Our centralised power system is massively wasteful, so lets stop arguing about nuclear or non-nuclear and start to open our market to the full range of competitive alternatives says TMP environmental columnist, Hugh Goulbourne.
It has been disappointing to read recent articles by ‘green energy campaigners’ criticising the Government and civil service for their over-commitment to nuclear power. As a keen advocate of all forms of low-CO2 energy and energy efficiency, I am of course sympathetic to the argument that the UK needs to do more to support sustainable forms of energy. However, the debate must move beyond endless criticism of the Government’s review of nuclear and instead focus on how the industry and Government can together deliver the 20% of renewables, 20% reduction of CO2 emissions and eradication of fuel poverty within the next decade.
Contrary to much speculation, the government has now firmly committed itself to going most of the way towards meeting the UK’s 2020 EU target for a 20% reduction in CO2 emissions and an increase to 20% of energy (heat, power and transport) from renewables. A new generation of nuclear power plants will not be able to contribute to any of these targets. The planned redevelopment will only replace existing capacity and, therefore, cannot supplement either the CO2 or the renewables target (even if as has been suggested it were to be re-categorised as a renewable source). Furthermore, they will not come online before 2025, this according to figures supplied by the DBERR in the 2006 Energy Review.
All of us in the ‘green energy movement, should therefore recognise this as a moment in which government is keen to engage and find solutions to its pressing targets. Key to this is identifying the reforms of the regulatory and fiscal structures that provide the DNA to our energy market and generating systems.
Margaret Thatcher’s privatisation of the energy market ensured that the UK fully exploited its North Sea oil and gas reserves and so ended a decade of energy crises. The market continues under the watchful guidance of the regulator Ofgem to provide a system, which supplies electricity and gas at the lowest possible short-term price to the majority of UK consumers. However, climate change and dwindling North Sea supplies have revealed major flaws in the market. A reliance on centralised coal, oil and gas power stations means that the current system is structured around a reliable but wasteful system where up to a third of electricity is lost in transmission and 90% of heat is released into the atmosphere.
In a modern and competitive global economy, such inefficiency is not only environmentally unsustainable, but it cannot guarantee the long-term supply of affordable energy for us all. Energy prices (gas and electricity) have nearly doubled since 2003 and despite the commendable efforts by the Government to deliver energy saving programmes to vulnerable households through such programmes as Decent Homes, Warm Front and the Energy Efficiency Commitment, we now have more than 4million households who, each year, suffer in cold and poorly lit homes.
We can start to redress these market failures by placing a clear obligation on Ofgem to create a truly competitive and decentralised energy framework that will stimulate investment, create new jobs, reduce our environmental impact and guarantee access to energy for all. Equipped with this mandate, Ofgem would be charged with seeking out and promoting investment in technologies that provide for long term and sustainable energy supply. Key indicators of success would be the replacement of aging generating and transmission systems with technologies that demand less or no input fuel. This would guarantee a cut in both CO2 emissions and energy costs.
Ofgem could achieve this by removing the licensing and other barriers to renewables, district heating and on-site electricity. It would encourage this growth by facilitating equal access to the energy supply market for a range of small-scale enterprises including 3rd sector, community owned enterprises and even individual households. It could also promote a market for heat by guaranteeing regulatory protection heat distribution networks from large power stations to appropriate households, businesses and public places.
Implicit in the Government’s new direction would be a shift away from its current primary policy aim, which is to engineer the lowest possible energy prices. However, this should not be viewed as standing in the way of its progressive agenda. Instead it would offer an opportunity to bring together fuel poverty projects such as Warm Front, Decent Homes, the soon to be discontinued Energy Efficiency Commitment and the now discontinued Community Energy Programme into one coherent social energy fund. That fund could be used to invest in a range of appropriate local CO2 technologies, including on-site renewables and community power and heating technologies that would ensure affordable long-term energy for even the most vulnerable communities.
The increased global competition for oil and gas, twinned with growing concerns over climate change mean that we must act urgently to create an environment in which we in the UK, businesses and citizens, are able to benefit from the advantages of investing in the short term for long term security and affordability of energy supply.
As the country responsible for the first industrial revolution and the first country committed to domestic CO2 reduction targets, the UK is ideally placed to be at the forefront of the ‘new low-CO2 industrial revolution’. Without decisive market intervention, however, the Government will lock the UK into another generation of wasted energy. The result will be rising prices and growing numbers of businesses and households unable to heat or power their properties.
Hugh Goulbourne is the founder of www.communityenergy.info, the SERA Energy Co-ordinator and Chair of the CESG (Compass)
