The alarm raised by the Chief Executive of Ofgem earlier this week over a looming energy ‘near crisis’ will not have come as a shock to most people. This is not the first time we have heard how our islands will struggle to support increasing energy demands in a carbon constrained world.
However, the major insight that Ofgem has provided relates to timing. Ofgem’s analysis points very clearly to 2015 as being the critical year when our reliance on imported gas could lead to a major spike in bills.
Lest we forget, 2015 is also the year of the next general election. Therefore how political parties react to the issue of providing new energy capacity and protecting consumers from rising energy bills could be a critical election issue. We all know the election will be about the economy, but to ignore the impact of energy policy on the economy, really would be stupid.
The good news is that the Lib Dems are delivering on energy policy. Supporting the green economy was one of our four key election pledges. In coalition we have gone a great deal further than that.
Ed Davey has delivered the Energy Bill which, once passed, will surely rank as one of the Lib Dems’ most significant legislative achievements of this parliament. Early indications are that the Green Deal will grow into a popular and powerful policy. We have continued progress on emission reductions and have honoured our international commitments to finance clean development abroad.
We can do more. As fuel poverty increases we should protect vulnerable consumers through ring-fencing receipts from carbon taxes. Ofgem needs more teeth to tackle profiteering and energy companies must be made to answer for gas price-fixing and failure to make switching more straightforward. We also need stronger support for community energy schemes and a better slate of incentives for communities being asked to shoulder the burden of our new energy infrastructure. Nuclear will need to be part of the solution and it will not be delivered without subsidy.
We have control of what might be a crucial battlefield for 2015. To hold that ground we need to shout louder about our achievements, and dedicate ourselves to a rational and visionary set of policies that will show the electorate that we are the best choice to manage this complicated brief to 2020. The relationship between the needs of the nation, the rights of a local community and the finances of individuals and families must be carefully balanced. As Ofgem’s ‘near crisis’ bites, we should be the party, both locally and nationally, pointing the way to the bright energy future that is on the other side.
* Alex Meredith is a former PPC for Wantage and writes a blog on energy and climate policy at www.brightgreendragon.com
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25 Comments
George Osborne has so far succeeded in watering down every environmental consideration in British energy policy, a short-termist approach, which will come at considerable long-term cost to our country’s economy.
I understand that Tim Yeo (Con) and Barry Gardiner (Lab) are sponsoring a cross-house Bill to require the UK’s energy sector to decarbonise by 2030. I understand Charles Hendry, former Energy Minister, is also in support. Is any Lib Dem MP going to put their name to it? I would hope that the Lib Dems would vote en masse for the Bill at each reading.
@Alex “Rational energy policy must be central to 2015 manifesto”
Lib Dems are in government so why wait two years to campaign on this when it could be acted upon now?
If it helps, I will spend a day leafleting at the 2015 GE for the first Lib Dem MP from London or the South East to put their name to the Yeo/Gardiner Bill. Can’t say fairer than that.
@Peter I agree. We need to campaign hard to highlight our successes at DECC right now . It’s not unique to energy, but there is a danger of the Tories trying to take credit for LD policy delivery . Greg Barker has adopted Green Deal and John Hayes gave the response to the Ofgem comments this week. Also Cameron himself is weighing in on consumer protection today. Not an LD in sight, yet we have the Sec of State. We need more front bench activity on energy to avoid losing credit for having run this department , and activists should be told more about our successes at this department.
Above that, my point is that we also need to get to work on policy ideas for the manifesto to make sure we can build on this success. Bills (and fuel poverty) will be rising faster than ever in 2015 – what are we proposing to do about it? There are some consumer protections in the Energy Bill, but could we go further with some designated revenue from carbon levies to help the vulnerable? Is the Social Tariff still a workable policy? These need to be modelled carefully to make sure they work, but could be popular on the doorstep. While resources may be stretched it should not get lost in other policy discussions as we have a good record to protect here.
@Paul. I think you are right in principle about the Decarbonisation Target . However a deal has been done that will deliver more cash to invest in renewables . I agree we would prefer to have both the target and the increased cash but the idea of a target set in 2016 is a step forward from no target at all. It would be good to see LD MPs as part of this move to put the target back in (perhaps Sarah Teather could step forward?), but I think it is reasonable for the party to officially try and stick to the deal it has done.
Interesting to see that China is introducing a carbon tax. On the low side, but at least comparable with the EU carbon thing.
I’ve seen several articles that mention “new clean coal” . The adjectives are redundant. It’s coal.
