TWENTY years ago, as UK Energy Minister, I developed the mantra that a successful energy policy rested on three pillars – security of supply (ie keeping the lights on and the wheels of industry turning), affordability and carbon reduction, writes Brian Wilson
Even a few years earlier, there would only have been the first two and life was simpler. Carbon reduction was the new kid on the block. What became the drive for net zero, though entirely justified, complicated matters greatly. And that complication was enhanced by what seemed to me pretty stupid then and even stupider now – the obsession with eliminating nuclear power from sites such as Hunterston in Ayrshire, pictured above.
Keeping the three pillars in kilter is the responsibility of Government and nobody else. All other participants in the debate including the regulator are, or should be treated as, lobbyists of one kind or another – for or against a particular technology, for or against this or that market solution, and so on.
For government, this is a responsibility that cannot be sub-contracted. If the lights go out or the masses cannot pay to heat their homes, nobody will be interested in the regulator, the prejudices of single issue politicians or rapacious commercial interests. Government alone will be held accountable – and rightly so. That was true 20 years ago and it is true now.
The current crisis of gas supply has long been an accident waiting to happen. It is the product of a quite deliberate policy developed over three decades in spite of many warnings. While all the headlines were about renewables, the underlying assumption of successive governments and, critically, the over-powerful regulator, Ofgem, was that gas would always provide.
It was a conspiracy of deception that so-called environmentalists were delighted to enter into because their priority was not to save the planet but to eliminate nuclear power. Dependence on gas gave cover because, on the face of it, this was an answer to those who warned against an energy crisis as nuclear’s base-load contribution declined.
There were several objections to this argument. First, gas is a fossil fuel. Indeed, until the Thatcher era it was illegal to convert gas into the secondary purpose of generating electricity. Within a remarkably short space of time, we leapt from that extreme to accepting gas as the default source of the UK’s power supply, over and above all others.
Secondly, this transition took place at a time the UK was transitioning from being an exporter of gas to an importer, making us hostage to the vagaries of an internationally traded commodity. At one point, that would have meant 80 per cent of our gas coming from Russia. We hedged against that by developing an interconnector with Norway and other players, notably Qatar, became more important.
However – exactly as we are now seeing – instead of being in control of our own energy supply, we are at the mercy of forces which are entirely for others to decide. Russia is still the key player because it controls the flow of gas into Europe and hence can exert decisive influence over price movements. As consumers are about to discover and industries which rely on gas as a feedstock already know, the price of gas – and therefore energy – is a fickle determinant of much else.
To compound all that, there was the incredibly foolish decision in 2017 to allow closure of the Rough gas storage facility off the Yorkshire coast, without any alternative provision. The decision was taken by Centrica but nobody in government, if they even thought about it, recognised implications which went far beyond the interests of a private company. The lack of storage capacity – not Brexit – is the main reason gas is now far more expensive in the UK than in Europe.
While dusting down my recollections of all this, I came across a submission from the Royal Academy of Engineering in 2002. They warned against “ignoring serous concerns about reliable gas supplies”, the urgent need for more storage capacity and the over-optimistic assumptions about renewables. Mere engineers, what would they know about it compared to the market-obsessed geniuses in Ofgem?
They also pointed out the blatantly obvious, that “the more renewable sources are connected to the grid, electricity storage will become essential – our only current storage capacity is through hydroelectric storage schemes”. Yet what has been done to address the intermittency of renewables? The answer is absolutely nothing – other than assume that when the wind doesn’t blow and the sun doesn’t shine, imported gas will fill the void. And that is what the hypocritical Green lobby has gone along with.
The current storm may pass – though when and how will be more dependent on political decisions taken in Moscow than anywhere else. But if this is not a final wake-up call to government, then what is?
We need to maintain at least the current levels of nuclear power – not because of any irrational love of it, as the detractors sneer – but because it is the only existing source of carbon free baseload. We need to urgently push ahead with Pumped Storage Hydro schemes while continuing to develop other storage technologies. We need a strategy that removes this crazy dependence on imported gas.
All of these are about damage limitation. Meanwhile, we will live with the uncertain consequences of wrong decisions and giving far too much power to a one-dimensional regulator which must become the servant of policy rather than its master.