For years I’ve warned of the dangers of the Tories policy on energy. Well now we see the inevitable end result. People in the UK are getting letters warning them of a massive increase in energy costs from April the 1st onwards. And I’m afraid, its not an April fools joke. Bills are going up by an average of 54% across the board. Gas is effectively doubling. And while its not such a steep rise for the unit cost of electricity (I think its about 20-25%), but the standing charge is essentially doubling. And these price rises are mostly down to factors unrelated to Ukraine. The fallout from that on bills will hit in October, when further price rises are expected.
And this is all the inevitable consequences of a Tory energy policy that has amounted to giving corrupt party donors whatever they want, even if its counter productive, or conflicts with basic common sense. And why come up with a working policy (which involves lots of thinking and hard stuff like that), which can provide actual energy at an affordable price, when you can just papering over the cracks with lots of media spin from a pro-Tory press (green new deal….based on fracking and coal!). As well as populist policies such as a price cap system that destroyed competition and drove most of the UK’s energy firms into bankruptcy.
Energy policy is about long term decisions, as it takes decades to develop new energy sources, and for the impact of these changes to work their way through the economy. But of course if there’s a sudden energy crisis, the impact is felt straight away. Most European countries have dealt with this by adopting a long term energy plan. Germany’s Energiewende is a good example. Crucially these European energy plans are often built on the basis of cross party support. So, while the conservatives in Germany have sought to stretch out the time they can keep using coal and nuclear. By contrast the Greens have tried doing the opposite and speeding up the roll out of renewables. Similarly in France, whose energy plan is nuclear heavy, priorities have increasingly switched towards renewables, as the prices fell and technology improved. My point is, that while individual governments might come and go, and they will alter the plan in line with current technology, events and politics. But they aren’t going to significantly change the plan (at least not without consulting with the other parties first) or scrap it completely.
In essence the reason why the UK is in this mess is that its never really had a long term energy plan and successive governments have kept taking various stabs at it….and failing! We’ve had energy minsters whose sole job was to turn off the lights and go home. Hell at one point they even got rid of the whole energy department entirely for reasons related to the internal politics of the Tory party. We are talking about policies being hastily stitched together by spin doctors and then implemented without any sort of due diligence (e.g. the Northern Ireland’s RHI scheme), then having to be scrapped later (such as Johnson’s Green homes scheme), when it was turned out to be unworkable. Its flip flops on flip flops.
So for example this rise in the standing charge. Well this probably due to the fact that, while there is a price cap on the unit cost of electricity, there is none on the standing charges. So they might as well jack it up as much as possible, even if from a national point of view this is a bad idea. As pushing up the standing charge means that energy efficiency measures aren’t going to be as effective (as you still have to pay it regardless of how little energy you use). Its also likely to lead to an increase in fuel poverty.
Of course the other benefit of a price cap rise is it allows the Tories to continue with their favourite hobby of bashing renewables. I can guarantee you, come April they will be blaming this price cap rise on green energy. In truth the Tories cut most renewable subsidies along time ago. And the price of renewables has been steadily falling, to the point where renewables are now the cheapest way to generate a unit of electricity. Yes, there are other costs related to operating a grid. But clearly encouraging investment in renewables is an excellent hedge against high gas prices.
The Tories hatred for all things green is so strong, they not only cut subsidies but banned certain types of renewables (such as onshore wind) and even removed tax breaks on renewables, so you have to pay taxes for the privilege of going green (and for private companies those taxes find their way onto your energy bill). And while there has been a rise in the overall “green tariff” this is, as noted, largely down to failed energy schemes mismanaged by the Tories. In fact analysis by Carbon Brief has shown that the decision to cut the “green crap“ (as the Tories call it) has directly contributed to at least some of the recent rises in energy bills.
The closest the UK came to a working energy plan was under the labour government of the 1970’s. Then the wicked witch of the west Thatcher/Major government, came along and advocated for a mixed approach of fossil fuels, but with more of an emphasis on gas over coal (more to stick it to the labour voting coal miners than for economic & environmental reasons), with nuclear power promoted as well and some renewables added as an after thought.
However, thanks to the Tory policy of privatisation, nuclear was unable to deliver, largely on reasons of cost (they planned ten reactors under this programme and only built one). British energy, the UK’s primary nuclear energy company, would essentially go bankrupt before being bought out by EDF, a state owned French company (so this was basically the UK paying the French government to nationalise their nuclear industry for them, as it was against the Tories religion of free-markets).
During the labour government, the energy white paper of the 2000’s largely ruled out nuclear and coal and focused more heavily on renewables (which would be promoted with subsidies) as well as on gas….although they weren’t exactly clear about any sort of a timetable for getting off fossil fuels nor where this gas was going to come from. Labour did backtrack on nuclear briefly, likely because they’d been schmoozed by pro-nuclear energy cheerleaders. But since this lot didn’t know what they were doing, it went nowhere really.
Then the Tories came along and began to fiddle. And the problem since then has been that they fundamentally do not and never have understood what they were doing. I mean we are going beyond short sighted policy focused on the next election. We’re talking about setting policy based on whether a Tory donor is going to kick back enough money to let buy me a new yacht the the end of this month. Or making sure Boris doesn’t look like a twat at a climate conference next week. And when inevitably reality won’t bend to their will (reality have a strong pro-facts bias), they adopt a policy of punishing successes (like renewables), while rewarding failure (such as nuclear or fossil fuels).
