If you are an observer of energy policy over time things have a habit of repeating themselves. I suppose this is the same for any area of human endeavour but it seems ever more recurrent in our particular patch. It only seems like yesterday that former Energy Minister Charles Hendry was talking about “the uncertainty paradox”. What he meant by that was that you needed a period of uncertainty in order to have certainty. For an industry founded on major infrastructure investment it is that bit of uncertainty that causes the pain. What is more it doesn’t seem to be going away. This is now official. If you wait long enough you will hear the same thing twice.
This came last week as we heard our new Energy Minister John Hayes address a distinguished gathering of the energy industry. Whilst his words were subject to the Chatham House rule something of the flavour can be shared. As one would expect of the philosopher Energy Minister a great thinker of the past was at his disposal for illustration. He ushers up these worthy minds of ancient time like a magician pulls out cards. They certainly add a patina to his deliberation. So who was the candidate to illustrate his latest erudition? Of course none other than the philosopher king of uncertainty Socrates. He who said that “true wisdom comes to each of us when we realise how little we understand about life, ourselves, and the world around us”. In the context of energy he said this meant that the only thing we knew for certain is that we don't know our energy future. Knowing we don’t know is, I suppose better than not knowing we don’t know. I shall be careful here to avoid treading any further into Donald Rumsfield territory! However the Greek philosopher went a bit further in other sayings. Something I will return to.
With Mr Hendry’s “paradox” we were at least assured of some glimmer of certainty at the end of the policy tunnel. Certainly Mr Hayes believes in a balanced energy policy. The Energy Bill is the means to deliver on the challenges we face. Chiefly investment in time to deliver energy security that is sustainable. Primarily through the tool of Contracts for Difference –which assures the funding of infrastructure renewal and a capacity mechanism which delivers security through diversity of supply. Where does carbon reduction play in all this? Mr Hayes said it was the background against which all this was “contextualised”. However, the key political drivers appear to be security delivered in a cost effective way. He also raised the critical importance of demand response as a component of this balanced approach. This can only be delivered through a smart grid and essential to that are the kinds of smarter network developments that ENA members are currently devising in the multitude of projects under the Low Carbon Networks Fund.
We are weeks away from hearing the fruits of the Government’s considered journey to a heat policy announcement. Something that ENA has made a major contribution to through our Domestic Heat Report produced by Delta-ee and published last October. Here again there is uncertainty about precisely what the future will hold in terms of choices for the public and the decisions they make in the face of these. It is welcome that the Government are addressing this. The Bulletin raised it with Mr Hayes. Whilst he is not responsible for the heat policy, that is Greg Barker’s responsibility (he launched our Report last year), but it has clear implications for the networks infrastructure, which is Mr Hayes area of responsibility. It is pleasing to hear that he has been consulted on it. It is also pleasing that he understand the critical importance of carrying the public with them on the issue. With gas fired central heating a reality for over 80% of the UK population that would be wise.
Interestingly the issue of hearts and minds was taken up this week by the man who raised the “uncertainty paradox”. Charles Hendry was writing in Dods politics. Mr Hayes has said that he was more interested in reducing carbon than in how it was done. He is not fixated on the kinds of technology whether renewable or otherwise. However his predecessor would beg to differ. He said this week that renewable energy had to be a key part of our future energy mix. However he said “we need to continue with measures which will win public support for renewables”. Many might say that Mr Hendry laid down a subtle challenge to the onshore wind sceptic Mr Hayes by setting out its case before the public. In onshore wind he said, “it has to be right that communities are being given more say over planning issues. But in turn, those communities which do decide to approve them should receive much more evident benefits”. He added that this was why “as a minister I put so much focus on enhanced community benefits, moving England closer to the position in Scotland, where the community benefits are much more evident”. Mr Hendry concluded that the UK is facing an energy crunch. No one would know this better than he. He said “we need a mix of new generation capacity and we need it soon”. He concluded that alongside nuclear and gas, “we have resources that can be harnessed, both onshore and offshore”. He said the “careful path that government is treading” was “to ensure that it is done in the way that commands public support and keeps down the impact on bills”. His intervention was particularly apt this week as we learned that he will be standing down from Parliament at the next election. His energy savvy will be missed but in the meantime ENA encourages him to keep banging the drum!
So we have what some would say were the contrasting views of our current and previous Energy Minister. In many ways they reflected the uncertainty they acknowledged in these very differences. However returning to Socrates I said he went further than just acknowledging how little we know. He also said “the only true wisdom is in knowing you know nothing”. A depressing thought when we feel we have travelled so far already.