Plugging the energy gap - George Osborne’s trilema

Posted by Graham Thompson — 31 March 2016 at 6:00pm - Comments
All rights reserved. Credit: Getty

For a long time, many environmentalists were concerned that government efforts to clean up the world’s energy supply were a bit one-sided, in that we were getting on quite well with half the problem – generating clean energy. Meanwhile the other more important half – not generating dirty energy – was being largely ignored.

But here in the UK things have suddenly inverted in a dramatic fashion. Because by the end of this year, we will have 10 fewer gigawatts of coal power than we had at the start of 2015.

This is good news for those of us hoping to live for several more decades, those of us with children, and anyone who has been breathing the toxic fumes released by these plants.

A sensible energy policy would balance these closures with clean power generation or energy savings. But just as the threat of climate change and air pollution have done for coal, so George Osborne’s incompetent meddling has done for the necessary replacements.

The government has made much of going ‘all out for shale’, an industry which has provided the country with exactly 0% of our energy so far -- and is unlikely to provide very much more.

However, the real guiding principle of UK energy policy has been facilitating one single power station -- Hinkley C -- the infamous nuclear plant that was due to come on line in 2017, or 2025, or possibly 2027, or sometime in the early 2030s, or maybe not at all if the delays continue as they have done for the last decade.

Hinkley has required the government to rig the energy markets in a way which favoured nuclear over renewables, just as it became clear to the rest of the world that the future belongs to renewables and nuclear belongs to the past. As a consequence the entirely rational global drop in investment in fossil fuels and nuclear has been matched in the UK with a drop in investment in clean energy, engineered through government policy.

According to recent research, from 2017 onwards we will be losing billions in potential investment in clean tech, a loss due to the government’s ideologically driven energy policies.

This systemic policy failure impacts on all three aspects of the energy ‘trilemma’ -- the government’s chosen framing for energy issues.

Recently the government has emphasised concerns about ‘the cost energy to the bill payer.’ But is this really their main concern, given the lengths they will go to block the cheapest source of power in the UK, onshore wind, and prop up what has been described as ‘the most expensive object ever built’, Hinkley C?

And if their priority really is bills, above all they should encourage energy efficiency -- though sadly for George Osborne it doesn’t provide big new shiny high-tech construction projects where the he can model his famous hard hat.

But cost to the bill payer is likely to soon be eclipsed in the headlines by security of supply. The sensible approach to sorting energy security would be to shrink power demand as much as possible using efficiency and other demand management measures. Then, with a smaller gap to plug, the problem could be solved without the need for imported fossil fuels.

Instead the government appears to hope that shale gas or perhaps Hinkley will ride to the rescue. Needless to say, this was not a sensible approach, and our energy supply is getting less and less secure by the day as the likelihood of Hinkley and a significant shale industry continue to drop.

The third part of the ‘trilemma’ is carbon. At a fraction of the cost of either new nukes or fracking, energy efficiency could reduce demand by more MWh than Hinkley or shale ever will. But we do need some new capacity, and the low-carbon, low-cost, high-security option is renewables.

If we carry on fighting the future and clinging on to obsolete industries, then we will have a big and growing problem, and the government seems quite willing to waste billions in order to avoid admitting its mistake -- that Hinkley and shale gas are going nowhere.

As things stand, we’re in the bizarre situation of sourcing an increasing amount of our energy from diesel farms – collections of shipping container sized, very dirty diesel generators.

So the question is, will we see a hard-hatted Osborne proudly cutting the ribbon on these humiliating symbols of his failure?

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