My Thoughts on the UK's Energy Policy

I have always been an advocate for lowering our carbon emissions including through the use of nuclear and renewable energy and reducing our reliance on coal and oil. However, a recent report carried out by National Grid and Ofgem found that, come 2015-2016, the UK will have a safety margin of a mere 2% in regards to its energy generation as compared to consumption. Although this figure remains positive, an increase in energy consumption during peak times could potentially lead to blackouts across the country. So the question is, how do we avoid the blackouts, both in the run up to 2015 and in the decades to come.

Nuclear and Renewables - Long Term

          As I said, I am strongly in favour of nuclear and renewable energy. However, new nuclear energy plants will take decades to build and come online and therefore, will not be available come 2015. In regards to renewables, although they should play an increasing part of our energy mix, they will not, on their own, meet the UK's energy needs. This will remain the case even if sources of renewable energy can be utilised come 2015. Therefore, even though I believe nuclear and renewable energy should form the backbone of the UK's energy policy, they will not meet the UK's short term energy needs. In regards to who should pay for these new sources of energy, I personally am against strike prices being agreed between private companies and government before investment has even begun. This is due to the belief that the strike price being agreed is often above the general market rate and is generally uncompetitive. However, I also agree that if investment in nuclear and renewables is to be made, private companies often require government support (although thus may be questioned). I believe such support should be in the form of a subsidy during both, the building and decommissioning stages of these stations. Providing support during these stages coupled with strong enforcement of relevant regulation with also helps ensure building and decommissioning is done safely with the risk to the public and the local environment being kept to a minimum.

          So what do we do in the time between now and when these new sources of energy come online? No one idea or scheme can overcome this problem in the short term, instead, it will have to consist of various schemes working together until new power generation comes online, nuclear or otherwise. These schemes will come under one of two categories, either reducing energy consumption or increasing energy production.

Energy Efficiency - Medium Term

          One way to reduce energy consumption is to improve energy efficiency. This may include, but not exclusively, improving technology so electronic appliances produce less waste or and require less energy to operate. This, to an extent, is already being done and, to be honest, is more of a medium term option more than a short term one. However, if we are to be serious about reducing our energy consumption and thus, reducing the risk of blackouts, all options have to be considered. This option could be coupled with legislation stating that only appliances above a certain level of energy efficiency par the EU's energy consumption labelling scheme, can be sold by retailers. As stated, this won't make a significant difference in the short term, but something that should be considered none the less.

          Furthermore, insulating homes and other buildings, although may be costly in the short term, will make the UK far more energy efficient in the years to come. This option specifically relates to the UK's use of gas during the winter months to provide heat or the use of electricity during the summer months for the use of air conditioning. Not only will this help reduce the UK's carbon emissions, but also provide a boost, be it a small one, to the economy, helping to support jobs and help save money for ordinary people over the long term.

Preventing the Blackouts - Current Livestock and Generators - Short Term

          An option more likely to make a significant difference in the short term is extending the lives of the UK's current livestock of power stations, be they gas, coal or otherwise. This may result in the UK missing the EU's carbon emissions targets, but when the alternative is private companies using their own oil based generators, this may be the lesser of two evils. In addition, due to the relatively high price of oil, lengthening the lives of current power stations may also have economic benefits when compared to using oil based generators. Even if the likes of National Grid were to pay companies for using such generators, surely economically, and when considering carbon emissions, that money would be better spent investing in new power stations and keeping current stations open for longer.

Shale Gas - Medium to Long Term

          We can't talk about the UK's energy policy with mentioning fracking and the use of shale gas. Although there are concerns with the use of fracking and the possibility of causing of seismic activity such a tremors. This in addition to other environmental concerns such as the heavy transport of water and the risk of carcinogenic chemicals contaminating local water supplies. However, if managed responsibly, fracking can play a significant part in helping to secure and meet the UK's energy needs. In addition, if enough gases can be extracted in this method, it may result in stabilising gas prices in the UK and help minimise future price increase. Again, this will help to put real money into ordinary people pockets.

          This being said, local communities still remain resistant to having fracking take place near their homes and communities. These communities should be compensated and this may consist, at least in part, in upfront cash payments. However, in my opinion, compensation for the most part should consist of lower gas prices for the local community for the duration that fracking takes place in their communities. These lower gas prices should reflect the level of gas that is extracted and should be paid out of the revenues made by the private companies mining this gas.

European Union Energy Market - Long Term

          In order to improve energy stability and security not only in the UK, but across Europe, energy policy needs to be decided upon and implemented on an EU level far more than it is today. Not only should this include in the areas of climate change and renewable energy target, but working towards a single power grid across Europe. This will make it easier for countries with surpluses in energy production to export such energy to those who require it. This being said, it should be up to national governments how they produce such energy as long as they work towards meeting their climate change targets. This specially relates to the use of nuclear energy with some member states having decided to expand their use of nuclear energy while others are phasing it out. However, greater cooperation and integration of the energy industry, especially in the areas of research and development and a single power grid, would surely improve Europe's energy security for the long term.

Conclusion

          To conclude, in the short term, to avoid blackouts come 2015, we need to extend the lives of our current power stations, even if it means breaking our obligations in regards to carbon emissions. However, the number of stations we continue operating should be kept to a minimum and the type of station selected should be such as to keep carbon emissions down.

          In the medium term, we need to improve the energy efficiency of homes and other facilities that use up energy as to help reduce the UK's energy consumption. In addition, we should invest in utilising our shale gas resources offering local communities direct and relative levels of compensation directly related to the quantity of and duration of these local gas mining operations.

          In the long term, significant investment needs to be made in the areas of nuclear and renewable energy. This investment will not only help secure the UK's energy needs in the long term, but it will provide a boost to the economy, help secure jobs and help the UK meet its carbon emission targets. This investment should be aided with government subsidies and guarantees where appropriate, but agreeing fixed strike prices should be avoided. This is due to such strike prices potentially harming competition in the market at the expense of consumers. Simply, the UK should generate as much of its energy from renewables as is feasibly possible with the difference being met with nuclear in the medium to long term and a mixture of gas and nuclear in the more short and medium term.

Thank for reading,

Jason Cates