Blain’s Morning Porridge – 31st March 2023: The UK needs an Energy Transition Plan, not Regurgitated Political Posturing
“It’s actually really bad. The incoherence is really transparent.”
This morning: The UK announced a new energy strategy – but its nonsense. It’s not a transition plan, but a ploy to placate the courts. We need better if the UK is take advantage of the opportunity Climate Change and Renewable Energy represents.
Yesterday we were treated to a new UK energy strategy. It gave the BBC the excuse to flash up some gratuitous shots of Boris and Liz Truss hamming it up at the Glasgow COP 26 from 2021 on the screens. Nasty, but after the 9.00 pm watershed.
No matter how destabilising these images were to my perilous mental fragility, or how shallow and devoid of joined-up thinking the new, (but actually just old repackaged ideas), “Powering up Britain” policy is… I remain tremendously bullish about the future! Whatever the challenges thrown at humanity in terms of everyone (ultimately) sharing in a more prosperous society – I expect we will muddle through. We usually do. The success of mankind has been our ability to adapt and turn adversity into opportunity.
Global warming should not prove the end of everything! It should not be the block on any growth head-in-the-sand environmentalists demand, nor will climate-change deniers stop it happening by denying the downright obvious. Climate Change is happening – and to be fair it probably always has been (we might have accelerated it a bit!) It’s going to require hard and difficult decisions, but if we’re smart it’s going to prove a growth driver, and a massive opportunity across technology and global cooperation!
The saner parts of the climate change lobby say we need to approach this like a War – which is exactly what some nations are doing. The Americans have put in motion the $369 bln inflation reduction act – which is broadly a massive subsidy programme to support climate mitigation and renewable technologies. The Europeans are working on a similar range of supports and enticements to create new climate positive growth.
Here in the UK?
Our government has thought about it quite-a-lot, talked more about it than almost anyone else, hosted some tea and coffee mornings to chat around it, held that jolly good conference about climate change in Glasgow, and even asked a few environmentalist types about it. Surely that’s enough?
Thing is, after being in government for quite a long time, surprisingly the piggy bank is somewhat empty, and, as the chancellor says we don’t want to go “toe-to-toe” with the US “distortive” subsidy regime. Instead, we’ve got some pretty charts showing we aren’t using much coal these days, and by covering the nation in solar farms and filling the sea lane with wind turbines we’re doing awfully well in terms of replacing our decaying nuclear facilities with nice, clean renewable power – which we bought on the cheap from China… said the energy security minister.. (Ahem.)
It’s all working remarkably well. The UK is cutting emissions. Yay!
Except of course when we get a Dunkelflaute – when the wind doesn’t blow, the freezing still air has come in from the Kremlin, and we suddenly don’t have any energy being generated. But, hey, that’s ok because Dunkelflaute is a German concept, and therefore post-Brexit can’t legally be applied to what we jokingly call the UK’s green energy transition strategies.
I must have missed the part in the new energy policy about how the UK’s energy security works when the wind aint blowing and its cold – as happens every time a blocking high descends upon us during the winter. There is a solution – energy storage. Capacitance, the holy grail of energy transition, would allow us to store all that electric the wind farms generate when we don’t need it. The government gets all excited about lithium batteries and using that power to make hydrogen. Or we could store it in hydro-electric schemes like the Welsh Electric Mountain or Ben Cruachan in Scotland. They work and are deliverable today.
Nor does the government address the IP domicile issue. New-technology UK energy projects, including Drax’s dubious bio-waste projects – which was rejected for a government programme y’day – are moving to the States to take advantage of the subsidies there – which don’t exist here.
Aside from the momentary amusement of Climate Mitigation Energy Security and Net Zero Secretary of State Grant Shapps going full-Churchill in a war-room with a map dotted with windfarms, the UK is giving a masterclass in political dither and puff.
It’s all a bit of a flaff. Yesterday, we got reams and reams of regurgitated policies and announcements wrapped up in a badly tied package, all because last year Friends of the Earth persuaded the UK courts the governments “Net Zero” strategy contained legally binding targets, therefore the govt was given until the end of March to announce how it is going to achieve these targets.. Nothing confusing in that – oh, and Kwasi Kwarteng was the minister who launched the Net Zero strategy.. imagine him tripping on his own shoelaces…
The reality is Climate Change, Renewable Energy, and Transition Strategies to get us to New Zero is a serious issue. Far too serious to be entrusted to the exigency of simply meeting a court ordered date to announce firm policies on the road map to Net Zero.
The centerpiece of the new Powering up Britain finagle is a $20 bln bet the government is placing on carbon capture tech over the next 25 years. The idea is to store carbon under the North Sea. The problem is there is no guarantee we can make these technologies work at the scale required. It also contains new proposals for boosting UK home owners to convert to heat pumps – which can’t heat most homes without completely rebuilding the central heating first.. Or how about Carbon Border taxes penalising high-carbon goods from overseas.. that won’t trigger trade retaliation at all…
The reality is the UK can get to Net Zero. But only with a properly thought out transition plan. It should involve nuclear, renewables, capacitance, but also innovation in hydrogen and new tech, plus how to use gas as part of the transition plan, while greening the environment and improving soils with carbon. That is not what we got yesterday. We got a hashbag of recycled ideas. We deserve better.
There are ways of transitioning to net zero. They require joined up thinking. We ain’t getting that. Go try again Mr Shapps.
Five Things to Read This Morning
Out of time, and have a great weekend. Boat is back in the water – time to go sailing!
Strategist – Shard Capital