FoE’s Robin Webster: “useless”Micro-generation suddenly looks a better bet in the UK after an official report painted a dismal picture of insecure energy supplies and yo-yo prices over the next decade.
In a tacit admission that the private sector and the national grid are failing to deliver energy security, the study by UK energy regulator Ofgem predicts that consumers could face price volatility with energy price spikes of up to 60 per cent within the next 7 years. The regulator said an investment of up to £200bn in power plants and other infrastructure will be needed over the next ten years to secure supplies and meet carbon reduction goals.
“Our scenarios suggest that Britain faces a tough challenge in maintaining secure supplies while at the same time meeting its climate change targets,” said Ofgem chief executive Alistair Buchanan.
The study which has been positioned as a ‘consultation document,’ predicts that the UK will use no oil whatsoever in the generation of electricity by 2020 and that reliance on nuclear power will fall substantially over the period.
There will be a major role for on-grid wind power. UK Generating capacity will expand from 5208 MW in 2010 to as much as 34,000 MW or 32% of output by 2025. But Ofgem suggests that the role of renewable energy apart from wind will be minor. It estimates that non-wind renewables –hydro, solar and tidal, will account for only 7% of generating capacity at best by 2025.
Environmental groups accused Ofgem of complacency over its belief in markets and failure to promote cleaner energy sources.
Friends of the Earth’s energy campaigner Robin Webster said: “Ofgem’s review is further evidence that failing to take urgent action to meet our climate change targets comes with an enormous price tag. Taking inadequate steps leaves us exposed to the unpredictable costs of dwindling fossil fuels – and saddled with the threat of global warming.
The report looked at four different energy scenarios based on high and low investment in renewable energy and high and low economic growth over the next fifteen years. It predicts that domestic energy bills will increase by between 14% and 25%, by 2020, while carbon emissions will drop by between 12% and 43%. Renewables will account for either 22% or 39% of electricity generation by 2025 says the report.
Critics of government energy policy say that lack of investment and clear strategy mean that the UK is now at the mercy of the market. “This has lead to ageing power stations not being replaced, a lack lustre approach to developing new technologies such as carbon capture and clean coal, and poor gas storage facilities, said David Hunter, energy analyst at. McKinnon & Clarke, the UK’s largest independent energy consultancy.
“The UK is not geared up to being an energy importer,” he added. “Now with limited generation capabilities and only three weeks of gas storage capability, compared to Germany’s four months, Britain is in a very weak position when it comes to competing for energy on the global market. This has a direct impact on prices.”