Utility Week highlights an expert’s view of the dire state of the UK’s electricity network, largely driven by the climate dogmatism of government policies. Urgent action is advised, with Brexit in mind.
UK Business and Energy secretary Greg Clark needs to “reset the balance between the market and the state” and avoid “more patching up of what he has inherited”, [Professor] Dieter Helm has said.
The energy sector is “not in good shape,” and is unable to fulfil the needs of a major industrial economy, “especially for one doing Brexit”.
Growing electricity demand, as heat and energy are electrified, will make the “current capacity margin of roughly zero even more alarming than it is now”, the Oxford economist said in a paper.
Whilst demand side measures are appealing in the short term, “they don’t make a lot of sense for country aspiring to world competitive advantage”. The planned phase-out of coal-fired power stations, the diminishing lifespan of the existing nuclear fleet, and the repeated delays to new nuclear mean the problems faced by the new energy secretary are “all about to get worse – much worse”.
Helm criticized implementation energy policy in recent years, saying politicians had made a series of market inventions which had resulted in unintended consequences: “Onshore wind has had to be capped; offshore wind propped up; nuclear has required a special deal; and now gas needed a capacity market.” He described the present situation as “a lobbyist’s paradise”.
Britain has now “comprehensively re-nationalised its energy policy” according to Helm: “In many respects, Greg Clark has as much control as the Central Electricity Generating Board once had.” The current subsidy regime is not, as the government claims, technologically neutral. If it was, there would be “no offshore wind, and no Hinkley.”
Helm concluded by calling on Clark to develop a comprehensive energy policy, which clearly sets out “the principles, the overarching policies and the direction of travel”.
He urged the energy secretary to move quickly: “The current state of the energy sector is sufficiently serious to merit rapid action. He cannot engage in the luxury of reviews and reports. He needs to act.”