A Revved-up Energy Policy

A few weeks ago I mentioned that I’d been asked to write an article about what Labour’s energy policy should look like in 2015.  You can read the article on Progress’s website.

I’ve had a great response since it has been published (with people even telling me that I’ve made energy policy sound exciting!), so I thought I’d also publish the longer version of the article here.  It’s an earlier draft, so not quite as well edited, but gives a tiny bit more detail for anyone who’s interested.

Labour needs a Revved-up Energy Policy

By 2015, the government is hoping that the UK will be a much rosier place.  They dream that the worse of the cuts will have been made and global economies will have improved. But couple that with their current heel-dragging over energy policy, and their rosy dream will be rapidly heading towards a new nightmare.

Because experts are predicting that oil prices will spike around 2014/2015, as the oil reserves built up by OPEC during the recession get used up.  While many households are stretched by the current $100 a barrel price of oil, by 2015, prices could be heading towards $185. Without new and drastic action to reduce our reliance upon oil before then, such a huge hike would make heating and lighting homes difficult and put transport out of reach for many, as well as driving food prices skywards and putting whole sectors of the UK economy under unbearable pressure.  Suddenly energy policy will no longer be a boring issue for the anoraks but a matter of social justice at the heart of our concerns.

Looking towards Labour’s policies for 2015 then, an energy policy that tweaks our current set up, substituting one form of energy for another, hoping we’ll use a little less just won’t cut it when people will be choosing between getting to work or heating their homes.  Nor will being modest about the scale of the challenge ahead help us convince people that Labour has a plan for a brighter new future. Going into the next election, Labour’s energy policy has to be huge and ambitious.  It has to underpin everything we say and plan to do.  And it has to inspire a generation.

So what would such a revved-up energy policy look like?  Firstly, we will have to face up to the immediate problem of prices, offering help to the poorest families, breaking the big-six’s stranglehold on the domestic market to open up competition and drive down bills for everyone else. Coupled to that, we should also have a very clear idea about how we will help households cope in the longer term – the idea of the no-bill or low-bill home (a house that is insulated and generates its own energy, such that it has little or no reliance on external energy supplies) is compelling, simple and ambitious.

Secondly, we need plans to renew our energy infrastructure. And that doesn’t mean replacing a couple of coal-fired power stations with a nuclear one, but a serious, wholesale re-think and upgrade of the way we generate and distribute energy.  We cannot afford to base the new economy upon wasteful and outdated energy infrastructure, built for an industrial era.  When energy was ‘too cheap to meter’ it made sense to build a network around a handful of big, remote power stations, but it’s incredibly wasteful – a shocking 65% of energy going into the system is lost as heat in generation and transmission.  Today we need a new, more efficient network, where energy is produced nearer to where it is needed, where heat isn’t wasted by used to heat homes and offices, where smaller, community scale renewable generation is accommodated and where gaps in renewable supplies can be smoothed out by being part of a European Supergrid.

Thirdly, our policy needs to change the relationship that citizens have with energy.  I’ve argued elsewhere that this is like the changes in home ownership in the 1970s and 1980s that helped modernize our housing stock. Introducing a ‘community dividend’ so that communities can ‘own’ a stake in energy production and ensuring feed-in-tariffs continue to work for community and cooperative scale energy projects could enable communities to share in the profits and help tackle fuel poverty. But, more importantly, just as home owners make decisions about their homes for reasons not just financial, a community stake could also help change the role and perspective of energy companies – taking their long-term responsibilities for the energy infrastructure, their charging structures and their impact on the environment more seriously.

Finally we need large-scale investment in research, development, demonstration and roll-out of low carbon technologies, to help drive down the price of renewables. While the current Tory-led coalition government is cutting the UK’s R&D budget, the United States has promised $17 billion, with China, France and Germany outlining similarly ambitious plans.  At the same time, it is becoming increasingly clear that with the twin pressures of energy security and climate change, the country to move to a low-carbon energy system first will not only secure their energy future, but their global competitiveness too.

It might all sound expensive, but in the run up to the next election we have to argue that missing the jobs this investment will create and loosing our in the global marketplace will be condemning the UK to an insecure and economically vulnerable future – an even bigger price to pay.


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