In an open letter to the Government, business leaders, big energy companies, energy users, investors and suppliers – including Scottish Power’s chief corporate officer Keith Anderson – have today called for clear leadership and stable energy policies.
Other signatories to the letter include INEOS, which owns the Grangemouth petro-chemicals refinery and aims to be a major player in the UK shale gas industry – and renewable energy firms RES and Infinis.
The letter states:
The way we power our economy is being transformed. Building on the ambition of the recent Paris Agreement, much more of our energy will come from renewable and other lower-carbon sources. New technologies will also change how we store and use the power they provide.
This transition is being led by businesses, who have increased the UK’s use of renewable energy for our electricity supply from 11% to 25% in just three years. Companies are also investing to improve their energy efficiency, and to help consumers manage their electricity costs and reduce overall energy demand – installing smart meters in millions of homes across the UK.
But for business and household bill-payers, we need to make this transition while keeping costs affordable and our energy supply secure. UK industrial firms already pay higher electricity costs than EU competitors, and spare capacity on our grid is getting squeezed as we phase out older power stations.
Getting the investment we need to address this requires clear leadership and stable policy from government. We need more of this in 2016.
To unlock investment, we need a clear long-term framework – so companies can plan for construction projects that will last into the next decade. To ensure we are delivering new low carbon capacity at an affordable cost for consumers, we need to make sure the market is open to all technologies, including new onshore wind developments, where they have local support.
We also need to make sure we are investing in the capacity of UK supply chains to build on our expertise in existing and future technologies, from offshore wind to carbon capture and storage.
And to ensure the shift to more intermittent renewable energy doesn’t affect security of supply for homes and businesses, we need to look at how we use technologies to help store electricity and manage peak-time demand, and support the development of new gas and nuclear capacity to help underpin our power grid.
Finally, we also need an overhaul of complex regulations holding back investment in energy efficiency – so that the best intentions to support firms to reduce their energy use and carbon impact are not lost in bureaucratic ‘green tape’.
List of signatories:
Aggregate Industries– François Pétry, CEO
Amec Foster Wheeler – Ian McHoul, Interim Chief Executive
Andrew Scott – Mark Bowen, Managing Director
Aviva – Sir Adrian Montague CBE, Chairman
Bam Nuttall – Stephen Fox CBE, Chief Executive
Bio Group – Steve Sharratt OBE, Group Chief Executive
BOC – Sue Johnston, Managing Director, BOC UK, Ireland and Africa
Carillion – Richard Howson, Chief Executive
CBI – Carolyn Fairbairn, Director-General
GE – Mark Elborne, President & CEO, GE UK & Ireland
Infinis – Eric Machiels, Chief Executive
INEOS – Tom Crotty, Group Director
Intu Properties – Neil Sachdev, Non-Executive Director
Keen Venture Partners – Ben Verwaayen, KBE, Founding Partner and Chair of CBI Energy and Climate Change Board
Lloyds Banking Group – Tim Hinton, MD, Mid Markets & SME Banking
Renewable Energy Systems – Gavin McAlpine, Chairman
Scottish Power – Keith Anderson, Chief Corporate Officer
Tata Steel – Karl Koehler, Chief Executive Officer
Veolia – Estelle Brachlianoff, Senior Executive Vice-President – UK & Ireland
Hector Grant, Chief Executive, the Scottish Energy Association, (left) added: “Many of our member organisations have been advocating a long term energy policy for a number of years yet have seen considerable and regular disjointed changes to the relevant legislation.
“The Scottish Energy Association would support the call, on behalf of our members, for a stable energy policy so that proper planning and investment can be made, thus contributing to our future low carbon economy which will enable us to meet the obligations of the Paris Agreement.
“Our headline Power Scotland Conference in Glasgow on March 10 will discuss this and more as well as hearing from all five main Scottish political parties about their energy manifestos leading up to the Holyrood election in May.”
Amber Rudd, British Energy Minister, commented: “Old and dirty coal, and some ageing nuclear power plants, will be closing over the next few years, and that’s precisely why we’ve put in place a long-term plan to ensure we have secure, affordable and clean energy supplies that can be relied on now and in the future.
“We are the first country to propose an end date to using unabated coal and we will do so in a way that maintains energy security, which comes first. We are clear that a range of energy sources such as nuclear, offshore wind and shale gas all have roles to play in the low-carbon energy mix, powering our country and safeguarding our future economic security.”
In response, the Renewable Energy Association said that the most cost effective renewables, combined with energy storage should be given a level playing field to best compete.
A spokesman for the REA – the largest renewables trade body in the UK – said: “This crisis is the clear product of a lack of vision in energy policy. Technologies are here now that can supply this country’s power needs in a low-carbon, low cost way and can be rapidly deployed, including solar PV, wind, and energy storage.
“Gas and wholesale electricity prices are too low to incentivise new building and we may find ourselves in a situation this year where the government is subsidising nuclear, gas, and diesel while actively creates barriers to the deployment of the most cost effective renewables.
“We’re advocating for a level playing field. A recent REA/KPMG report outlined that a more decentralised energy system will lower costs to consumers and increase our energy security.
Meanwhile, following the report by the Institution of Mechanical Engineers, which states that UK Govt. plans to close coal-fired plants by 2025 could result in demand outstripping supply by up to 40%, Tanuja Randery, President UK & Ireland, at Schneider Electric, commented:
“The energy conundrum will only be cracked when we adopt a smarter approach to the way we generate, consume and store energy.
“Closing coal fired power stations is a step in the right direction if we are to meet our carbon reduction targets. But, doing so without clear plans for more sustainable alternatives will not address the issues of energy demand effectively.
“Investment in renewable energy and further development in energy storage must become a priority, if we are to avoid energy shortages. Just 9.5% of the UK’s electricity was generated by on and offshore wind in 2014, however much more green energy production is possible.
“The government needs to take a robust approach to ensure that the lights stay on while we decarbonise. It needs to consider the UK’s provisioning of reserve capacity, combined with active network management and integrating renewables into the grid. This multi-faceted approach must not ignore the ‘fifth fuel’ – energy efficiency.
“In the long term, there must be a continued focus on creating a system that uses less energy and gains more power from renewable sources.”