The energy policy vacuum

The Confederation of British Industry has called the United Kingdom’s energy policy “disjointed” by claiming that there is too much investment in wind energy and not enough investment in nuclear energy and “clean coal” energy. I think that the Confederation of British Industry is wrong on every count.

First, British energy policy is not disjointed; it is non existent. It is going through a transition where the official old policy has been superseded by European energy renewable energy directives and the government’s own climate change legislation which has imposed statutory targets for emission reductions and the use of renewable energy. The government’s energy policy has not yet been formulated to meet its own legal requirements and the requirements of Europe. This is not “disjointed” but simply a policy vacuum. There is no policy.

Secondly the Confederation of British Industry claims that there is not enough investment in nuclear energy. There has been no investment in nuclear energy for many years. Only a few years ago government policy was to build no more nuclear power stations. That policy no applies only to Scotland; the rest of the United Kingdom can look forward to nuclear power stations coming soon to a neighbourhood near you.

The fly in the ointment (which the CBI have overlooked) is that nuclear power stations take years to build and come on stream , so from the giving of the new nuclear power stations a green light about two years ago, it will probably take another eight years for a nuclear power station to start generating its first electricity.

Finally I am puzzled by the CBI’s urging investment in clean coal energy because that is a technology that does not exist. I could understand them urging investment in clean coal energy research, but to urge investment in something that does not exist is very odd. The government has so far claimed that all new coal power stations will be “clean coal technology ready” which is equally puzzling. If words and phrases could cut emissions we would be in no danger of climate change.

The CBI’s stance is dictated because it argues, rightly, that if businesses are to invest in energy projects they need certainty. Of course they do. But the CBI is concerned about big projects where the electricity comes from a large traditional source that their large members can build or create with investment form the public’s pension funds (such as they are) and foreign wealthy investors.

The CBI’s members are not so flush with funds that they can carry out these investments themselves and investors will not invest in projects where there is any degree of risk. If the government shows investors an income stream the investors will exploit it. Otherwise there will be no investment.

The Government appreciate the need for investment and, of course are trying to patiently explain that nuclear and clean coal will eventually come on stream.

The point that escapes the government and the CBI is that the most inevitable form of energy (note I talk about energy and not merely electricity) is microgeneration. We can use existing homes to generate quite a lot of the energy that they use and in doing so avoid the need for large scale nuclear plants or coal plants at all.

The starting point for microgeneration is the cheapest and most effective form of energy creation –solar panels which provide hot water and some space heat. This technology has virtually no significant subsidy to encourage its take up and the solar thermal industry cannot attract any investment because government policy makes it a very risky businesses.

It would be nice to see the government and the Confederation of British Industry turn some attention to microgeneration of clean energy, but with more than words, we need  real policies.