Renewables like wind are good, but they are never going to be enough to power the UK if you include heating and transport, rather than just current electricity demand. We need nuclear, and it’s pointless fiddling around with the market waiting for some private company to see it can fleece the taxpayer by building nuclear power stations, Just contract directly to have them built. You could call it – I don’t know – How about British Nuclear Energy?
Longer term concentrated solar power in the far south of Europe and North Africa together with long haul HVDC grids is probably the way to go.
Meanwhile – I’ll just throw another log on my wood burner.
@jenny. Both the EU and China (and California, Australia amongst others) are operating or implementing emissions trading schemes. They’re a bit more flexible than straight taxes, but the EU has run into trouble with ours due to over-allocations and economic contraction. A reform proposal is on the table, but this could be an area for LD policy input to propose a solution that makes sense to consumers who struggle with the cost/benefit of the trading scheme. On nuclear I agree it’s essential and subsidy will be needed – question is how much and for how long? The government is apparently negotiating that with EDF at the moment. I know who my money is on to come out smiling from that one….
“As fuel poverty increases we should protect vulnerable consumers through ring-fencing receipts from carbon taxes.”
What you really mean is we should cut some existing spending by billions of pounds, or raise this in new taxes, to spend it in this particular way.
“Nuclear will need to be part of the solution and it will not be delivered without subsidy”
What’s the appeal of nuclear if it’s not cheap?
So two policies that throw money at the problem in ineffective ways. I think we can be more radical and visionary than that.
People in the power industry have known for at least 25 years that 2015 was going to be the crunch year. See my letter in the Independent tomorrow. Politicans seem to think that stating that we should have more gas fired or nuclear plant is enough to make them appear by magic. The only power plant which can fill the gap in the time we have left is gas, which is why Ofgem is panicing. Gas plant can be put in within two years, except that gas turbine manufacturers will have full order books and it may take even longer. How long will it take to build a nuclear power station? Eight years at least, and none has got planning permission yet.
Just to add insult to injury, the Green Deal is a complex shambles. At least Chris Huhne and Ed Davey managed to sort out the Feed in Tariff scheme so it is working well, but it looks as if Ed Davey is going to let his civil servants confuse it with Green Deal. What should the LibDems do? There have been numerous energy papers produced over the years. Any one of them could adequately form the basis of an energy policy, because as I said at the start nothing has changed in 25 years.
So thats why Ed Davey, has guaranteed that if these power stations are built they will be exempted from emissions regulations and can continue emitting CO2 unabated until at least 2045.
Whats happend with the LibDem’s stance on all things green? It was inevitable that if you built gas powered stations, there’s the excuse for the energy companies to say, “theres a high demand for gas” and charge what they like. And NOTHING and NO-ONE is going to stop them, why? Because successive governments have squandered their time in power and now the LibDems have done exactly the same thing with the tories. No action, just words.
Politicians and policy makers seem to forget that the majority of the country want to see things black and white. They aren’t interested in how things work as long as they work. Words are cheap in any form and its action thats needed and LibDems, once again have failed miserably.
@Adam the appeal of nuclear is that it is predictable, reliable and does not produce CO2. I agree that visionary policies are required, so what do you propose?
@David I don’t agree that the Green Deal is a shambles, though it has taken too long to bring to market. Also I think that ‘nothing has changed’ is a little simplistic. I am not sure there were that many predictions that 10% of UK power would come from renewables in 1988. Also the UK as leader in offshore wind? Renewable heat? Hasn’t the energy market and the balancing system been completely rewritten since then as well?
You are right that the expensive consequences of the dash for gas have been clear all along, but there has been progress in some areas?
>but there has been progress in some areas?
But mainly in those areas that will ultimately make very little difference to whether the lights stay on or not.
We might make more progress on the energy front (both decarbonising and eliminating nuclear from our rather foolish calculations) by recognising that we need to spend a lot in the relatively short term to move to a new living paradigm (more insulation, more local community energy etc). Our current efforts are considerably hampered by the perceived need to CUT spending to “pay down the deficit”. This is and has been, the killer policy – if we want to avoid the more horrendous future poutcomes, we must get over it, and realise that investment has to take place quickly. Apart from any other downsides of nuclear (how do we protect nuclear stations from sea level rise, from extreme weather conditions and “terrorism” to name just three), it simply won’t have an effect quickly enough. We have delayed quick investment for far too long. It is the eleventh hour now, we can’t wait any longer, or mess around because people won’t pay taxes, we can’t come up with international agreements because of “the markets”, of “pursuing national interests” etc. JDI.
