The UK government is suddenly showing signs that it gets it


The last big energy announcement by the UK government was that it was committing UK consumers to paying £92.50/MWh for 30 years for energy from a 3.2GW nuclear reactor at Hinkley Point C. 
Orwellian double-think allowed the government to badly claim that the construction of the plant is 'subsidy-free', despite the fact that the guaranteed price is higher than the current cost of electricity by a factor of more than two times.

Of course it will be subsidy-free if it never gets completed, and it's already showing signs of following that well-worn path of over-promising and under-delivery trodden by new nuclear in Flamanville in France (six years late, three times over budget) and Okkioko 3 in Finland (ten years late, three times over budget).

The major announcement on energy policy before that one was news of the closure of the disastrous Green Deal energy efficiency programme. Launched two years earlier with great fanfare, the Green Deal was going to transform the energy efficiency of our building stock. At withdrawal only 15,000 homes had received finance.

This government's record on energy has been incompetent to the point of derision or despair, depending on how much you care about it.

But suddenly, a ray of sunshine emerges from Greg Clarke's Department of Business, Energy and Industrial Strategy (BEIS). Greg wants to unleash the power of the market on our broken energy system.

But this isn't just the same old, same old rhetoric exhorting consumers switch from one of the much-maligned big energy suppliers to another. No, Greg is talking about nothing less than the coming revolution in energy, one that has become evident to many of us working in the renewables sector, but has until now been just a little too far over the horizon for the politicians to 'get'.

A combination of key technologies - solar, wind, and energy storage coupled with a real-time energy market driven by information technology are maturing and the impact will be extraordinary.

Solar panels and wind turbines have a complementary output profile and a combination of both will even out seasonal energy production in northern climates such as the UK. Energy will be stored in and released from large batteries - including those in electric vehicles - to meet shorter term peaks in demand and troughs in supply. Real-time electricity pricing will allow internet enabled appliances to turn on or regulate down following pricing signals to smooth out demand to better match supply.

What we're looking at is a fundamental shift from an energy system based on resources to one founded on technology. Our current energy system has been built on extracting resources (coal, gas, oil) from the planet's crust and setting fire to them. The energy system of the near future will be based on technology that converts the energy derived from the sun (daylight and wind) into electricity.

The key point is that whereas natural resources get more expensive as you use more of them, technology becomes ever cheaper and more efficient. The inflexion point is coming and it's now no longer a question of whether the oil age will end, but how soon it will come.

Electrification will be the future. Electrification of ground transport and electrification of heating. Recent announcements by car makers such as Volvo and Volkswagen and governments such as France and Britain presage the end of the internal combustion engine for mass transportation. The Committee on Climate Change predicts the need to install millions of heat pumps for heating to meet UK emissions targets, but we may instead be looking at simple resistive heating like immersion heaters and storage heaters, which can operate with more flexible timing to take advantage of the lowest priced electricity - whenever in the day it might occur.  Either way, heating is also going electric.

Previous predictions of the end of oil were short of the mark, because they underestimated humankind's capacity for innovation - finding ingenious and cheap ways to get at those difficult to extract deposits. The end of the oil era will come about because of that same innovation, as wind, solar and energy storage technologies become ever more cost competitive.

Donald Trump's withdrawal of the US from the Paris agreement will be seen as a futile gesture. King Canute trying to turn back the tide. There's going to be a tremendous amount of solar and wind installed in the US, not because of government intervention, but because the market will decide that it is simply the most cost effective and efficient way to provide energy.

So, two cheers for Greg Clarke, it looks like he’s got the vision, competent implementation to support a smart grid will now be the key to the UK taking advantage of the coming energy revolution