British Economy Series: The Need to Invest in the Energy Grid

As the world races to decarbonize and meet climate targets, there's one truth we can no longer ignore: energy is the backbone of modern society, and the way we produce, distribute, and consume it must change. Investing in renewable energy isn’t just about installing more solar panels or wind turbines. It’s about rethinking the entire energy system from the ground up.

We Need as Much Renewable Energy Generation as is Feasible

Solar and wind power have become some of the cheapest sources of electricity in history. But we still get the majority of our energy from fossil fuels. We need to accelerate the rollout of renewables, especially in regions with abundant natural resources, to ensure as much of our energy as possible comes from clean sources. Every additional gigawatt of renewable capacity helps reduce emissions and dependence on volatile fuel markets.

We also need to be smarter where we build as land, like any resource, is limited. This includes, just as a couple examples, building solar panels onto buildings and combining solar farms with lands for grazing. But renewables alone aren't enough.

Build a Resilient Base Load (Including Nuclear and Small Modular Reactors)

Because wind and solar are intermittent, we need reliable sources of energy that can run 24/7, our base load. Nuclear energy, particularly emerging technologies like small modular reactors (SMRs), can provide that consistent, low-carbon power. While renewables are the engine of our clean energy future, base load sources are the backbone that keep the lights on when the sun isn’t shining and the wind isn’t blowing. However nuclear energy does carry risks including high upfront costs (reducing the number of potential investors who can put up this upfront investment) and a history of budget and time over runs.

Invest in Energy Storage to Avoid Wasting Renewable Power

Without sufficient storage, excess renewable energy often goes to waste. That's money down the drain and carbon savings lost. Investing in lithium-ion batteries and pumped hydro systems helps store energy when it’s plentiful and dispatch it when demand rises. This smooths out supply fluctuations and ensures the energy we produce is used efficiently.

Expand Interconnectors (Locally and Internationally)

Energy doesn’t need to be confined to the region where it’s generated. Building interconnectors across regions and borders allows clean energy to flow from places of surplus to places of need. This helps balance grids, reduce reliance on fossil peaker plants, and increase overall system resilience, especially during extreme weather events.

Use Regional Pricing to Incentivize Local Generation

One-size-fits-all pricing doesn’t reflect the true cost of delivering power. By introducing regional pricing, we can encourage communities to build energy generation closer to where it’s consumed. This reduces transmission losses, lowers infrastructure costs, and empowers local economies to be part of the clean energy solution.

Manage Demand as Well as Supply

Managing demand is just as important as generating supply. By incentivizing energy use during times of low demand and high renewable availability, through smart tariffs and time-of-use pricing, we can flatten peak loads and reduce strain on the grid. Demand flexibility can be a powerful tool for grid stability and cost reduction.

This will be especially important as we replace diesel/petrol vehicles with electric and gas heating with heats pumps which will inevitably increase demand.

Improve Energy Efficiency

The cleanest energy is the energy we don’t use. Making our buildings more energy efficient through better insulation, smart appliances, and modern heating and cooling systems can drastically cut energy consumption. Retrofitting homes and commercial buildings should be a cornerstone of any energy transition strategy.

Conclusion

The clean energy transition isn’t a single investment or policy — it’s a systems overhaul. We need renewables, yes. But we also need to invest in base load capacity, storage, transmission, regional planning, demand flexibility, and efficiency. Each piece reinforces the others.

We need bold, coordinated action. The longer we wait, the harder and more expensive the transition becomes. The future of our climate, economy, and energy security depends on the decisions we are making.