Wednesday, 4 December 2013


Energy is back in the spotlight; it's right at the centre of political debate in the UK. Firstly, the Labour party announced that if it was elected in 2015, it would apply a price freeze to energy companies until a more effective regulatory and price- fixing system could be established. Unsurprisingly, energy companies pointed out that such a move would leave them vulnerable to raw material hikes with no prospect of recovering their margins; such risk would blight potential investment.

Now, following concern expressed about recent energy bill increases, former Prime Minister John Major has ‘bounced’ the Government to announce energy price reductions. Interestingly this has included cutting the so-called ‘green tariffs’ built into energy bills. This is an indication that green concerns are slipping down the order and is perhaps a clearer reflection of the political mood, namely one of scepticism over climate change and carbon taxes in a time of economic downturn. Obviously, it is neither comfortable nor desirable to find pensioners having to choose between heating and eating over the winter season; nonetheless, there is apparently a latent reluctance to invest in green energy or a low-carbon economy until it seems absolutely necessary. Nuclear power is back on the agenda as a way forward, even if some new power stations seem to be financed by China and France.

Part of the political reluctance must come from conflicting engineering ‘stories’. Most prominent is that early technologies such as on-shore wind farms are inefficient, even counter-productive, as they contain high amounts of embedded carbon. It is often the case that early –adopters are disadvantaged as technology advances, but that is the way.

There have been a lot of press stories recently; the Financial Times ran a full pull-out section with contributions arguing both ways. But public opinion still seems interested in sustainable options. As always, the devil is in the detail; some quick-fix solutions are dubious in the longer view. But the fundamental course we are on does need to be fairly settled. At the moment we are hesitating, with neither the alternative energy sector nor more traditional energy companies having a clear plan on what to do. This does cause difficulties for investment and planning. We have seen how the Australian government who was ‘brave’ and ‘out there’ in carbon reduction terms has now backtracked. The US is feeling energy secure, buoyed by new reserves and using fracking, OPEC has tightened its grip on prices and production and Russia is similarly increasing output and exploring (openly controversially) the deep arctic.

It seems apparent that energy needs and security are driving ever greater carbon production. What no government can afford is for the ‘lights to go out’. To see a shift in this route will require some real determination, international resolve and perhaps some new science.

David Jackman

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