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Two big hitters in business demand radical shift in national energy policy


Two big hitters in business demand radical shift in national energy policy

Two key influencers in business this week put further pressure on the Government to radically reshape long-term energy policy.

CBI logo

Both the Confederation of British Industry (CBI) and Energy UK have made startling and robust demands while reflecting the dangers of inaction. Together they form a significant watershed in the debate over energy strategy.

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Energy UK is the UK’s largest energy lobbying group and its fulsome ‘Pathways to 2030’ report marks a significant change in attitude, with strong movement towards green energy and low-carbon options.

At the same time, the CBI’s publication of ‘Plotting the Course’ reflects results of a detailed survey into business needs, including energy and water, with the focus on infrastructural planning.

Energy UK

Energy UK, which represents interests of the Big Six energy providers, has captured the headlines with its strident calls for effective, long-term action on policy and the need for our own version of Germany’s energy transition plan, the Energiewende.

The lobby group is keen for Government to support further reduction in energy demand, which we have continually advocated through national programmes to help businesses, organisations and households cut consumption of energy and water.

Our work with businesses and in education particularly demonstrates the huge energy and water savings that can be made through simple and effective solutions. See our Projects.

The Pathways to 2030 report also is pushing for new regulations that support electricity storage projects which would help to balance supply from renewable sources like wind and solar power.

Cleaner, cheaper energy

At the same time, Energy UK underlines the urgency for action to persuade the power companies to build new gas-fired power plants as well as keep current stations in action, with state aid if needed.

Energy UK reports that over the next decade, the industry is also set to be revolutionised as Britain moves towards cleaner, cheaper energy with more generated at a local level. Energy efficiency will also play a huge role in reducing household energy bills and carbon emissions.

Lawrence Slade, chief executive of Energy UK, says:

“The UK’s power sector is poised to make a real contribution to the country’s ongoing energy challenges.

“We are already seeing new reliable and renewable sources of energy coming on stream while working with customers will continue to drive innovation putting power in the hands of users to deliver warmer and more energy efficient homes.”

 

The report sets out how the future of energy will be smarter where –

1. Consumers are central to policy– as the costs and benefits of moving to a low carbon economy are clearly set out to achieve customer buy-in;
2. There is a “whole systems” approach– as the power, transport and heat sectors are decarbonised, a cross government and industry taskforce co-ordinates the interactions and arrangements so nothing is done in isolation;
3. Energy efficiency policy encourages customers to take action – as clear, long-term policy unlocks the significant potential to reduce energy use through fiscal incentives and long lead time regulation;
4. Solar & storage is subsidy free – as decentralised energy plays an increasing role as costs continue to fall and regulatory change comes into place;
5. Demand Side Response and smart grids play a significant role – as the right policy and regulatory structures are put in place;
6. There is a more dynamic energy system – as demand side response, interconnection and energy efficiency play an increasing role – while there is still a significant investment needed in large-scale power generation, this could be less than previously thought;
7. Transition to a lower carbon energy system is delivered effectively and efficiently – as the governance and roles of industry bodies are reviewed and clarified; and
8. Predictable and stable policies drive investment – as the sector can then move forward to deliver affordable, reliable and clean energy.

CBI key demands

In Plotting the Course, the CBI says that the Government needs to develop a clear, consistent long-term energy plan and advocates that the National Infrastructure Commission (NIC) needs to hone in on long-term planning.

The circular economy is crucial and the NIC needs to be fully involved to support extraction and storage of energy from many sources while developing innovative technologies such as tidal, hydro and carbon capture and storage (CCS).

The CBI also believes that the future of energy lies in electricity, advocating that most of the country’s energy needs should derive from this resource while advising that electrification of heat and transport would double current peak electricity demand.

The report amplifies some findings from the CBI’s recent ‘Turning Momentum into Delivery’ report where businesses advised the CBI in a survey that resilience of energy supply is the number one priority, with 97% seeing investment in a diverse and secure energy system as crucial or beneficial.

Nine in ten firms (91%) want government to help them to manage energy costs, with 88% saying simplification of the energy efficiency landscape is vital.

Government action

This week, the Government moved to assuage some fears over energy supply by bringing forward by a year the auction of contracts to supply electricity under the Capacity Market, covering power supply for winter 2017-18.

Energy and Climate Change Secretary Amber Rudd advised that the move is aimed at encouraging further investment in power generation, particularly gas-fired stations.

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