Energy policy

The Project Discovery - Energy Market Scenarios report by Ofgem will, I believe, turn out to be one of the most important contributions in getting politicians and the public fully aware of the energy desert that confronts us. The Ofgem press release is here, th FT has collated the main findings here and responses here. The Guardian makes an interesting and valid point here, capitalism doesn't always work.

The four scenarios considered by Ofgem were:-

Green Transition: Under this scenario there is a rapid economic recovery and a significant expansion in investment in green measures. Domestic renewables targets are met and energy efficiency measures are effective. GB gas demand falls but electricity demand increases due to greater use of electric vehicles and heat pumps. The effect on domestic consumer bills is an increase of 23% by 2020.
Green Stimulus: There is a slow recovery from the recession and restricted availability of finance. Governments around the world implement green stimulus packages to achieve environmental goals and boost economic activities. High carbon prices and government policies support investment in renewables, nuclear and carbon capture and storage. The effect on domestic consumer bills is an increase of 14% by 2020.
Dash for Energy: Global economies bounce back strongly but security of supply concerns prevail over meeting environmental targets. As a result GB renewables targets and the Government’s carbon budgets are missed. Competition between countries for energy resources results in tight gas supplies and high fuel prices. Planning and supply chain constraints prevent new nuclear plant from becoming operational before 2020. The effect on domestic consumer bills is an increase of more than 60% by 2016 before falling back.
Slow Growth: The recession continues resulting in investment in gas and electricity infrastructure being considerably lower than before the credit crunch. Low gas and electricity prices coupled with low carbon prices reduce incentives to build nuclear and renewable power plant. This results in an increasing dependence on imported gas for new gas-fired power stations. The effect on domestic consumer bills is relatively low in early years but an increase of 22% by 2020 as conditions tighten.

Irrespective which scenario is more or less likely, in order to secure our energy supply and meet carbon targets we could be looking at investment of up to £200 billion. Considering that the National Debt is the largest ever and in the region of £800 billion adding another £200 billion makes you gulp. To make it worse, it is likely that increases in domestic energy bills of between 14% and 25% by 2020 (from 2009 levels) and possible wholesale price spikes of 60% in the meantime are frightening. But that is the point! Its time for a major debate on the culture of energy use and a sensible, consistent, without predjudice policy driven debate on renewables/nuclear/fossil energy in conjunction with energy conservation regimes. You cannot divorce one from the other.

The matter of greatest concern is energy security here in West Wales. We are at the end of the line when it comes to transmission but further up the ladder when it comes to clean renewable energy generation. If there is such a thing as 'transmission miles' - by Ohm's Law it does exist - then using generated electricity closer to source has some advantages.