You won’t have seen this widely reported in mainstream media, but leading UK businesses have expressed growing alarm about the insanity of a government energy policy based almost entirely on the hope (it is no more than that) that it will be possible to produce more than a few months’ supply of shale gas to keep the lights on after what remains of North Sea gas has been used up.
In December, the Confederation of British Industry released the results of a survey into the concerns of British business, which revealed that:
“Despite progress over the last parliament 54% of firms are less confident that they will see tangible investment over the next five years with two-thirds of businesses unhappy with the UK’s ability to turn momentum into delivery. Nowhere is this truer than in energy policy. Almost three-quarters of respondents identified security of supply as crucial and almost all (97%) of respondents felt that investment into a diverse energy mix is vital. But business is unimpressed with the politicisation of energy policy, with 90% believing investment is being put at risk by short-term policy changes.” (my emphasis)
Then, at the end of January 2016, business leaders delivered an open letter to the UK government almost begging them to change direction:
“UK industrial firms already pay higher electricity costs than EU competitors, and spare capacity on our grid is getting squeezed as we phase out older power stations… Getting the investment we need to address this requires clear leadership and stable policy from government. We need more of this in 2016.
“To unlock investment, we need a clear long-term framework – so companies can plan for construction projects that will last into the next decade. To ensure we are delivering new low carbon capacity at an affordable cost for consumers, we need to make sure the market is open to all technologies, including new onshore wind developments, where they have local support. We also need to make sure we are investing in the capacity of UK supply chains to build on our expertise in existing and future technologies, from offshore wind to carbon capture and storage.”
Unfortunately, the UK government seems to have blindly swallowed the Wall Street hype about America’s shale revolution, assuming that technology rather than free quantitative easy money was what unlocked the US shale plays. But whereas the US has access to massive shale deposits (you could fit the British Isles inside the Marcellus!)the UK has tiny deposits located in difficult geology. With global oversupply, crashing prices and a likely new recession, how much of the UK’s shale gas can be profitably recovered is a moot point. But as we have said many times before, UK government policy looks set to leave the UK without power in the very near future.
Tim Watkins book – Britain’s Coming Energy Crisis – is available on Amazon and from most bookshops