If you think the state of our energy supply is bad now, just think what it would of been like if we hadn’t largely off-shored our manufacturing and heavy industries years age…
@AndyS – One of the reasons why I am calling for a rational policy is because we need to ensure that our environmental objectives are aligned with (a) achieving the cheapest possible price for consumers and (b) the legitimate demand to keep the lights on. These are the key issues for voters. I agree with tighter targets in principle. But we have achieved greater support for renewables in exchange for postponing the target setting. This will allow us greater flexibility to build gas to ensure the lights stay on as we go through the crisis period. One thing is for sure if the lights do go out while we control DECC we will never have any credibility on energy.
@Tim13 – I agree to an extent, but the Green Deal does open the possibility of achieving widespread efficiency measures without a huge public spend. More can be done to reduce demand – it’s a fertile area to look at more radical policies, in particular connecting communities more directly with their power sources so people can monitor their use more effectively.
@Roland – good point, also perhaps with stronger voices from manufacturers and industry, Labour would have been forced to act during its 13 years of dithering over the capacity crisis.
By 2015, or soon after, for the first time in 3 million years the arctic ocean will be free of ice for a period during the Summer and global heating will escalate. Already the Greenland ice cap is melting at an alarming rate. The loss of our ability to feed the world is a much more serious threat than breaks in the power supplies needed to enable us to view the horrors of global heating on 24hr TV.
The heating of our atmosphere is compounded, not caused, by CO2. The thermal efficiency of nuclear is 40%, coal 38% and gas 50%. This means that for every 1 watt of electricity produced by nuclear or coal at least 1.5 watts is pumped into the atmosphere as heat. Neither nuclear nor coal (and CCS can only reduce coal’s overall thermal efficiency) can have any part to play in a ‘rational’ policy. The efficiency of gas can be increased if it is used in combined heat and power systems and should be the only thermal fuel under consideration.
Reducing CO2 is important but irrelevant if we continue to use inefficient thermal generating systems all of which depend upon steam turbines to turn the alternators. We need to bring the steam age to a speedy end.
The only power stations that could be built in time are gas, and probably not even those. Probably the only policy that could work on that timescale is NOT closing the existing stations.
Oh, by the way, a big increase in energy prices would help to tank the economy in the election year.
Ian S. How are you measuring the thermal (Carnot) efficiency of nuclear plant? You can measure the efficiency from the steam, but what does that tell you?
The other aspect of an energy policy that has been largely missed is consideration of what exactly we intend to use it for. I.e how we will manage (and even ration) demand, and hence what ‘cap should we place on our infrastructure – remember through various green commitments and initatives we have effectively already capped our generating capacity at 1998 levels .
I know that some will say leave it to the markets, but we can do a lot to help ourselves, particularly as energy will increasingly become a scarce commodity. I suggest that projects that have significant NEW electricity demands such as HS2, electric cars and house building need to be re-evaluated and be audited to show that no additional generating capacity will be necessary to satisfy their demands.
Obviously if we find a fuel that is plentiful and doesn’t have a green impact and will last us for several hundreds of years then things can be eased.
We need more nuclear etc … Oh yes please. Groan!
But surely not before we properly and seriously invest in renewable alternatives, waste reduction and a strong commitment to local generation measures?
In three years we somehow appear to have been moved from being a broadly green and anti nuclear power party, through ‘OK but only if unsubsidised’ to the historical Tory/Labour position of fully subsidising the nuclear industry.
And will we do with the long-term radioactive waste? Has it escaped the pro-lobbies notice that even the Cumbrians, who benefit in the west of their county from the presence of Sellafield, have just voted against storing the existing stock piles of waste beneath their county.
Just as Britain was blessed with coal at the time of the first industrial revolution, this time we have significant resources from wind, wave and tidal power; not to mention ‘hot rock’ areas such as Cornwall where the geothermal gradient is particularly high.
Pound for pound, how many more nation-wide jobs would be created in developing, installing and maintaining renewable sources energy production? Britain could manufacture much of the material required and also export this technology instead of having to import it as with the nuclear option.
We also ignore the drawbacks and potential dangers of nuclear technology at our peril. To Tim’s points I should also like to add mechanical failure and plain old fashioned human error.
Superficial/conservative/sales-driven newspapers have fanned local NIMBY’s who wish to grumble about wind turbines while happily turning a blind eye to the pylons criss-crossing the landscape.
We will not solve global warming and energy crisis while individual people and local communities don’t have to take some responsibility for energy conservation and local generation. Local communities should be challenged to save and generate energy locally reflecting local generation and environmental options or to have that nuclear, gas or coal-burning power station within a defined radius of their homes. I’m sure that would bring a sense of perspective. And of barrage-opposing bird-lovers, I would ask what our (yes, I live on one) beloved estuaries and tidal mud flats will look like as sea levels rise significantly?
