Overcoming the Energy Shortage

The last few days have seen renewed warnings about the UK’s impending energy crisis.

With the amount of spare generating capacity on the UK system set to fall from 15% to 5% in the next three years, there won’t be much margin for error if we want the lights to stay on.

The situation has arisen due to the slow pace of building new nuclear power stations, the phasing out of old coal ones, and opposition to wind farms. It will mean greater reliance on imported gas and more headaches for National Grid, which has to manage the increasingly complex network. 

According to the outgoing head of Ofgem, the UK needs an energy efficiency ‘’revolution’’ to overcome the crisis, such as widespread uptake of government’s home insulation programme.

Another crucial area will be cutting demand from UK businesses. 

A report by E.ON in 2012 revealed that only 1 in 10 SME employees take responsibility for energy efficiency in their workplace. Meanwhile the Carbon Trust has suggested that large UK businesses could save £1.6bn on their energy bills every year by paying greater attention to energy efficiency.

With the burden on the UK grid set to increase due to the growth of electric heating and electric vehicles, the need for a ‘’revolution’’ is no exaggeration.

And unlike the construction of nuclear power stations, a Carbon Capture & Storage network or offshore wind farms, energy efficiency improvements can be realised almost instantly. 

The government has announced that it will ‘’divert’’ £1 billion from new gas capacity projects to reduce demand.  

Under the scheme, companies could bid for this money in order to carry out large-scale energy efficiency projects which would otherwise be uneconomic.

This will not only help the UK to overcome the energy crisis but will also ensure that its businesses remain competitive in a globalised economy. As the Prime Minister himself said: ‘’it is the businesses that are best insulated from energy price shocks who will be the most successful’’.

While details of the scheme are set to be announced by DECC later this year, the recognition that the UK needs to reorient its focus onto demand side management should be strongly welcomed.

Businesses that fail to learn from each other and implement energy saving measures face disruptions to their supply chains and the risk of going bust.

 

Laurence Webb is Content Editor at amee. He holds an MSc in Environmental Technology from Imperial College London.

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