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on Sep 22, 15 • posted by rhoggett •

New Thinking: Saving Face

Saving Face

Catherine Mitchell, IGov Team, 22nd September 2015

IGov is investigating the link between innovation and governance. Ideally we would like to produce our own theory of why it is some countries seem to be more able to move to a demand focused energy policy – in other words an energy policy which minimises the energy it uses.

The idea behind IGov was to understand why it is that Britain – as opposed to many other countries – takes such unique decisions which tend to ignore best practice elsewhere and which tend to be relatively unsuccessful (and expensive) compared to the policies undertaken in other countries to reach the same goal.

IGov accepts that not all innovation is ‘good’ innovation, and that the kind of innovation that we want within energy has to be ‘directed’. However, IGov does take at face value that Government does want to do what it says it wants to do i.e. cut carbon by 80% by 2050 from 1990 levels. In our view, the best first step for that is to reduce total energy use so that the system which has to be decarbonised is as ‘small’ as possible. This means it is easier to ensure security; to minimise attendant costs, like network upgrades and so on for the benefit for customers; and so that the energy system produces less pollution overall.

While the global energy system is still very much dominated by fossil fuels, recent public policy announcements (here, here, here) and investment decisions show the tide has turned in favour of renewable energy and energy efficiency. Yes, there is some global new nuclear power – and also in China – but it is minimal compared to renewables. As Kofi Annan’s recent Africa Progress Panel points out (and I paraphrase) – why wait decades for energy when you can have it small, moduler, energy efficient, cheaper and quickly. The overall direction of travel within energy systems globally is to broadly move towards a decentralised and smaller scale system, albeit some slower than others, and with some outliers.

And Britain is an outlier of outliers. Hence in one way it is easy to understand why the Treasury has just laid another 2 billion on the table to entice China to come into Hinkley as an investor: it is just another decision in a long history of energy policy decisions which seem to make little sense; which everyone knows will be a big and costly mistake; and which the Government continues to do anyway.

Because of technical issues, the key technical choice the system architect has to make is whether to prioritise centralised power or decentralised. By pursuing nuclear power, Britain has chosen to remain centralised – and this is almost entirely unique in the world today. But as has been written about elsewhere, Britain cannot house enough new nuclear power plants to make a material difference to climate change and therefore it cannot have an only centralised system. In this sense, decentralisation has to be the priority choice for GB.

Obviously history matters in energy policy. And the British attitude to nuclear, rather than say coal, is of course fascinating. But times move on, and Governments need to keep up with the times so that it does not spend its scarce cash on ‘white elephants’. Fossil fuels and nuclear encourage large scale developments, investors and so on. The new energy technologies with rapidly falling prices like solar and ICT encourage a different scale and different ways of operation. This means old accepted ‘norms’ like baseload will disappear – to the economic benefit of the system and customers but negatively for nuclear which focuses its generation on baseload. Mixing up these scales does not anyway help each other, but in terms of encouraging economic development to fit in with the rest of the world, supporting nuclear power is like putting a mega boulder on a 2 lane, 2 way road.

From the outside, the main reason for the theatrical overture to China appears to be saving ‘face’. By ‘face’ I mean that the Government has got itself into the position whereby it believes its competence is being judged on whether it can build a nuclear power plant. It seems determined to build a nuclear power plant whatever the cost, and this step puts off reality for a while longer.

Yet from another perspective, this is not leadership or good governance. Situations change and Government’s have to be able to change their decisions. Government’s generally equate being in control and strong with not saying sorry and not having to change their minds. But at some point, if what they are doing is so completely against all the facts at their disposal, they seem even less governmental by their intransigence – and of course as ever it is society which picks up the tab. That £2 billion could go to setting up a revolving fund of 0% loans for domestic building upgrades; for communities and local energy markets; for public transport; for an electric vehicle charging system, probably an interconnector to Iceland!

This decision is energy politics. Governments should take decisions based on widely agreed evidence, following discussions held in an open and legitimate manner. Decisions should be taken in a flexible manner and open to change in changing circumstances. Many countries manage to do this. We in Britain need to understand why Britain has the attitude it has to governance and explore how we can alter it so that our Governments in Britain make decisions with a broad, informed, societal agreement.