The Department of Energy and Climate Change

While Peter Mandelson's reappointment is clearly the political story of the reshuffle I think the more interesting change, in policy terms, is the creation of the new Department of Energy and Climate Change (or DE&CC).  The dynamics of that department could play a huge role in how our energy policy develops over the coming years.

I think that the short term consequences are pretty clear.  This will bring administrative chaos and reduce the chances of urgent action to get Britain through the capacity crunch without the lights going out.  There is necessarily a lack of clarity following a change like this.  What priorities will the new boss have?  Who is responsible for what?  Where is my desk?

The Government have spent ten years in the belief that Britain can be securely powered by a combination of gas and renewables.  At this stage action needs to be taken quickly to reform policies that are leading us into dangerous over-reliance on a single fuel that is becoming increasingly difficult to source.  In the medium term (i.e. as soon as possible) we need new nuclear plants but right now we need new coal.  These are genuine tough decisions - the vague rhetoric we've had from the Government so far does not constitute a sufficient response.

It sounded like John Hutton was starting to understand the scale of the problem; that a senior politician was finally getting past the complacency Campbell Dunford has identified.  Now we have to hope that Ed Miliband will see the light as well and the chaos of the reorganisation won't delay something actually getting done for too long.

In the medium term it will be interesting to see which one of the department's two priorities wins out in the numerous situations where green policies - and financing the £100 billion bill - are not conducive to providing an affordable and secure energy supply.  The ex-DEFRA climate change bureaucracy is, I think, probably larger.  In that respect, it will have the advantage.  More bureaucrats means more people with their pet schemes to push, more staff who are really interested in climate change policy and find energy rather boring.

On the other hand, the reason why Ministers love working on climate change is that the outcomes are all decades and centuries in the future so there is no real accountability.  By contrast, people will notice if the lights go out.  While politicians can try and blame the energy companies, or hope they're in a different job by the time poor choices lead to economic disaster, there is a much greater chance that the public will notice when political leaders let them down in energy policy than with climate change.

We'll see how it all plays out.  Hopefully this week's announcement won't be another step on the road to serious power cuts.