Energy Crunch: the good news and the bad news
Three things you shouldn't miss this week
- Jumpers, petitions and the only way to tackle rising energy bills - Why only energy efficiency and the long haul towards decarbonisation can tackle rising energy bills, and everything else is a sideshow.
- New Thinking Blog: The Nuclear Announcement - a Pyrrhic victory? - New nuclear not a done deal as UK awaits EU decision on State Aid.
- Chart of the week: The significant portion of global fossil fuels which must remain unburned to meet climate targets.
Source: Fossil fuel assets at risk - Ceres/Carbontracker
The good news is that Britain’s politicians and media are finally giving energy the attention it deserves. The bad is that the frenzied political back-and-forth of the last few weeks utterly fails to grasp the intractability of rising energy costs.
No amount of political point scoring can mask the impact of resource depletion, increased global energy demand and rising carbon emissions; nor the urgent need to increase efficiency and reduce our reliance on fossil fuels. Yet these points are scarcely heard - instead we are treated to an infantile row about whether it is OK to recommend wearing a jumper.
The apparent inevitability of rising energy prices was underscored last week when the government announced the go-ahead for the first British nuclear plant since 1995. To clinch the deal it had to guarantee French owned energy giant EDF twice the current wholesale power price, index linked, for 35 years.
So it seems politicians are happy to commit to high priced nuclear power, but not renewable energy. Pressure is now on to reduce ‘green taxes’ - though as we highlighted last time these account for less than 5% of the total average bill - and the government looks increasingly poised to move such charges from energy bills to general taxation. This might seem to lighten the burden on the poorest, but any benefit of such a one-off cut could well prove short lived if it is swallowed by the next rise in wholesale energy prices.
The annual competition enquiry announced by Energy Secretary Ed Davey may put additional pressure on the big six, but will have no impact on the real problem here: the international gas market. The need to reduce our dependence on imported gas could soon be underscored by a renewed outbreak of the ongoing tension between Russia and Ukraine that has twice disrupted supplies to Europe in recent years; Ukraine is behind with its bills, and Russia threatening to force it to pay for gas in advance.
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