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COMMUNITY UPDATE

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When it comes to creating a greener UK with whom does the onus fall when it comes to reducing energy use? Is it consumers responsibility, or perhaps government and industry should take the upper hand? According to delegates at a recent Criticaleye event on creating a greener UK, consumers, industry and government need to adopt more sustainable practices if we are to maintain a vibrant economy.

Nigel Robinson, Managing Director, Utilities, ING Wholesale Banking believes that government should be taking the lead: “Government and organisations should be considering complete all-round solutions to increase the viability of green energy. Investment in renewable energy is critical to fuel the industry and encourage upstream partners to develop more efficient technologies on a larger scale to achieve grid parity.

“Government spending on renewable energy is necessarily restricted. It needs to see additional return on investment above cost of capital through the creation of new jobs and wealth coming directly from its renewable spend.”

Energy companies face a dilemna. How can they reduce energy use and encouraging renewable sources of supply without damaging their own bottom lines? A combination of government policy and industry may be the answer. Rob Harris, Non-executive Director, Ethanol Ventures explains: ‘’Our politicians currently recognise that a low-carbon planet is becoming big business and is an absolute to secure the UK’s future energy demands and re-balance the economy. However, these compelling choices come at a significant commercial cost. Organisational capability is key. Companies will need to continue to invest in training and skills development. Government policy needs to consistently support the supply of core skills and selected clean energy research as well as providing the economic and fiscal policies to attract, encourage and retain low-carbon talent and investment in the UK.’’

Energy in the UK is running out so what will be used to fill the gaps when shortages begin. Mike Eyre, Executive Director, Rurelec plc says:  “The prosperity we have enjoyed in the UK for the last three decades has been significantly underwritten by our North Sea oil reserves. These are now coming to an end.  It took nearly a decade for a highly skilled and experienced UK to build Sizewell B, its last nuclear power station commissioned in the early 1990s. We have no reason to be confident that we can build four nuclear power stations in a decade, as is being forecast as needed to plug the UK energy gap.”  

Consumers also need to take responsibility for decreasing their use of energy. According to pundits, Britons are spoiled; for too long they have had access to cheap energy and, possibly due to the mild climate, have not had to produce more efficient buildings. “Our society is used to 'cheap' energy and does not see the link between energy costs and fighting climate change. Many people would think that 'greener and more sustainable' would mean cheaper.  Little has been done so far to make the costs of transition transparent,” says David Bonser, Associate, Criticaleye.

Sustainability experts believe that consumers need to be educated about using less energy and the effect that current usage is having on our climate. “We need reduction on the demand side, through education on use and value of energy, coupled with massive roll out of energy efficiency, including building insulation.  The UK needs a culture change from being energy squanderers, to energy savers. The only question remaining is whether that will be through carefully managed culture change programmes, or through forced blackouts and natural economic penalties, as oil climbs through US$200 a barrel. Either way, some emission reductions are likely to be achieved,” says Mike Eyre.   

But changing consumer behaviour is a challenge; many believe that the only way to change attitudes is to hit individuals in the purse. Consumers are unaware of the imminent energy shortages.

Although a switch to renewable energy is often seen as a silver bullet, there are concerns about its effectiveness and cost. Nigel Robinson provides some insights into problems with investing in renewables: “On the demand side, consumers need to contribute to more responsible energy usage. An increase in the price of electricity is inevitable to generate the returns needed to generate and supply clean power from more expensive technologies such as offshore wind and CCS coal fired plants. Price protection for retail customers through regulated tariff mechanisms are not the answer (other than for populist support) although increased regulatory monitoring of retail pricing is likely.”

David agrees: “I think the key issue is not about 'renewable' energy but about 'low carbon' energy because the way to limit climate change is to limit carbon in the atmosphere.  Renewables are one form of low carbon energy supply. I don't think it is a case of energy efficiency or renewables.  Both are viable ways of reducing carbon emissions.  Government should encourage both. Replacing fossil generation with renewables is a major challenge; changing attitudes to energy usage is an even bigger challenge!"

The answers to the sustainability questions are not easily formed. What is clear is that someone needs to take the lead before the problem is irreversible.

Mike Starkie, Group Vice President & Chief Accounting Officer, BP plc concludes:  “The UK needs action urgently if we are to transition to a stable energy-economic environment for the future. In particular, electricity supply in the UK is precarious and we may soon be facing power cuts which will undermine social stability and economic activity. Our energy balance of payments is deteriorating fast. Unfortunately there is little evidence that government takes any of these issues seriously and is merely fiddling around the issues.”

If you are interested in the issues raised in today's update, you may also be interested in some of Criticaleye's Insights on the subject. Energy Management in Buildings is a recent paper contributed by Affiliate Member BRE and written by the Knowledge Transfer Network which offer practical advice on controling energy use. The Write-up of another Criticaleye event entitled Engaging Consumers to Reduce Energy  may also be of interest, as would our upcoming event Towards a Common European Power Market.

I look forward to seeing you soon,

Matthew