Energy: A Crisis Within a Crisis

By GLOBUS Editor-in-Chief Sara Azeem

Inspired by Bret Willer’s and Jonathan Neale’s talks entitled ‘Sustainable Cities Need Sustainable Citizens’ and ‘Climate Jobs and Green New Deals’ respectively, delivered at the TED Countdown event organised by TEDxWarwick and GLOBUS

The “energy crisis” isn’t recent news. Anyone keeping an eye on the news (and their energy bills) since last year has witnessed the price of gas skyrocket. This has led to increased energy prices and, as a result, higher electricity bills. While the effect has been felt globally, the UK has been hit particularly hard. And the reasons for this are manifold: low supply of natural gas, impacts from the pandemic, low natural gas storage capacity, coupled with Brexit and leaving the EU internal energy market, has all played a part. The fire at the IFA1 interconnector with France last September didn’t help in the slightest. Markets have collapsed. Businesses have gone bust. Hundreds of thousands of households were predicted to be pushed into fuel poverty last winter. And the situation is not going to improve anytime soon.

Amidst all the turmoil, a debate reemerges – the green transition. Opinions conflict between driving investment into more oil and gas, or the renewable energy sector. While the debate is ongoing, action is already being taken. 

But in the wrong direction. 

Mere months after the UK hosted the COP26 summit, a new oil and gas field in the North Sea has been approved. And five more are in the stages of approval. Yes, natural gas burns cleaner than coal, and yes, it is a crucial part of the transition. But there has to be a will to move past the intermediary phase to be able to see the transition though.

The energy crisis clearly sheds light on the repercussions of over-reliance on fossil fuels. The UK is already becoming highly reliant on other countries and has to import half its gas, costing billions. Looking for more might be a quick solution, but it is nothing more than a temporary one. Non-renewables are just that – non-renewable, and falling supply was always inevitable. 

At the same time, one cannot deny that renewables come with their own challenges. Intermittency is a problem that still needs to be solved at scale. So is storage. Complete reliance on renewables like wind and solar is not feasible today. Especially in a country like the UK where wind generation is the second largest source of electricity generation. This reliance, coupled with a period of low wind speed, is also cited as one of the reasons for the energy crisis.

Both Bret Willers and Jonathan Neale discussed these challenges in their speeches at the TEDx Warwick Countdown event last year.  Jonathan Neale called for the construction of “super grids to mix the supply of renewables from hundreds and thousands of sources with tens of millions of users.” And both mentioned energy storage as an obstacle to the dream of 100% renewable energy. 

But there will always be challenges. In the past, the cost of production of renewable energy was a major consideration as well, but they are becoming increasingly cheaper and more competitive ­– even compared to the cheapest fossil fuel option. The intention behind subsidising renewables was that they would pay off in the future. And that future is now. The Contracts for Difference scheme is a major green levy item created to incentivise development of new wind farms. Last year, gas costs resulted in such high wholesale prices that the scheme returned funds to energy suppliers. This just goes to show how the support for renewables is beginning to pay off by bringing down the cost for energy suppliers. 

Unfortunately, this benefit has not been felt by the public who are still paying for these levies. However, the schemes help household energy bills in another way – by changing the energy mix. Gas bills have risen faster than electricity bills because electricity isn’t entirely reliant on gas anymore. The levies have helped build wind farms and solar panel installations, which are reaping benefits now. 

In the same way, investment can help solve the problems of storage and managing intermittency. Gravity storage, concentrated solar power storage, cryogenic batteries, and green hydrogen are some of the many solutions that engineers are working on or have already implemented. Like Neale said, “The amount of expertise we already have is astonishing. It’s there.” But these solutions do not come cheaply. Quite the opposite, they can be very, very expensive. But as shown before, it pays off. Which is why, at least in my opinion, it makes a lot more sense to invest in our future than retreating to the past. 

And this is already underway. As Willers said, “the government is beginning to recognise that energy systems are becoming more localised, for example people’s solar panels, and not big power stations. This requires a change in how energy is managed – moving from a nationally, centrally controlled process to something that has got local control.” In theory, this sounds great. But decentralisation presents its own challenges. He mentioned the difficulty of leveraging the investment required to achieve large scale improvements to energy efficiency within homes and to develop renewable energy sources especially in small cities such as Coventry with limited opportunity for both solar and wind. 

Neale presents an interesting solution, one that is on the other end of the spectrum. He is a proponent for a united government service that will provide the climate jobs required for this transition. He cites the reason for that is that a new electrical system will be too complex to construct with many different competing profit centers. It is an undeniable fact that many people in the old high-carbon economy will lose their jobs. Neale believes that only the public sector can promise everyone who loses one of those jobs retraining and a new, permanent, decently paid climate job. 

The idea that the green transition will result in job generation is clear. But the answer to who should provide these jobs is a bit less obvious. The endemic short-termism in politics makes it hard to believe that there will be incentive to invest in such a long-term dream. But the same can be said about the market. And I completely agree that we need a system where we can learn and shift as required. But in my opinion, the government cannot be expected to deliver that. And neither can the market be trusted to do so fairly.

As all things go, a public-private partnership seems to be the way forward – energy is a sector that has numerous success stories with PPPs. But at the same time, there isn’t a one-size-fits-all solution. Even if there is, we will never know. Predictions are based on models, models which are modelled on the current world. But we live in an ever-changing world, and this change will be accelerated by crises like the one we face today. And soon, the markets will change along with it. 

This points to the need for mobilisation on all parts. The government. The markets. And at the end of the day, the public. That’s what makes this so tricky. Because as the public, we have the power to drive change. But also, we don’t.  The energy crisis presents challenges across various dimensions: economic, political, as well as technological. This crisis is one enveloped within a greater crisis – climate change. Failing to remember that will only exacerbate one issue after another. We can either look back or forwards. Both choices with consequences of their own. 

As William Wordsworth once said
“Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.”

Header image by CHUTTERSNAP via Unsplash

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