Power Hungry - 8th November 2011

Ever feel like you need an energy boost, something to help you power on through the day? If you feel run down, spare a thought for UK plc because if industry experts are right, it's not just in need of a tonic; we're running clean out of energy and facing greater competition for vital imports needed to keep the country's business heart pumping.

According to Lord Redesdale, Chairman of the Anaerobic Digestion and Biogas Association, speaking at last week's Sustainable Leaders Forum, the UK will be forced to import 80 per cent of its gas within 10 years. That might sound straightforward (look on the bright side, we won't have to deal with all the mess of extraction and the like) but in reality we're in a tricky position; located on a small island far from any producers, gas due for UK consumption has to be piped halfway round the globe, a service that is reflected in the price and hinders our ability to compete on cost with more local customers.

Post-Fukushima, countries like Japan and even Germany are rethinking their nuclear strategies, placing greater demand on gas supplies as they decommission, while others turn to gas to replace old-fashioned coal-fired power stations. France has already introduced a tariff system to encourage a reduction in energy use; in the UK, the Carbon Reduction Commitment is expected to press business into action. There is even talk of companies that store data cheaply overseas facing 'carbon avoidance' charges on a par with tax avoidance.

In this climate, Redesdale says it won't be long before the effects of fuel poverty are reaching out beyond the home and into the workplace. Clearly, with rising prices and greater demand, energy security is likely to replace targets as the critical driver behind the development of renewable technologies.

That said, Andrew Raingold of the Aldersgate Group surprised many with the news that UK gas prices are among the cheapest in Europe. Sadly this competitiveness does not translate to the Cleantech league table, which shows China taking the lead from the US and the UK dropping out of the top 10.

The government, and possibly the public, may not have recognised that power has shifted, but business is taking the initiative. In 2007, respondents to the British Institute of Facilities Management (BIFM) Sustainability Survey cited time as the greatest barrier to more sustainable practices; today, they list physical constraints. Environmental reporting has become common place among larger organisations, and the ability to demonstrate sustainable practice is seen as a key factor in maintaining competitiveness.

It's hard to imagine UK customers voluntarily cutting energy use by 40 per cent as Japan has done in order to take nuclear power out of the equation, and even more difficult to envisage us following the German model, where 86 per cent of renewables are owned by consumers. In fact, with the latest proposal on Renewables Obligation Certificate (ROC) bandings, the government seems to be favouring large-scale facilities at the expense of micro-generation projects. As costs soar and energy security becomes increasingly fragile, is this a wise approach, or short sighted pandering to big business fears that an increase in domestic generation will result in smaller profits?

Each technology boasts its supporters and detractors, but what is clear is that we need a robust, coherent policy with as much home-grown power as we can muster. Technologies such as anaerobic digestion and gasification are capable of providing up to 10 per cent of UK needs, and continue to expand. However, solar is stalling as subsidies are haemorrhaged. Under current Feed in Tariff regulations (due to end on 12 December) the public bought into solar schemes at an unprecedented rate, outstripping government funds, and using up its allocation for three years in just one. PV has become a victim of its own success, and unless campaigns such as Our Solar Future succeed, the scale of take up is about to leave it – and the UK's 25,000 solar workers – out in the cold.

With thanks to Edie.net and the organisers of the Sustainable Leaders Forum 2011.

 

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