Rising energy bills and the scramble for energy

When I first started to write about the forthcoming energy crisis, many years ago, it was because it was something that I had studied and analysed; it was my reason for founding Genersys, a renewable energy company; in this case the analysis created the decision, rather than the decision to found Genersys creating my views about energy. For many years my views were ignored. People were just too complacent and comfortable with the existing arrangements and politicians and decision makers either lacked the imagination to understand what would come or were too busy starting wars, running the economy and doing all the other myriad things they do in office while also spending a great deal of time ensuring that they would stay in their jobs.

I have promoted renewables on the basis that the future cost of energy is significant and a very important factor in decision making about renewables. This has caused some disbelief, but now perhaps as respected bodies like Ofgem have now made their studies public, there will be an increased take up of renewables, particularly micro generation like solar heat.

The figures suggested now by Ofgem’s study “Project Discovery”, are these. On a worse case, domestic energy bills could rise (yes even after the existing rises) by 60% in the next seven years, with that figure being above inflation. The best scenarios suggest a rise of 14% above inflation in the next eleven years. These figures have to be considered in the light of the United Kingdom’s domestic energy bills having already risen by 120% in the past ten years.

Of course fortune telling is an occupation with low probabilities of success. My own view is that Ofgem have underestimated the rise, significantly.  Other nations have already identified the energy squeeze that will happen. China is buying oil fields and oil exploration companies. South Korea is investing heavily in renewable energy, so is Chile and I expect Japan to do likewise. The United States is developing a renewable policy which will lead to very significant take up throughout the country. Other smaller less industrialised countries are also spending on renewables.

The reason is this: energy prices are bound to rise significantly. An energy squeeze will be even more damaging than the credit squeeze has been. Every aspect of industrialised life depends on energy – we truly live in the Energy Age. The only way that you can guarantees supplies of a resource like energy, which we have traditionally sourced from finite resources, is through genuine renewables like solar heat, photovoltaics and wind energy. We will still need to have plenty of fossil fuel, but renewables will have to be a key part of every nation’s energy future, not an afterthought as a sop to environmentalists or as a way of reducing the impact of climate change.

Recent reports claim that oil has peaked; natural gas is controlled more and more by a handful of states that will wish to build their wealth upon it, rather as some states have done with oil. Coal is also probably close to its peak and Uranium is also finite. It is clear that the scramble for energy has already begun, and the United Kingdom has not even entered the race.