Outgoing Chief Executive of Ofgem, Alistair Buchanan, issued a stark warning yesterday one that should be taken seriously. However, when he reached his 769th word he began a sentence that hit the nub of alternatives to just burning more.
Demand is going to increase and there’s no use hiding away from the impending challenge of a shortage of energy with which to generate electricity. Energy Minister John Hayes said himself that Buchanan’s comments “came as no surprise”, his answer, however was to build more. There is no doubt that more generation is required and that unlike the decades ago when the plants being decommissioned were built, there are many more alternatives now. But this is not the only option and nor is seeking to exploit shale.
Buchanan rounded off his tale of woe in the Telegraph by suggesting another, “tapping energy demand reduction”. Energy efficiency is essential and if the Green Deal can achieve a boost to improve our leaky homes then that should be exploited by all who qualify. He highlighted this on the Today Programme more strongly saying that we “must focus on energy efficiency”. This was echoed by former Energy Minister Charles Hendry MP in his new role as President of National Energy Action later on the same radio programme when he advocated a “massive programme for energy efficiency in our homes”.
When looking at the need for new generation, Hendry also gave strong emphasis to the important task of “rebalancing that with cost to the consumer”. From his extensive knowledge of the industry and his close involvement in networks issues, he knows that the networks play a part in keeping those costs down.
If the roll-out of smart meters and the information from them is used effectively we can manage the need for new infrastructure more efficiently. Combine that with a concerted effort to deliver a fully integrated smart grid and innovation, such as demand side response, can deliver significant cost savings for consumers.
We’ve commissioned two reports, one by Imperial College and one by EA Technology Ltd showing in the region of £11-16bn of savings from the deployment of smart technologies. More generation, imports and shale are part of the solution but we shouldn’t focus on one approach to a challenge that is so multifaceted.