Why Energy Bill success is vital for UK and Europe
After an awful lot of talk and almost as much delay, the UK government has finally published its Energy Bill.
Designed to kick-start investment in low carbon electricity generation, the Bill should at last provide investors with the clarity on British energy policy they have been craving.
Sitting alongside the government’s Gas Generation Strategy, which sets up a regulatory regime for the much-anticipated roll out of shale gas exploration, the Energy Bill makes the UK an attractive destination for power companies and investors alike.
Why? Because all forms of generation are in play. Yes, there is an emphasis on gas but frankly, there was always going to be. If, as the International Energy Agency states, we are entering a “golden age of gas”, why should the UK not embrace it?
Yet alongside gas there is a drive to put new nuclear on the British energy map, with both set to be complemented by a further push on renewables, particularly offshore wind.
Dr Claire Curtis-Thomas of the Institution of Gas Engineers & Managers said that “the decision to establish an office for the regulation and management of unconventional gas is to be welcomed. Shale deposits within the UK rival the largest in the world and offer the country the opportunity to be gas self sufficient for decades.”
Keith Parker, chief executive of the Nuclear Industry Association said “the Bill provides much needed investment certainty”, while Jeff Champman, chief executive of the Carbon Capture and Storage Associations said it would “give a good deal more confidence to those businesses that are developing the UK’s first CCS projects”.
And Maf Smith, deputy chief executive of RenewableUK said the Bill was “crucial in setting the investment framework for the next 20 years and ensuring that we can build on our current world lead in offshore wind and marine technologies, and guarantee clean domestic power and tens of thousands of green jobs”.
So the government has done its bit – now it is up to industry to make the critical investment decisions to go ahead with UK-based projects. And critical is exactly what those decisions are, with the future development of whole sectors hanging in the balance.
Nowhere is this more true that in nuclear. Dr Tim Fox, head of energy at the Institution of Mechanical Engineers, warns that the UK nuclear workforce is ageing and out of practise.
He says the engineering industry “is geared up to transfer knowledge to another generation. If you don’t more forward quickly enough, each year you lose a chunk of that workforce and you eventually lose the goodwill to make that transfer.”
He stresses that what is unique about the nuclear industry “is not necessarily the technical dimension, it’s the cultural dimension – the safety culture, the quality culture. That is something that becomes engrained in you like a piece of Blackpool rock. It’s that culture that needs to be transferred to a new generation of engineers.”
There is a danger that you lose “sufficient critical mass of that knowledge within companies to be able to empathetically transfer that knowledge from one generation to another. You could sit in as many lectures as you like – you need existing practising engineers alongside you for that culture to rub off on you.”
Gordon Waddington, president of civil nuclear at Rolls Royce, agrees that the UK’s nuclear new build plans are “a once in a generation opportunity. If we do not take this opportunity we may be regretting it for 20 to 30 years.”
He says there were “huge opportunities across the whole supply chain” if government and industry could relaunch nuclear new build in the UK.
Yet there is a bigger picture to the billions of pounds worth of investment and engineering skills that are riding on the success of the Energy Bill – the place of the UK, and in turn Europe, in the global power generation landscape.
Everyone agrees that many of the biggest opportunities currently lie in Asia. That balance of power – in every sense – is only going to swing further east if steps are not taken now to reinforce and develop those industries in which European companies were not so long ago the world leaders.
The UK has traditionally punched well above its weight in the energy arena. If the Energy Bill brings in the investment it is designed to, it can ensure the country will be a contender for many years to come.