Right now we have the option to make a radical move towards a more liberal, democratic and locally-based sustainable future using the latest and improving technologies or to turn back towards a continuation of the capital-intensive, centralised (not to mention failed) technologies of the past.
Although very much to be welcomed, it is also very disappointing when the Conservative-Labour partnership of Tim Yeo and Barry Gardiner show a level of green vision that appears to be far in excess of what our leadership can muster right now.
@Stephen Hesketh
What on earth is green about “anti-nuclear power”?
There are currently two realistic alternatives here for baseload in the UK: hydrocarbon combustion or nuclear fission. One of them fails on environmental impact: the hydrocarbon route, due to its well researched and documented concomitant climate change. Ergo, nuclear is the green option.
Demand reduction, smart grids, hvdc interconnectors, wind, solar, tidal, wave, geothermal energy are all important technologies, but they aren’t going to supply anywhere near 100% of our energy needs over the next thirty years. And in that period our energy sector will need to reduce its carbon dioxide emissions to zero.
I really don’t get the argument against nuclear.
@Paul McKeown “What on earth is green about “anti-nuclear power”?
Nuclear power may be low carbon but it is light years away from being a green or sustainable technology. To be brief, the major (environmental) issues I see with uranium-based nuclear power are 1) it produces significant quantities of high, medium and low grade waste. 2) We as a country can’t agree on how to deal with what we already have without producing more of it. 3) Due to the very nature of the waste it is a long term problem that we essentially leave to future generations to deal with. 4) When natural or human ‘accidents’ occur, the results can be catastrophic – many nuclear plants are on the west side of the country, we have a prevailing westerly wind …! At the time of the Chernobyl disaster the wind was actually coming from the east and in combination with rain deposited a proportion of its isotopes on the Cumbrian hills and fells causing problems with milk and lamb production. What would the effects be on Northern England in the event of a major incident at Sellafield or on North Wales and England in the event of an issue at Wylfa or other Welsh plants?
5) How much commercially available uranium of suitable isotope grade exists – and where is it located?
I am not totally ‘anti-nuclear’ and would actually support the building of a thorium-based fission reactor as these are not able to ‘melt down’ and apparently offer the benefit of being able to ‘burn’ fissile material from the previous generation of nuclear reactors.
Regarding your “Demand reduction, smart grids, hvdc interconnectors, wind, solar, tidal, wave, geothermal energy are all important technologies, but they aren’t going to supply anywhere near 100% of our energy needs over the next thirty years. And in that period our energy sector will need to reduce its carbon dioxide emissions to zero.” I am in agreement – but would probably say that given the looming but long foreseen crisis (as mentioned by Dave Pollard) that carbon-based technologies combined with sequestration and underground storage may be our best short-term option.
At the end of the day however we need to act very quickly to stop the environmental crisis (I am particularly thinking about the loss of polar ice (causing additional energy to reach the earth due to lost reflectance) and the melting of land ice due to the proportionately greater effect this has on sea levels.
We should not and can not duck the challenge of personal and local responsibility regarding energy use and generation. My issue is that it has all been left too late and now nuclear is served up as being the saviour of the day when in fact (taken as a whole) it has always over promised, over polluted, over costed and under performed as a technology.
I should also add that I was somewhat harsh on our leadership and ministers in my last post – the reactionary George Osborne is very clearly the major problem here – as in so many other areas.
The Green Deal will do little for those in social housing, it has been rejected by several housing suppliers. Inside Housing, an on line web pages that writes for social housing issues and comments , wrote on this subject just recently.
We have to do better than this, homes should be insulated, and the Decent Homes laid down some ground rules on the way forward.
It will make sense to save energy, of course the profits will go down for those in the sector of energy supplies, so is that the reason, it takes so long to reach those who need the help? Our winters have been colder recently, that makes our homes colder without insulation. We in-turn use more energy, or simply remain too cold for our health.
@Helen Duddon. I agree and this is an example of where the regulations should be tightened to ensure that commercial builders, councils, housing associations and private house builders have to meet more rigourous energy conservation and generation standards. As the poor and elderly are likely to spend a greater proportion of their income on energy etc it is vital that they and theirs homes are not excluded from these measures for they sake and in terms of us meeting overall decarbonisation . Bodies such as councils and housing associations could enter into agreements whereby the homess receive the free electricity from solar PV units while the FIT payment is divided betwen the installer and the council etc. In other areas/home orientations solar thermal hot water may be more appropriate. We just need some committment and creative thinking. New jobs would also be produced by measures!
Apologies for some of the English and spelling in my last post; in my case typing and editing while not wearing glasses do not mix!