burning - although they will have to fit technology that reduces air pollution.
Moreover, as Greenpeace has pointed out following conversations with BP, Shell, Centrica and RWE npower, there is nothing to prevent these power stations from participating in the Capacity Market auctions and bidding alongside everyone else for long-term supply contracts.
The International Energy Agency (IEA) has said it would take a price for carbon as high as €50 (around $67) a tonne to make them switch from coal to gas in the short run.
Given that there is no way that this will happen any time soon, Greenpeace is calling for the Emissions Performance Standard (EPS) to be modified in the Energy Bill to prevent any coal plant in Britain from operating as baseload.
It makes it all the more ionic that a proposal by RWE npower for a 'clean' (i.e. 22% less polluting) coal power plant on the site of an old one in Northumberland was branded "unwelcome" last week by a local council leader, when it's just what the country needs.
Anyone Seen Godot?
Even when the Energy Bill becomes law later this year, there will need to be further supplementary legislation, meaning more lengthy consultation before the details of its implementation are worked out.
Investors in cleantech, and those hoping for a reduction in the UK's carbon emissions, are not going to get any more joy from this Bill until at least spring 2014.
Anyone who has read or seen Samuel Beckett's Waiting for Godot will know the ending: Godot never comes. Meanwhile, life carries on.
Will the Bill summon Godot? Don't hold your breath.
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