(Update: Also see Dan Yurman's post on the same subject.)
In Britain's first coalition government in half a century, the Conservatives and Liberal Democrats have formed an ideologically incongruous new team:[New York Times] Cameron Sets to Work After Taking Power in Britain
The question is, with such mismatched platforms, in which direction energy policy go? Here's a quick draft of the obvious differences.major initative for building ten new power plants in the immediate future -- albeit with a clear statement of "no subsidies" [ibid.] (although financing interventions like this one seem to undermine the principle). Labour was in power at the start of the European Commission-wide carbon cap-and-trade in 2005, although it seems there was significant strife  on that act. Separately, they initiated the (catastrophically stupid) subsidy scheme for renewable powers -- imititating the debacles of Germany and Spain -- with feed in tariffs that at pay at least double the market price for wind power, and up to ten-times market for solar panels. This in addition to the renewable electricity standard Labour's official policy statement is here. strengthening the carbon price, moving in the direction of a carbon tax by instituting a price floor (their proposal is here). Says the FT analysis (which I think is correct), European Trading Scheme (ETS) price volatility -- approaching a factor of 5x in the extremes -- is a key failure of the EC carbon market, introducing major risk and deterring low-carbon investment. (This is a major pro-carbon-tax theme, for those following the economics debates.) Like Labour, they are pro-nuclear; and like Labour they have a clear policy against subsidies for new reactors (relying instead on a fair carbon price). And also like Labour they (!!) support subsidies to renewable power plants (though not nuclear). Hmm. They also support other financial interventions, e.g. a "Green Investment Bank" whose implications I don't really understand, and direct subsidies for residential energy efficiency. The Tories' official policy statement is here. policy statement: they are crazen anti-nuke Greens and are steeped in the mythology of renewables. (And take a look at their utterly riduculous concept of "community energy generation", "giving people control over the energy they use". Nuclear is wrong because it is "centralized". WTF?) Notably (says wikipedia), the Lib Dems are somewhat factionalized with both social liberal (what you see in the policy statement) and market liberal divisions. And Nick Clegg, party leader and new Deputy PM is apparently in the free-market faction. This distinction is of course orthogonal with the issues of nuclear power and wind power (which are technical not ideological), but perhaps the factions have different viewpoints here too? (I don't know.)
So it seems the real coalition question -- the division between Tories and Lib Dems which I believe many readers are interested in -- is the nuclear question. Which way will it go?
Since I began writing this entry yesterday, events have rapidly developed. The Department of Energy and Climate Change (DECC) appointment -- obviously a bellwhether -- is Chris Huhne, a key Liberal Democrat with the corresponding anti views. Concession? Compromise says Reuters; the Lib Dems have dropped opposition to nuclear expansion, in particular to the planning rules reform (the one that overrides local-government hurdles). But as the Telegraph's Rowena Mason analyses, it's unclear: a politically potent anti-nuke in a position of regulatory power over British nukes... suggests they could strangle the industry's expansion with regulatory hurdles and delays, while officially maintaining an neutral position (anyone following US nukes would agree this is scenario is highly credible.) WSJ quotes a Citigroup analyst as saying the appointment could undermine financial confidence in the new reactors (regulatory risk), making it harder to obtain funding. Officially, Huhne's position as clarified today is that Lib Dems will allow new nukes if they are built without subsidies. Hmm. Note this isn't a Conservative compromise, as the Conservatives have the same position -- as reiteraed in the join Conservative-Lib Dem statement (and it is preexisting). A more exotic agreement is that the Lib Dems will abstain from voting on the nuclear planning measure.
I'll quote the joint Cameron-Clegg statement in its entirety, as a focus point for comments:
“Liberal Democrats have long opposed any new nuclear construction. Conservatives, by contrast, are committed to allowing the replacement of existing nuclear power stations provided they are subject to the normal planning process for major projects (under a new national planning statement) and provided also that they receive no public subsidy. We have agreed a process that will allow Liberal Democrats to maintain their opposition to nuclear power while permitting the government to bring forward the national planning statement for ratification by Parliament so that new nuclear construction becomes possible.
This process will involve:
- the government completing the drafting of a national planning statement and putting it before Parliament;
- specific agreement that a Liberal Democrat spokesman will speak against the planning statement, but that Liberal Democrat MPs will abstain; and clarity that this will not be regarded as an issue of confidence.”
Also, here's a brief "10 questions" interview with Huhne.