National Emergency Briefing on Energy transition
Opening her presentation Tessa Khan referred to Angela Francis’s earlier presentation, on the economic case for the transition to renewable energy, arguing that the price of energy is a major driver of inflation and historic rises in the cost of living, and that moving away from fossil fuel derived energy is the best way forward, being more affordable than the status quo. Renewable energy is not only more affordable, but it is more secure in the short and long term.
In terms of affordability, Tessa stated that since the 1970’s, 50% of the UK’s recessions have been caused by fossil fuel price shocks, recent hikes in the price of Gas was caused by Russia invading Ukraine, the consequence being the government spending £64 billion to support individuals and households, that is more than spent on the annual defence budget, yet still 12 million households are still struggling to pay their bills, gas prices doubled relative to pre-invasion prices.
Tessa added, “The input for renewable energy - sun and wind - is free forever, while fossil fuel prices are set by cartels or the whim of dictators.” The cost of renewables has declined in recent years, examples given being, wind energy down 50%, solar down 70%, storage battery costs down 80%. She also stated that electrical energy is more efficient than fossil fuel energy, which wastes around two-thirds of the potential energy contained within them, clean electricity avoids this loss. (Please see authors explanation of “wasted energy” in footnote.)
Again, Tessa refers to Angela Francis, in that we are at the point now of investing in the “upfront costs” and this is a political choice, not a barrier. Upgrading the grid and using heat pumps and insulation are merely growing pains - and delay only increases total costs. Tessa argues, who bares the cost? Other countries have lowered their cost of capital, in terms of interest and returns on loans; she argues that it could be one of the functions of the recently created National Wealth Fund (NWF).
Other strategies that could come within the NWF must be breaking the link between gas and electricity prices, taking gas powered stations in to public ownership, with insulating homes being one of the fastest ways to cut bills. Yet the UK still has some of the coldest, most heat-leaking housing stock in Europe.
The jobs transition in energy is already happening. North Sea oil and gas employment has halved. Even with new licences there is an opportunity to invest in training former oil workers in renewable technology especially in areas negatively affected by job losses in the North Sea fossil fuel industry, such as industries in wind farm manufacture, installation, and maintenance.
Tessa reminded her audience that the UK has successfully upgraded its energy’s system before. It did so in a decade, changing its infrastructure to use North Sea gas instead of gas from coal. However, in doing so we must not repeat the devastation to miners, and the mining industry that we previously did when coal mines became uneconomic and closed, and miners lives and communities suffered.
Tessa argued, as did Angela, that if we manage the transition for the benefit of people and places then the prize from electrification is enormous. A renewable, electrified system delivers lower bills, energy security, good jobs and a just transition for households and workers alike.
Footnote
Authors explanation of “wasted energy”, fossil fuels contain potential propulsion heat energy, which is released during the process of combustion , one third of the heat energy generated is converted into mechanical energy which is used to drive the wheels, the rest of the energy is “wasted energy”, the majority of the heat energy generated, is lost via exhaust gasses, it is also radiated to stop the engine overheating, and some is consumed in overcoming power train mechanical losses. Clean electricity avoids this loss.