Tonight:
5°c
One of my earliest memories of any national event is the power cuts of January 1972, caused by striking miners, and of an accompanying sense of despair far worse than the present economic crisis. Yesterday energy regulator Ofgem warned that we could be heading back there, predicting that without investment of up to £200 billion, the lights could go off within the next decade.
Much of the blame lies with ministers. And unless they bite the bullet now then not only will our electricity system fail; we won't have a hope of cutting emissions enough, without which dangerous climate change will make blackouts look a distinctly minor inconvenience.
Whether or not the lights in our homes do eventually go off, for example during a really hard winter, the looming energy crisis will push up our power bills. The generating industry simply hasn't invested in enough new capacity, and we're far too dependent on gas, the wholesale price of which has soared in volatile markets.
Add to that the costs of the shift to greener power and of new “smart” meters, and Ofgem is warning that in future, average household energy bills could hit £2,000 a year (against around £1,200 now).
Why? Gordon Brown is fond of talking about his readiness to take “difficult long-term decisions”. In fact, energy is a classic case where New Labour kicked decisions into the long grass: ministers didn't even bother with an energy white paper until they'd been in office six years.
Yet we knew all along that our nuclear power stations would come to the end of their lives, with most to be decommissioned by 2020. Nine major coal and gas-fired plants will go by 2015. Our North Sea gas production peaked in 2000. And it has been clear for years that Britain would have to ramp up its pathetic renewable energy resources.
But ministers didn't do anything — firstly because of their knee-jerk scepticism for anything green. Even when they signed up to new targets for cutting carbon emissions, they did almost nothing to achieve them.
Second, they clung blindly to the privatised electricity generating system they inherited. Indeed, Gordon Brown hectored the rest of the EU endlessly about deregulating their energy markets. Yet it has been obvious for years that privatised electricity wasn't working in the national interest — hardly surprising, as several big companies are foreign.
They were happier to sweat their assets (and fleece consumers) than to invest — in part because of government dithering. And renewable energy still makes up less than four per cent of our total, even though we're committed to an EU target of 20 per cent of our energy coming from renewable sources by 2020.
Yesterday's Ofgem report thus represents a volte face, an acceptance that government will have to intervene if we are going to get the investment and shift to renewables that we need. Energy and Climate Change Secretary Ed Miliband has admitted as much.
Will Mr Brown have the sense, at last, to accept this? It may not matter soon anyway. It could be David Cameron who has to prove that he has the foresight to retreat from his party's cherished ideological nostrums, so that private companies produce our power, but within targets set by government. If he doesn't, the lights really might start going out once more.
Reader views (5)
Mr Neal,
You've missed a few oddments. First, the call for a "Central Buyer" is hardly "renationalisation" - it's in fact a return to the way that the electricity market worked for the first ten years after privatisation, in the days of the "Pool". Worse, the other part of the argument - for payments for connected capacity - was also part of the pre-2000 industry.
In those years, something like 30,000MW of highly efficient new generation was built, so it's hardly the case that privatisation precludes investment.
What has gone wrong is rather more specific. A government obsessed (for political reasons) with renewables, and dithering re all other forms of energy, most specifically nuclear. Government has currently committed the consumer to subsidise offshore wind farms to the tune of £90-100 for every MWh they generate - that's versus a typical wholesale price of £30/MWh.
After nearly ten years of that policy, we've got about 4,000MW of wind farms attached to the grid (with subsidies for renewables costing £1Bn per year). And do you know how much that 4,000MW was generating for most of the recent cold snap?
About 100MW. Our total demand was about 60,000MW.
It's not that the private sector won't invest - Government has made it impossible to invest anywhere else (no licenses for coal & nuclear), and incentivised investment in a wasted opportunity. Renewables and energy security are mutually exclusive.
- Andy Dawson, Crowthorne, UK, 05/02/2010 15:01
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"To start with we need to kick the "Tree Huggers" in to touch. We are a nation sitting on over 300 years of coal, This could not only be used to make electricity, it could also be used to make gas.
- Gerry, Chatham, KENT"
The EU has a big say now in all this - too many restrictions are now put on us!
- So, Oxfordshire, 04/02/2010 17:33
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It is time to get realistic about 'renewable' energy. Wind power can never provide all the electricity we need as it costs four times as much as coal to generate electricity and the wind is not consistent or reliable. Wave power is an option, but is also very costly.
We need to use the resources at our disposal, namely lots of coal and the ability to build or replace nuclear power plants.
Climate change is a reality: the climate changes every day. But rather than being caused by CO2 and the temperature rising, it is more likely that our weather is affected by the sun's activity and cloud cover. And the recent festive period shows that the world is going through a bit of a cold snap at the moment and has been for about 12 years.
The next government needs to wake up to this fact and start building a power infrastructure to cope with our needs.
- Nobby Clark, Perth, the Scottish one, 04/02/2010 12:46
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To start with we need to kick the "Tree Huggers" in to touch.
We are a nation sitting on over 300 years of coal, This could not only be used to make electricity, it could also be used to make gas.
- Gerry, Chatham, KENT, 04/02/2010 11:50
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A "save it" campaign similar to those in the `70`s should be undertaken in earnest.
Yes, we are a lot softer now, less used to hardship, dishwashers with dull output equals calamity for some, nevertheless tricky times and profiteering power companies demand we fight back.
We should structure VAT in a way that encourages thrifty use of energy.
This would be easy to implement for domestic power supplies;
First (i.e.) 1000 units - no VAT
Next 1000 - 10 percent VAT
Next 1000 - 30 percent VAT
And so on.
This would encourage efficiency savings, and reduce the need for more power stations and shortages in future.
It exactly reverses the energy suppliers pricing structure, which only encourages over consumption, which, in the end, is bad for us all.
And if, in future, the power IS cut off occasionally (as it was in the `70`s) dull dishwasher output may vex you for some time to come, I`m afraid ladies!
Better start stocking up on vinegar and elbow grease!
- Darius, London, 04/02/2010 10:38
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