UK Energy: The Challenges Ahead
By Professor Martin Fry
Energy is key to the future of civilisation and has been a major factor driving our development. Energy supply and use has, of course, changed dramatically over the last century and even more so, on the demand side in recent decades, with the advent of computer technology and everything related to it.
Unsurprisingly, the long-term supply of fossil fuel resources is limited, as is the case with all resources on our planet. That has led us to developing other resources, particularly for electricity, in terms of nuclear power and renewables. ‘Us’ in this instance, refers to large parts of the world, with different degrees of resource and uptake. In Canada, for instance, the topography allows a large input of hydroelectric power, which one might say is good for the Canadians. In France, the culture is to go for nuclear power, which dominates electricity supply. The UK is among the first countries in the world to use nuclear power but we don’t have that much nuclear supply; capacity is shrinking due to aging plant closures. Construction of new nuclear facilities takes years to debate because of opposition to this form of energy in the UK and progress is very slow. Even with some renewables, such as wind, the debate goes round and round along the lines of ‘Yes it’s good, but not in my backyard’.
With respect to oil and gas supply, there have been lively peak oil and fracking debates. Oil has fewer reserves but is quite challenging to replace, for example, in the area of transportation. The peak oil debate centres around supply failing to meet growing demand. As I write this article, we have experienced over supply and very low prices at a time when peak oil is not considered very far away. Experts, however, will say that this is only to do with market manipulation and prices will rocket by the end of 2015. Gas is the cleanest fossil fuel, but UK supply from the North Sea is running low. So fracking comes along - but again, the general UK take on this is ‘Not in my backyard’. Coal is of course the greatest resource but by far the dirtiest. We have largely moved away from it in the UK, but many other countries still depend upon coal energy. The basic message is that we need to start to move away from fossil fuels because their long-term supply is limited. This brings us on to the other supply side dimension – climate change and the need to reduce carbon emissions. It gives us another push away from fossil fuels and towards nuclear and renewables. But here we have another circular debate: is climate change down to mankind and the increase in carbon emissions we cause, or would it be happening anyway? We now have the recently formed Global Warming Policy Forum whose job is very much to advocate the latter view and keep the debate going.
Let’s stop the endless debate! Surely, the bottom line is the same? Whether we worry about climate change and having to reduce fossil fuel use, or whether we worry about finite fossil fuel reserves and having to conserve them as a vital long term resource, the action is the same. While we can debate the finer details we must significantly reduce fossil fuel use.
The Demand Side
Now we come to the other side of the story. All of the above is only due to demand. We must have energy and, like water, we just take it for granted and pay the bills. Wastage is all around us, in our homes and our daily lives. I commute to and from City University London on the train and at several stations I pass through on a sunny day, all of the lights are on and you have to look carefully to see that because the background sunlight is so bright. How much do daylight sensors cost? That said, many homeowners, businesses and our University itself, are very committed to managing energy and avoiding waste. Whether the driver is minimising carbon emissions for the good of the planet, or just saving money, the result is the same.
But the bottom line is that overall, we are very wasteful and this drives the supply side to construct new plants to service wastage. In the Energy Efficiency Deployment Office strategy dated November 2012, Edward Davy, Secretary of State for Energy and Climate Change, said that by 2020, we could have the potential to save 22 power stations worth of energy through socially cost-effective investment in energy efficiency. And yet the pressure is still on the supply side to get on with more construction, there is no way we will change our culture such that energy wastage is socially unacceptable. As it is in some cities such as Stockholm, Sweden, driving a four-wheel vehicle is socially unacceptable. If someone suggested that it was unacceptable to drive such a car in a UK city, you could imagine the reaction!
In reality, it is not that clear cut. Those in the energy demand management discipline and industry will tell you that engagement with the discipline is slowly becoming more embedded in business culture. The challenge remains, that in a commercial enterprise, energy costs may be only two or three percent of operating costs. So a 10% saving is not much in relation to turnover. But if the energy bill is £200k, it is not insignificant in absolute terms. For large energy users, like supermarkets or energy intensive industries with bills going into hundreds of millions of pounds, there is commitment and minimal wastage.
We are gradually moving in the right direction in terms of minimising energy wastage and avoiding pressure on the supply side to construct new plants to service wastage. But to effect the culture change, we need to stop the circular debate on climate change and ‘No wind farm in my backyard’. If you don’t want it, or fracking or a nearby nuclear plant, what are you doing in your home and business to eliminate wastage? What are your suggestions?We have new developments in recent times. I helped to write ISO 50001, the international standard on energy management. This is becoming part of business and public sector culture, like the environmental management standard ISO 14001.
We also have the EU Energy Efficiency Directive, Article 8 of which mandates energy audits for all private sector non-Small and Medium Enterprises (SMEs). In the UK, this is interpreted as the Energy Savings Opportunities Scheme, ESOS. Again, I was involved in writing the audits standards and can see the benefit that ESOS can bring in making energy saving opportunities more visible and part of the culture, in the eyes of senior management.
The ultimate bottom line is probably that we need a global champion to drive home the message that wastage is outside the culture of the modern world. Understanding use and waste avoidance should be part of the wider education process.
And did someone mention water?
Energy demand management, also known as demand side management (DSM), is the modification of consumer demand for energy through various methods such as financial incentives and education. Usually, the goal of demand side management is to encourage the consumer to use less energy during peak hours, or to move the time of energy use to off-peak times such as nighttime and weekends. Peak demand management does not necessarily decrease total energy consumption, but could be expected to reduce the need for investments in networks and/or power plants for meeting peak demands. An example is the use of energy storage units to store energy during off-peak hours and discharge them during peak hours. The term DSM was coined following the time of the 1973 energy crisis and 1979 energy crisis. Demand Side Management was introduced publicly by Electric Power Research Institute (EPRI) in the 1980s. Nowadays, DSM technologies become increasingly feasible due to the integration of information and communications technology and power system, resulting in a new term: Smart Grid.