For many years one of the commonest triggers for this kind of conversation was a discussion of energy policy. If I was lucky then the person I was talking with might actually admit that conducting a giant experiment on the world’s climate isn’t the wisest of things to do but they would then rapidly inform me that any policies that might actually start to tackle that were all very well for silly people but serious people knew that they would cost too much. I would then be told that doing anything about the problem would take a long time and be very difficult. It would put bills up too much, imposing costs on industry that will make it uncompetitive and if we did anything we would disadvantage the UK because other countries won’t be as responsible as we are. I might then be told that green energy initiatives aren’t only costly they also provide unreliable sources of supply so aren’t really very practical and could never supply as much power as the real stuff. Fossil fuels.
There is just one small problem with such arguments. If they ever were true then they have now ceased to be so and are well out of date. Here are some of the realities of energy economics.
- Fossil fuels are rapidly ceasing to be the cheapest way of generating electricity even if you only consider the direct cost to the consumer. The single cheapest way of generating power in the UK is an onshore windfarm. In most parts of the world it is solar energy when you take into account transport and supply costs. Solar plus battery storage provides a competitively priced power supply system which is located where that power is used. Large power stations require moving fossil fuels to what is essentially a power factory and then building an infrastructure of power supply lines to get that power to where it is needed. No new countries are going to invest in building old fashioned pylons and cooling towers. Our competitors are therefore investing billions in moving over to alternative energy and we risk falling behind China and India.
- The price of oil and gas have been low on world markets for a couple of years and look like staying low. A minor cause of this is the use of fracking in the US which has increased supply there. A much bigger cause is the simple fact that markets are pricing in the impact of a huge increase in supply from alternative energy. The days of the OPEC price cartel dominating the world market are over because no member of that cartel can guarantee what their reserves will be worth in the future if solar continues to get cheaper. They are having to pump it out fast while there is still significant demand. This is keeping the price low. Renewables are therefore the prime driver of cheap prices for oil and gas. Green energy is putting down your fuel bills.
- Investment in large chunky set piece nuclear power stations have become a waste of money. Hinkley Point in the UK is now expected to cost £30 billion. If by any strange chance it is built on time and to budget then it will cost £92:50 per kilowatt hour for electricity for 30 years. That is twice the current wholesale price in a market of falling prices. Customers are therefore going to be asked to pay twice as much. Worse we will rely on one single source for 8% of the entire country’s electricity. Any minor incident requiring a temporary safety shutdown risks putting the lights out. A major incident doesn’t bear thinking about and cannot be completely engineered out. Even if the project works perfectly at predicted prices then we are left with the problem of how to clean up the mess. Large set piece nuclear factories are therefore less reliable sources of supply than renewables.
- Nothing remotely resembling £30 billion has ever been put into reducing energy use. The technology exists to cut use drastically via better insulation and better management of when energy is used. For the individual home or company investing in conservation or generation doesn’t always pay off quickly enough to be worthwhile. But the equations are now quite close and for the overall economy the gains in reduced import costs, reduced pollution levels, and reduced bills for homes and businesses are enormous. Government financial incentives could therefore very easily tip the balance and reduce use significantly particularly if they were coupled with sensible regulations such as a requirement that all new building projects generate as much energy as they use. The government is therefore failing to invest in cutting use. The quickest, cheapest and most reliable method of meeting a significant percentage of our energy needs is therefore being badly neglected by a government obsessed with an outdated right-wing ideology that it is wrong to guide and influence markets.
What has changed recently is that the day to day economic and financial equation has shifted enormously. For the first time in my lifetime Green energy isn’t just the morally right choice that is best for our collective interest. It is becoming the cost-effective choice for the individual and the business consumer. Importantly that trend isn’t going to stop. It is going to get stronger by the day.
The UK government’s response to the radical shift in technology which is taking place has either been to make soundbite driven announcements about schemes that sound nice but achieve nothing of significance, or to back the outdated technology at the expense of the new. So they cut the subsidies for solar panels overnight just as the industry in the UK was taking off. Then they provided new financial incentives for offshore oil and gas drilling. And they used planning laws to effectively ban new onshore wind farms. But they overruled those same planning laws when they decided to bribe communities to volunteer to accept fracking. They also devised a Green energy loan deal that was so weak and bureaucratic that no one wanted to use it and then scrapped it claiming there was no demand.
We are therefore living in a time when common sense Greens are arguing for investment in future technology and in ideas that are now very practical whilst the Conservative government is furiously trying to stick with an out of date technology and the ways of doing business that go along with it. So the next time you get stuck in a conversation with a defender of fossil fuels I suggest a very simple tactic. Just tell them that out of date fossilised ideas are all very well for silly people who can’t leave the past behind but that science driven hard headed practical people like the Greens can’t afford the luxury of that kind of thinking!