With around three-quarters of global carbon emissions coming from energy, climate change is an energy problem.
Here in the UK, the Energy Bill that the Government will shortly introduce to Parliament is a once-in-a-lifetime opportunity to create the cleaner, greener economy we need.
The proposals so far are mainly designed to encourage investment in large-scale low-carbon electricity generation using a combination of carrots (a new financial mechanism designed to give investors certainty) and sticks (a new emissions standard and a carbon tax). There are also proposals for a ‘capacity mechanism’ to ensure that our overall ability to generate electricity doesn’t fall short.
Fair enough, you might think. But in almost exclusively focussing on just building new centralised types of power plants the Bill risks making the job more difficult than it needs to be in the long run.
The government needs to be looking far more critically at the fundamentals of how our whole energy market, which has grown up around carbon-based electricity generation, works. New, innovative energy technologies offer a great opportunity to create a more intelligent energy market that allows us to fully capitalise on our abundant renewable resources and save money too.
The Bill needs to recognise the value of smaller-scale, decentralised forms of renewable generation, from domestic solar panels to community wind farms. We need a more dynamic system which relies less on centralised, fossil fuelled power plants, and makes the most of the renewables by developing them at a range of sizes. It needs to include a new electricity demand-management policy so that consumers can access goods and services to reduce their reliance on power from dirty electricity generation. The intermittent nature of renewable power is well known, and whilst suppliers like Good Energy have successfully learnt to manage that, the Bill could make it easier. One way of doing that is to ensure that consumers can access the kind of technologies and services that limit unnecessary power usage at certain times reducing the need for gas-fired back-up power plants.
The energy market we have now is focused on simply encouraging the production and consumption of the maximum amount of electricity at the cheapest possible price. The Energy Bill needs to help create a new market that will lead to energy suppliers becoming energy service companies, providing consumers with the tools they need– by providing cleaner electricity, helping manage future power demand, and using the latest technology to create a more flexible, intelligent and decentralised energy system.