When Amber Rudd set out the Government’s thinking on energy in her “reset” speech, one of her comments was that “it may sound a strange thing to say, but fundamentally I want energy policy to be boring. Frankly, if at all possible, it shouldn’t be noticed.” It’s a sentiment I strongly agree with.
The Secretary of State’s problem is that we are a long way from that point. Like it or not, energy policy has become a political battleground. But we all have a role to play in helping to deliver her vision.
In this critical territory, Bright Blue’s role has been very important. It is one of a number of groups which led and won the argument for the early retirement of coal-fired power stations.
The question we now face is how we keep the lights on in a secure, sustainable and affordable way. 15 gigawatts of coal capacity will be coming off the system by 2025, along with most of our current nuclear capacity, leaving an energy gap equal to 20% of Britain’s power needs.
It would be foolish to claim that this gap could be filled by renewables alone. We will need a balanced energy supply in the future. Gas, nuclear and renewables, as well as storage, interconnection and more decentralised energy will all play a part. What role can the companies I represent play? What do we offer?
The businesses I work with are pioneers and innovators in this changing market. Look at the progress we are making on storing electricity. Renewable companies are leading the way. Britain’s two largest storage projects - the landmark announcement by RES on a 20 megawatt battery storage system, and Statoil’s Batwind project at its Buchan Deep floating offshore wind farm – come from my members.
The innovation we are now seeing in the energy market will – and must – also improve the deal for British consumers.
Here, we are at a turning point. Onshore wind has become the cheapest large scale technology for generating new power in Britain. If we had a market signal, there are onshore wind projects which would clear at the lowest price, cheaper than new gas. The question we face as a country is do we want our consumers to benefit from this cheap source of power or not? And if we do, how can we create a market which allows onshore wind to compete?
The onshore wind industry has benefitted from support from British consumers for over a decade. Now that costs have fallen, it is only right that consumers should benefit.
The Government has rightly said that communities will be in the driving seat on decisions about future projects. The projects where benefits for consumers are greatest are likely to be in Scotland, Wales and Northern Ireland where wind speeds are higher. They are unlikely to be in England, and certainly won’t be in the wind-poor Home Counties.
And if there is to be a future for onshore wind in Britain, the industry is also going to have to engage seriously and respectfully with those who have doubts about wind or renewables more generally. This includes those who have led the successful grassroots campaign within the Conservative Party over recent years to end subsidies for onshore wind, which led to last year’s election pledge and the recent Energy Act. We need to listen to our critics and we need to acknowledge the legitimacy of their feelings and reach out to them. I believe that for those who are not opposed in principle to onshore wind, there is a great deal of common ground.
The overall economic and industrial opportunities offered by renewables are becoming clear. According to Bloomberg, half of all new energy investment globally last year was in renewables. Here in Britain, those who choose to be RenewableUK members now employ over 250,000 people. The offshore wind sector is driving down cost, innovating and investing in our country on a massive scale – over £20 billion in this decade; £6 billion by DONG in the Humber alone, an area with some of the highest levels of unemployment in Britain. In a few months, 1000 workers in Hull will start producing the largest single mould component in the world at the Siemens / ABP site in Hull.
But the story reaches further and deeper. A few weeks ago in Bridlington I met companies building boats, training people for working at height and at sea, installing winch systems and other specialist equipment. I met experts in sea bed analysis, financial advisers, legal advisers, even a former Asda store manager whose father had invested in his business filming the building at the Siemens site and who now has a successful digital media business.
And slightly under the radar in Scotland, Wales, South West England and Northern Ireland, Britain has built a global leading marine industry on the cusp of commercialisation. Global leading test facilities. Global leading companies. At a former oil and gas fabrication site, the turbines for the world’s first commercial scale tidal stream array are being built. Charles Hendry is reviewing the prospects for tidal lagoon power. We know there is value here – the Chinese, the French, the Canadians and the Irish are all looking to take what they can from British-led innovation and research.
There is a new energy mainstream globally and it is coming to Britain. It is disruptive. It is cutting edge. It is bringing investment and new business models. And above all it is shaking up existing markets. We should embrace it. It is not the only answer to the challenges and opportunities we face. But it can – and should – help. It will power Britain forward.
Hugh McNeal is Chief Executive of RenewableUK
The views expressed in this article are those of the author, not necessarily those of Bright Blue.