Seven energy events that surprised us in 2013
Political panics about consumer energy bills, anti-fracking protests, energy company profits and a new nuclear power station built by the French: 2013 has been an interesting year for UK energy policy. Arguments about obscure government home insulation schemes, previously found on the business section, ended up on the front page.
Along the way, unexpected events occurred, while some long-cherished dreams failed to materialise. Here’s a few of the more interesting developments that surprised us in 2013.
1. Energy efficiency does not become the new scatter cushion
In January, the government launched its flagship programme for encouraging householders to improve the energy efficiency of their homes. The Green Deal would make insulating your loft and fixing up the boiler “the new scatter cushion” – a must-have for all forward thinking homes, energy minister Greg Barker announced.
It didn’t quite work out like that, however – at least not so far. Although more than 100,000 homes had been assessed under the scheme by the end of October, just 813 households had taken up the offer to borrow money from the government to get improvements done – 0.6 per cent of the government’s target for the end of the year, according to thinktank IPPR.
The government attempted to fix some issues with the scheme in December, but there’s still a way to go. Maybe scatter cushions are just too 1990s, Greg.
2. Fade to black
In February, the outgoing head of energy regulator Ofgem gave everyone something to worry about. He warned of a crunch in the UK’s power supplies over the next few years, as old coal power stations are shut down and new renewables and nuclear power have yet to come online.
Apocalyptic predictions of power blackouts appeared on a rolling basis on the front pages of the nation’s newspapers throughout the year. Network operator National Grid says the crunch doesn’t mean there will be blackouts – but that doesn’t make such a good headline.
And despite the National Grid’s reassurances, the future may not be all rosy. Some businesses could be subject to energy rationing – and tight supplies may drive up energy prices further.
3. Shale gas starts to shake the rectory walls
Since the middle of 2011, various media outlets and commentators had been extolling the virtues of a potential new indigenous power source – shale gas. In June, the British Geological Survey confirmed the north of England has a shale gas resource of 1,300 trillion cubic feet – which is a lot.
But in the summer, the nascent industry hit a problem: the home counties. Protests against fracking – the controversial process used to extract shale gas – erupted in a quiet outpost of East Sussex. Energy company Cuadrilla was actually looking for shale oil in the village Balcombe, not shale gas, and had not yet done any fracking. But it didn’t seem to matter. The ‘Battle of Balcombe’ woke politicians up to the prospect that someone might start fracking for shale gas in their constituency.
The possibility of a shale gas well at the end of the drive could prove a bit of a downer for enthusiastic proponents of the technology living in the south of England. At a private meeting energy minister Michael Fallon noticed this – memorably remarking that the government is going to “see how thick their rectory walls are”.
The rectory walls are likely to shake some more over the coming years – as the government’s pressing ahead with developing the industry, in the south-east and elsewhere.
4. Energy bills going up? Get rid of your energy saving measures
Then in October, Labour leader Ed Miliband changed everything (and that’s not a sentence you read every day). By promising to impose a temporary freeze on energy bills if elected, Miliband tapped into widespread consumer concern about the rising cost of energy and prompted a big political row.
Suddenly, everyone wanted to know what exactly was driving energy bills up. Was it excess energy company profits? The so-called ‘green taxes‘, which account for nine per cent of an average bill? Or increased costs of supplying energy through the energy network?
The energy companies unanimously blamed ten per cent rises in bills on the cost of ‘green subsidies’ – or more specifically a home insulation programme known as the Energy Company Obligation (ECO).
The government responded by weakening ECO. Which, rather bizarrely, meant its main response to concern about rising bills was to cut a measure that was meant to help poorer households reduce their bills. Ah, well.
5. New nuclear? Mais Oui! æ?¯ç?? !
An important linguistic distinction came to the fore in 2013. The government is very clear that it opposes subsidies for nuclear power. ‘Support’ for new nuclear power stations, is totally fine, however.
Following an extended negotiation period, it agreed to pay £92.50 per megawatt hour of electricity for a new nuclear power station at Hinkley Point in Somerset. That’s more than twice the current wholesale price of electricity.
The UK government doesn’t want to build its own nuclear power stations. So the deal was struck with a consortium dominated by energy company EDF (85 per cent owned by the French government) and two companies owned by the Chinese government.
6. Good grief, we’ve got an energy bill
Perhaps we shouldn’t be too surprised by this one – but in December, the government finally voted through the energy bill, bringing to a close two years of politicking over the final product. Mind you, everyone was so knackered by then that by the time the vote happened no-one really noticed.
The bill is meant to facilitate the UK’s switch away from fossil fuels and toward a cleaner energy system – and was confirmed as the UK’s renewable electricity supply reached a record high. But after an extended political fight, legislation to set a target to decarbonise the power system was excluded from the bill, as were measures to limit emissions from old coal power stations.
7. Climate change? What?
In September, the Intergovernmental Panel on Climate Change (IPCC) released the latest edition of its five-yearly report into the impacts of climate change. Scientists are more sure than ever before that the earth is warming, snow and ice is melting, and sea levels are rising.
The IPCC report didn’t make a lot of difference to the UK debate, however. Everyone was too focused on the costs of energy to notice. Perhaps, in the end, that’s the least surprising development. As the renewables industry really starts to get into its stride, the low-carbon economy is starting to exist in practice rather than theory – and so arguments inevitably focus on what the change means for all of us.
But there’s always a new battle to come. Next year, chancellor George Osborne is likely to continue his attempts to water down the UK’s carbon-cutting ambitions. Government advisor the Committee on Climate Change is strenuously resisting the move, but this could be a long fight.
Bring on next year. We’re ready. Just so long as we can have a little sleep and turkey first.