Starting this winter and continuing for the next four years, the National Grid is planning to offer financial rewards to the UK’s heaviest energy users in return for cutting their consumption at peak times.
This latest attempt to fight the electricity capacity crunch will see companies paid £10,000 for every megawatt they commit to sacrificing between 4pm and 8pm; a sizeable sum, but one that energy secretary Ed Davey claims is more viable than constructing new power plants.
Well, there are several problems here, the largest of which is the notion that heavy industry should be made to pay the price for decades of under-investment in Britain’s infrastructure. And what a price! The inevitable consequence of reducing energy consumption is a loss of productivity, eating into the nation’s GDP at a time when we’re just starting to emerge from economic recession. Instead of tempting new business to open and expand in the UK, we’re telling existing operations to slow down!
To add insult to injury, this stop-gap solution has no hope of actually solving the problem; rather, it serves only to shunt it slightly further down the road, lying in wait for someone else to worry about. Not that we should be surprised, however, as short-term fixes are all the UK knows when it comes to energy policy. The history of British infrastructure post-privatisation can essentially be whittled down to one successive quick fix after another, leaving us with a decrepit power system, a woeful lack of spare capacity, and no financial means to create the intelligent, low-carbon grid that we so desperately need to meet demand.
Davey may be right to say these payments are more cost effective than building new power plants in the immediate future, but isn’t investment in a diversified, sustainable and flexible grid precisely what Britain needs in the longer term? Simply putting this off won’t make the problem go away, and indeed it grows exponentially larger as time goes on.
When stacked against MP Greg Barker’s vision of the “Big 60,000” energy suppliers, in which localised generation takes the strain off the Grid and provides a stable, low-carbon alternative to traditional power, the National Grid’s method of handing out thousands of pounds to buy more time for its rickety old set-up looks somewhat desperate. We shouldn’t be looking for ways to scrape back capacity from those who need it to power the nation’s economy; we should be investing in an infrastructure capable of supporting a sustainable future for UK energy.
Successive governments have categorically failed to listen to the warning signs vocalised by the very industry whose co-operation they’re now relying on to prevent blackouts, an industry that has watched with increasing anxiety as spare capacity drops ever closer to zero. Now, with a situation so dire that mothballed gas-fired plants may be called back to duty during peak demand, it is surely time to take the scales from our eyes and start looking beyond the next election, beyond the next four years, and towards a future that a absolutely has to morph into something markedly different from the one we are currently on track to experience.
- Peter Rolton, chief executive officer of the Rolton Group and former government advisor on the UK’s Renewables Advisory Board