The next General Election is just a year away. What will be the energy issues on the table and who will be debating them? Will the Lib Dems still be in existence or will they, after an uninspiring role in government, implode and leave a simple choice between Labour and the Conservatives? Or will they, as the deep and principled people we have grown to love, simply switch sides? Could we have a new Lib-Lab coalition?
So what will these mean for the energy industry? Labour’s last policy review document says it will abolish Ofgem and create a ‘tough new energy watchdog’ with the power to force energy companies to pass on price cuts when wholesale costs fall.
It also proposes setting up an ‘Energy Security Board’ to plan for and deliver the UK’s energy needs. Labour is thinking of creating an organisation to act as a ‘guiding mind’ for energy policy decisions – known as an ‘energy security board’ – to bring in ‘to referee the big energy wrestling match’.
This idea has been backed by academics at Newcastle University who say, in a new briefing note, that the Government should establish an independent, expert body to inform energy policy and technical decisions. “This group would be able to take a holistic, long term view about what is required and inform technical decisions and energy policy in a more effective manner than is currently being achieved,” they say.
All very laudable, as are their questions about effective energy competition, but perhaps the most interesting new point concerns water use in electricity generation.
Research shows that in certain low carbon energy scenarios, such as those with high carbon capture and storage (CCS) or high nuclear capacity, there will be increases of between 30%-399% in water abstraction and consumption by 2050.
They say that power stations could be forced to reduce production or even shut down if there is not sufficient water available to keep them safely operational in the future. And they add: ‘It is vital that the levels of water use across potential energy pathways is given serious consideration and only those options that reduce carbon emissions while maintaining the UK’s water security and protecting our marine and estuarine environments are taken forward.’
But really, aside for a period of policy uncertainty that any General Election will bring that will unnerve investors, perhaps the biggest question to be answered before the next election is : what will happen if Scotland votes for independence?
Dominic Maclaine is an EPG Associate and used to be the editor of New Power before he sold the business. He conducted PhD research into electricity supply competition in the UK and Norway at SPRU. He was previously the editor of the monthly newsletter Power UK published by Platts (and previously the Financial Times). He is currently writing a book about recent developments in the UK electricity market, to be published by Routledge.
Posted by: rhoggett
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