Published: 4th August 2016
My column is a week late and there is a good reason for this that is not connected with me lying in the sun or enjoying a cruise. The Prime Minister’s sudden decision to review government support for nuclear new-build at Hinkley Point in Somerset threw me into a whirlwind of media activity last week. As a long-term opponent of Hinkley, and of nuclear power in general, I was delighted to be able to speak widely on this topic.
For a country that likes to pride itself on its industrial innovation, the UK has fallen years if not decades behind developments in energy strategy. During interviews I was repeatedly asked about the question of baseload and told that renewables cannot provide this. Readers of BusinessGreen are probably well aware that this tedious refrain is used by those who would hold back the rapid deployment of renewable energy systems and demonstrates a failure to understand how energy policy is developing. National grid boss, Steve Holliday, said last year that the concept of baseload is outdated.
Innovative energy systems are no longer based around centralised grids and vast and inflexible generating installations. Rather we have an increasingly decentralisedgenerating capacity and need to use smart technology to match supply and demand. In this setting the nuclear power station, with its need to be constantly producing electricity, fails to demonstrate the flexibility of production that we need.
We do also have two viable options to balance renewable supplies. The first is via an interconnector across the North Sea to Norway enabling us to tap into spare generating capacity from cheap Norwegian hydropower.
The second is the tidal lagoons that are planned for the Severn Estuary and currently awaiting sign-off from the government. Although the first project at Swansea will come in at a slightly higher price per KWh than Hinkley, future lagoons will be able to exploit economies of scale and the price per kWh should fall rapidly.
The holy grail of energy policy, of course, is to reduce demand so that no expensive and environmentally challenging construction work is needed at all. There are commonly two approaches to reducing energy demand. The first is improvements to energy efficiency so that overall demand is reduced. A recent report by McKinsey calculated a range of efficiency measures which have massive potential to reduce UK electricity demand.
The second approach is to balance supply and demand through smart metering, as recently outlined by the National Infrastructure Commission. The NIC found consumers could save up to £8 billion a year by 2030 whilst also helping the UK meet its 2050 carbon targets through a focus on interconnection, storage, and demand flexibility within the energy generation system.
Technological developments in energy policy proceed apace; it is the public policy debate in Britain that has stalled. The abolition of DECC by the new Prime Minister caused great concern amongst environmentalists. But with continued government subsidies to fossil fuels and an attraction to the dirty, dangerous and deeply unpopular process of fracking, perhaps this is not such a surprising move.
In the 10 years since plans for new nuclear plant at Hinkley have been discussed, the energy market and renewable technologies have changed beyond all recognition. To paraphrase Keynes: when the facts change we expect politicians to change their minds.
A week is definitely a long time in politics. So let’s hope the few weeks the government has allowed itself before making a final decision on Hinkley is long enough to wake up to the changes in energy technology and systems the UK needs and to begin to plan a much needed national energy strategy fit for our climate change era.