November 29, 2012

expert reaction to the Energy Bill

The energy minister Ed Davey unveiled the government’s Energy Bill, paving the way for making the UK a low-carbon economy.

Dame Sue Ion, a Fellow of the Royal Academy of Engineering, said:

“Today’s statements seem to take on board what we at the Royal Academy of Engineering have been arguing for some time: that the engineering and financial challenges are unprecedented and immense and that energy is a vital, valuable and pricey resource.  Much more effort will need to go into reducing energy wastage as well as into new generating and grid assets.

“Contracts for Difference will be struck in the future so there is still a way to go to give investors the confidence they need that the strike price across a range of technologies will make investment attractive to proceed.  Investors need certainty more than anything else if we are to attract the massive amount of capital needed to refresh our infrastructure.  The UK has to be seen as an attractive market otherwise companies will move their funds to other countries offering a more stable and rewarding environment.

“The potential exemption for energy intensive industries is really important and means that Government has finally recognised that ‘you can’t leave it all to the market’ (otherwise we would just be exporting more manufacturing jobs), that some industries are part of a national strategic requirement and that manufacturing industry jobs matter.

“It is now recognised that one organisation needs to have full oversight of the entire picture and that National Grid should take that role as ‘conductor of the orchestra’.

“Government has recognised that it needs to take up the powers it has to ensure the lights stay on through a capacity mechanism.”

Professor Roger Kemp FREng of the University of Lancaster and Chair of the Royal Academy of Engineering’s Heat working group, said:

“The Energy and Climate Change Secretary gave details of some of the initiatives the government is taking but it came over as a number of disconnected measures; what was not mentioned was the overarching need to see energy as an integrated system.

“A major reduction in carbon emissions from domestic energy use will require switching from gas to low-carbon electricity as the main source of energy.  The introduction of electric vehicles will further increase the load on the electricity grid.  Government needs to develop a truly integrated energy policy that brings together electricity,  transport, heat, and the power of a future smart grid to solve the trilemma of energy security, affordability and sustainability.”