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UK Government urged to address the looming energy crunch

Tony Lodge from the right wing think-tank the Centre for Policy Studies has urged Teresa May to wake up to the desperate state of the British energy industry:

“I spoke alongside [the new Secretary of State, Greg] Clark in 2009 at the Conservative Party Conference on a platform appropriately titled Facing up to an Energy Crunch.  Seven years later and the UK’s energy policy has been allowed to drift further. It is in a perilous state and the warnings which were made at that meeting have all turned out to be well-founded.”

Lodge argues that successive governments have failed to develop and agree a coherent strategy for keeping the lights on:

“Clark will be the fourteenth secretary of state with responsibility for energy policy since 1996. His new minister of state with specific energy duties will be the eighteenth. Consequently, this most important area of policy, which needs stability and consistency, has suffered from erratic leadership, regular U-turns and a lack of long-term focus and planning.”

The result is that the taxpayer has to make generous payments to the operators of Britain’s dilapidated coal and nuclear power plants just to keep them running in the winter to prevent power shortages.

Like many on the right, Lodge sees gas as Britain’s last best hope.  Noting that the Coalition government announced plans to deliver 20 gigawatts of energy from new gas power stations by 2012, Lodge notes that just one is currently being built.  Meanwhile:

“The proposed Hinkley nuclear plant is almost irrelevant in this context as it will not open before 2026 even if it gets approval next month. The government should be brave and instead choose smaller and more modern new nuclear plants for our long-term supply needs.”

Lodge’s criticisms are all the more potent precisely because they come from a right-leaning think-tank.  However, the scale of the problem is daunting.  Several of the old coal power stations that were supposed to continue operating while new gas and nuclear was brought on stream have instead been marked for early closure.  At the same time, disinvestment from the energy industry means that the amount of gas available in future may be a lot less than governments had been planning on.  And even if the new ministerial team decide to go for an all-out push to build new generating capacity, Brexit uncertainty, a collapsing Pound and a generalised depression across the global economy will limit the capital available for investment.

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