Checking five claims in The Suns vision of Britains energy sector
The Sun has a vision of Britain – and it wants to share it with you. The paper today set out where it stands “on the issues vital to us, to you our readers and to Britain” – including energy. Its manifesto contains a number of claims about the country’s energy sector, but is it a vision we recognise?
1:”Just when Britain is relying more and more on technology, we’re facing an energy crisis.”
We assume the first part of the claim is referring to the fact that more people are plugging in smartphones, TVs and computers than ever before. But, perhaps counterintuitively, domestic electricity consumption has actually fallen slightly. And when temperature differences each year are taken into account, so has overall energy consumption.
The government aims to reduce energy use further through policies like the Green Deal and Energy Company Obligation. The policies are designed to help households make improvements such as installing loft insulation and replacing inefficient boilers – although the Green Deal has been criticised for its slow start.
It’s also debatable whether or not Britain really is facing an energy crisis.
Energy regulator Ofgem released a report earlier this year raising concerns that the UK’s power generation capacity was getting unsustainably low. But the chances of blackouts are still pretty small according to National Grid, which is charged with ensuring the lights don’t go out.
What’s more, the government’s proposed electricity market reforms aim to bring in £110 billion of investment in the energy sector over the next decade. So while the UK’s generation capacity may face a squeeze in the short term, we probably don’t have to start stockpiling candles just yet.
2: “It is incredible that viable power stations are being closed to fit in with EU directives on pollution, forcing us to rely more and more on imports.”
It’s true that Britain imports a lot of energy: 43 per cent of the UK’s energy supply was imported in 2012. And UK coal imports rose by almost 40 per cent in 2012 as cheap US coal pushed out more expensive gas imports. But is it right to say that closing power plants is to blame?
While the European Union’s Large Combustion Plant Directive means coal plants have to improve their nitrogen oxide and sulphur dioxide emissions or shut down, even if the plants were kept open they’d still probably be fuelled by imports.
The US currently has a surplus of coal flooding the European market due to its shale gas revolution, with cheap imports blamed for the recent closure of some British mines. The UK also imports a lot of gas, with 47 per cent of the UK’s gas supply coming through pipelines connected to Europe or transported as liquefied natural gas in 2012.
So like it or not, imports – whether of coal or gas – are going to fuel Britain for many years to come.
3: “Meanwhile Government ‘green’ policies have caused fuel bills to soar.”
Household energy bills are rising. Ofgem says the average dual fuel bill was £1,420 in July this year – about £100 more than a year ago. But while green policies form part of energy bills, other factors are also at play.
The level of future energy bills will largely depend on what happens to the wholesale price of gas. While energy companies expect them to stay stable, the government’s projections suggest they will continue to rise. So aside from reducing carbon emissions, an important justification of the government’s plans to decarbonise the energy system is the need to insulate Britain from the impacts of the volatile gas market.
Another key factor in what will happen to bills is whether energy efficiency policies pay off.
The government says measures designed to increase uptake of renewable power, nuclear and energy efficiency will add £286 to consumer energy bills by 2020. But its analysis also concludes that energy efficiency policies will help bring bills down again by an average £452 per household.
The government maintains that, overall, its green policies will bring bills down in the long run – with bills expected to be £166 lower in 2020 than they would be without the measures.
4: “But there is hope. Shale gas has launched an energy revolution in the States and could do the same here.”
The US is currently enjoying lower energy prices due to a rise in domestically-produced shale gas. But experts aren’t convinced the UK can replicate this – at least not in the foreseeable future.
Britain’s geology is more complex, it has more stringent regulations, and the public seems unsure about fracking if the current protests at Balcombe are anything to go by.
While the UK might have more shale gas than previously thought – a new estimate by the British Geological Survey suggests there’s 1,300 trillion cubic feet in the Bowland shale – not all of this will be extracted. While the US is able to extract around 10 per cent of its shale gas, experts aren’t sure the UK will be able to follow suit.
Finally, while shale gas does have some potential to reduce gas imports, we simply don’t know if it will be a domestic energy game changer. And we won’t find out until more exploration wells are drilled.
5. “We must get on with fracking. It could create huge numbers of jobs and power Britain cheaply for generations.”
Shale gas probably will contribute to the UK’s energy supply at some point, but a fully fledged UK shale gas industry isn’t imminent.
Even in an optimistic scenario for development, shale gas is unlikely to contribute to the UK’s energy sector until the 2020s, so it’s unlikely to have an impact on bills any time soon. Professor Paul Stevenson of Chatham House says it is “misleading and dangerous” to assume that gas prices will go down as a result of shale gas because it ignores the significant barriers to industry development.
Earlier this month, the Chancellor, George Osborne, proposed tax breaks to try and incentivise exploratory drilling. But those plans still have to be approved, and it’s too early to tell if they will stimulate a fracking boom.
Visionary
Key to The Sun’s assessment is the fact that it’s unencumbered by considerations such as the existence of the UK’s climate policies, like the Climate Change Act. The Sun calls for the continuation of a fossil fuel economy, but the government has a number of legally binding emissions targets to hit. That’s something it won’t manage if coal and gas are used to supply the majority of the UK’s energy needs in coming years.
So while Britain’s energy future may contain some of what The Sun hopes to see, it probably won’t be because policymakers wake up one day and realise there’s an imminent energy crisis that can only be solved by fracking.
The Sun’s vision of the UK’s energy sector – while strident – is a little confused.