UK Energy Security
A War-Footing
The UK needs to approach the energy crisis with the zeal and drive of a war effort. Because we are at war, on two fronts; the first is our dependency on fossil fuels from unpredictable nations like Russia and Saudi Arabia, the second is the impending climate crisis. We may judge the former to be more pressing but unless the conflict with Russia escalates into WW3, the latter will have long-term consequences even more devastating to the UK than the current invasion of Ukraine. Yet, when we deploy the logistics and people needed to address even seemingly overwhelming challenges, we know we are capable of stepping up to the plate, our successful NHS COVID vaccine role-out proved that.
So what is to be done? First we must recognise that even in peacetime, the privatisation of energy supplies has failed. It has failed because of serious flaws in the free-market model. Public utilities like energy are too important to the nation to be left outside government control, and their mission must be economic continuity of supply rather than maximising shareholder dividends or executive remuneration. Regulation is an anathema to any free-market enterprise but without the heavy-hand of the energy regulator and occasionally even government intervention, energy prices would result in even more severe fuel poverty for the population and excessive costs to industry. Yet during times of shortage, we currently export gas to maximise profits and shareholder value. And when shortages result in demand outstripping supply, prices are allowed to rocket, making huge profits despite attempts at price regulation. None of this is in the national interest but why should it be? The energy companies are doing precisely what they’re designed to do.
At the time of writing, we are living through the logical outcome of privatised energy, rocketing costs to consumers, deep concerns of continuity of supply, profiteering by energy companies, and the inability to focus on the looming disaster that is the climate emergency. And that is without going into all the issues surrounding ‘billing’ companies that add tiers of cost to consumers whilst adding zero value to the same gas and the same electricity.
But nationalisation on its own isn’t enough. We also need to wean ourselves off the fossil fuels we import from other nations and develop our own, secure, energy supplies. Fortunately we are an island nation with abundant natural energy all around us but we need to harvest that energy with the same zeal our ‘Land Army’ fed the nation during WW2. We need a coordinated effort to source the necessary raw materials, manufacture and implement tidal, wind, solar, wave, and geothermal systems along with the necessary logistics and project management, and we need it urgently. Incentives need to be given for domestic generation, and the installation home insulation must be given without charge where it is needed, both of which to lower the demand on our energy grids.
Then there’s nuclear power, and in recent weeks we’ve witnessed how our worst fears of the weaponisation of nuclear plants could transpire. Russian artillery attacks on at least two Ukrainian plants demonstrated the sinister prospect of them being transformed into huge ‘dirty-bombs’ capable of spreading radioactive materials over vast areas. However bombproof we attempt to make these plants, there will always be an enemy missile powerful enough to breach them. And the devastation of a strike would not be limited to horrific casualties; it would also engulf our resources attempting to clean up afterwards. In addition to the potential threat to plants, there could also be disruption to our supplies of uranium. We currently source these from the current ex-Soviet countries like Kazakhstan and Ukraine, but even if we sourced from further afield, we would still be vulnerable to attacks on shipping. We may not require vast quantities of uranium and we may in the future have the technology to source our own, but today and in the near future nuclear contains its own unique risks.
Is there time to address all these issues? Bluntly no, there isn’t time to do all this in order to avert existing pressures on the cost and supply of energy, our security of a continuous supply, or the accumulating damage to our climate. And there certainly isn’t time to develop and build new nuclear sites that utilise secure alternatives to uranium. Nor is there the time to implement fracking for shale gas on a large enough scale, even if we were to ignore the hugely negative impact it would have on our second front – fighting climate disaster. However, we can still utilise our existing sources including ‘sunk’ investment in new nuclear plants near completion and we really have no alternative but to do so during the implementation of alternative systems. In a perfect world, we’d avoid bringing more nuclear sites into operation but sadly this isn’t a perfect world. And we must ensure that we are fully connected and able to buy and sell energy with our neighbours in mainland Europe. Across such a vast area there will always be excesses in supply and demand, we must be a part of that network even if that requires a re-modelling of our relationship with the European Union, it is in our own self-interest as well as that of the EU member states.
The above picture may appear extremely gloomy but there is a very sunny outlook.
Reliance upon alternatives will mean reliance upon virtually no fossil fuels other than for lubrication.
The transformation of Britain must include an accelerated transition to electric vehicles (EVs). Transport, in addition to heating, is the main consumer of the fossil fuels we currently source from hostile or potentially hostile countries.
To accomplish this transition, greater emphasis must be made on addressing the current inhibitors that prevent people from changing to EVs, including the distribution and availability of public charging points, as well as the cost and supply of EVs.
Multiple types of plug-in cables and the ownership model of charging points frustrate the ability of EV drivers needing to charge their vehicles. A single, standard plug-in cable must be adopted, there isn’t time to leave this to market forces as was the case with VHS/Betamax video cassettes. And once the connections are standard, every EV must be able to charge at every charging point, irrespective of their choice of payment account, much as a bank cash machine can accept any bank or credit card to withdraw cash. The affordability of EVs can be improved by government assistance in the stock-piling of critical raw materials, such as lithium for batteries (we already have a lithium mine in Cornwall), and the provision of low or zero interest government backed finance to the automotive industry and consumers specifically for the production and purchase of EVs.
The cost and source of funding is typically used as an argument for delay but in wartime, we must do whatever is necessary to win and there are ways to ease the financial pain of transition. As during past conflicts, government investment bonds can offset the capital requirements as well as the decreased fossil fuel tax revenues. Investors seeking long-term, secure returns for individuals as well as pension funds for our aging population always welcome such financial vehicles.
Pre-nationalisation a windfall tax on the profits of energy companies will benefit the exchequer as well as resetting their share value, hence the price of subsequent nationalisation. Thereafter the cost of production and distribution, rather than the market, will alone set the prices of energy to the consumer and industry. Today a shortfall in the supply of gas is creating a price escalation from all energy suppliers. Even those electricity suppliers that claim to be using 100% renewable energy are increasing prices when their costs haven’t increased at all. The ‘acid test’ is the huge profit being declared by such companies. And not only will public energy be cheaper to supply, we need no longer pay the significant public subsidies to the fossil fuel industry currently funded by taxpayers.
The transition itself will match or exceed the industrial revolution in its impact on our society, creating tens of thousands of new jobs and sustainable economic growth. That growth will transform our economy by providing new tax revenues from our workforce and companies.
The goal will be total energy security with sources distributed all around our coastline and across our land, ending our vulnerability to attack and ensuring our continuity of supply forever. These sources will require no fossil or radioactive fuels and will turbo-charge our drive towards net-zero.
With domestic and industrial energy costs slashed, inflation in our economy will plummet. Not only will this dramatically assist household budgets and industry costs, but it will create a financial landscape in which the Bank of England can print money without the fear of inflationary damage. This money can further power long-term infrastructure projects and the sustainable Green revolution that will defeat our enemies on both fronts.
It is hard to imagine today, but think of a world with no petrol costs, miniscule home heating and energy costs, the colossal income streams of countries with regimes like Russia and Saudi Arabia dried up and our dependence upon them permanently severed. Best of all, think of how we would feel passing on our planet’s climate saved from the abyss to future generations.
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Pete Lihou's Blog 