For example, nuclear energy, which the Tories have had a long obsession with. You’ll often notice a difference between those politicians in Europe who are pro-nuclear and those in the UK. The Europeans will talk about the latest light water reactor designs, or debate the long term prospects of ITER. UK nuclear cheerleaders will talk about LFTR’s, SMR’s and sometimes get fission and fusion confused. In other words, the Europeans live in the real world where nuclear energy is expensive, complicated and slow to install. Although it does have the benefit of being a reliable and carbon free source of energy. While the Tories are instead living in a fantasy world of unicorns and sunlit uplands (and presumably they think we can rely on Oompa Loompa’s to build the reactors).
As a result, the only nuclear reactor project being actively built in the UK, is the one near Bristol….being built by the French….at great expense. While all other attempts at building another have collapsed, largely because of the Tories inability to square the circle the nuclear energy costs a lot of money (and no the contractors won’t work for free), takes a long time to plan and requires close co-operation with international partners (which brexit has hardly helped out with).
The Tories other favourite delusion is fracking. Firstly there is the environmental impact. Its generally accepted to be worse than conventional gas for carbon emissions (how much worse is open to debate) and can lead to issues like ground water pollution and earthquakes. Sure you can get away with that in rural parts of the US (Trump could go to a house in the deep south, shoot the dog, sleep with the daughter, make off with the family silverware and they’d still all vote republican…and blame Biden for everything), but that ain’t going to work in the UK. Several marginal seats, including some of those in the red wall, are in the main fracking areas. Several of those Tory MP’s only got elected because the promised to vote against fracking.
The other issue is that there is a big difference between resources and reserves. That is to say the difference between the amount in the ground and what we can actually economically expect to extract. There are essentially two kinds of companies in the oil industry. The producers, who extract and sell the oil. And the exploration drillers who actually go out and find it. In order to do that, they need investors, who aren’t going to invest unless they expect to see a return. Hence the exploration companies have a perverse incentive to focus a lot on the potential resources and less on the practicalities of how much can actually be produced (that’s someone else’s problem). Or to put it less politely, they are a gang of bullshitters, con-artists and snake oil salesmen. I think you can guess which lot the Tories are in bed with.
And as with anything else energy related, this all takes time. And I won’t expect to see any major move production wise until after the next election. Unless fracking has cross party support, the oil companies will have to worry what happens if labour ends up winning and ban it (and by coming out against fracking that’s an easy few dozen seats they can win off the Tories). The oil companies will have wasted billions of pounds for no gain.
Meanwhile up here in Scotland, the Scottish government has used what influence it has over energy policy, to stick to the original plan of adding more renewables. As a consequence Scotland is now a net exporter of low-carbon electricity (once we factor in the remaining nuclear energy on the grid). And will shortly be in the 100% club for renewable electricity. So it shows what the UK could have achieved if they’d just come up with a plan and stuck to it.
Of course, there’ two problems with the Scottish plan. Firstly, only about 20% of total final energy consumption is electricity. The rest is transportation fuels and natural gas for heating. In fact as you can see below, its the spike in heating demand that’s the primary spike in energy demand for the UK.
This means that you need energy storage. Well two kinds actually, short term energy storage to even out the peaks and troughs between daily production and consumption (possibly via batteries and a smart grid). And inter-seasonal storage to deal with large seasonal fluctuations in demand (perhaps via underground storage of hydrogen or large scale pumped hydro storage). Either way, such schemes take a lot of time to build and develop. And time isn’t really on our side.
The other issue is the need to lower that big spike in demand mid-winter. The more energy efficient your economy (and in particular housing stock), the lower that spike is going to be, meaning you can get by with less need for energy storage. The previous labour government had a plan to make all homes in the UK zero carbon by 2016, which the Tories abandoned. A policy change that benefited only one group of people – house builders, including many Tory donors (as it allowed them to save a few thousand on insulation costs….even if it ends up costing the home owners tens of thousands over the lifetime of the house and leave the UK more dependant on gas imports).
The end result is that the UK has some of the worst homes in Europe for energy efficiency. We could retrofit more homes with insulation, or install more renewable heating systems (such as heat pumps, biomass boilers, solar thermal systems, etc.), something the Tories have also scrapped (hence the people lying down in the middle of roads protesting).
And the brexit dimension also has to be considered. Consider that if the EU goes ahead with its plans for a crash course in getting off Russian gas, that’s going to have big implications for the UK. Most of the supplies the UK relies on, be it from Norway or LNG, will become much more expensive (the EU will always be able to get better more favourable deals negotiating on behalf of a bloc of countries than the UK can manage) or unavailable. And sneakily buying off Putin won’t be an option, as supplies from Russia via Europe will be cut off. And while the rest of Europe tends to have large reserves of gas (typically enough for a winter). The UK doesn’t, thanks to their decision to shut down the one large storage facility the country had in 2017.
My point is, its a mess and entirely preventable. We can blame Putin for many things (notably being a war criminal on the same level as those who were hanged at Nuremberg), but he hasn’t been in charge of the UK’s energy policy for the last few decades. And if anyone in the Tory party thinks they can get out of this mess with a few meaningless slogans and randomly assigned targets (based more on bribes and ideology than what’s actually sensible), then think again.
Like I said, energy policy is about long term planning. There are no quick fixes. After all, if there were, don’t you think someone else would have done it along time ago? Unless their energy plan is well thought out (i.e. vetted by experts not Tory party hacks), realistic in its goals, fully costed and has cross party support, it will go nowhere fast. If we could run the country off of Tory hot air, we’d have an energy surplus.
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