“The past week has been fantastic pantomime, but energy policy is too important to be turned into a Punch and Judy show” (Ruth Sunderland, The Observer, August 3)

I hate to say “I told you so”, but I did. When asked by The Times to pen a comment on ‘My Big Issue’ before the 2005 General Election, I opted for UK energy policy, and this is what I wrote:

“Election Room 2005 is filled with elephants hidden behind the flimsiest of political camouflage. For me, the bull elephant is the need for a practical energy policy for Britain.

On this issue, I am disenfranchised because all three main parties, despite differing degrees of enthusiasm and rhetoric, share the same outlook: an unconvincing belief that ‘renewable energy’ - wave, wind and solar power - is a credible way to solve Britain’s energy problems.

Political correctness is warping energy policy. Predicating policy, through the doomed Kyoto Protocol, on unpredictable environmental concerns is disastrous. It will slow economic growth, dull our competitive edge, deny much-needed energy expansion and expose us to political turmoil overseas. The result will be a Britain in which the lights go out by 2020, if not earlier...”

Today, I find my words chilling. We have recently experienced a serious break-down in our energy supply system, and the lights did go out. Gas and electricity prices are becoming punitive because we have left ourselves exposed to imported gas supplies, have failed to renew our older coal-fired and nuclear power stations, and have fallen for the mad idea that wind can fill the looming 40%-50% power gap. There are still utopian ‘greens’ opposing and delaying the urgent development of new nuclear power stations and coal-fired plants. And, stupidly, we have run down our expertise in civil engineering to such a degree that the withdrawal of the French from our nuclear planning process could prove a serious set-back.

Moreover, many of the leaders of our energy industry are too cowed to speak out, terrified that they may fall foul of the PC brigade on ‘global warming’.

The Commentariat Spot The Energy Elephant

But, at least, one thing has changed. The media and the commentariat have, at last, spotted the energy elephant in the room. Over the last few days, we have been awash with a tide of articles on the energy crisis, which, just as I predicted in 2005, has hit home with a vengeance.

Our current plight can be firmly laid at the doors of Number 10 and Parliament [see: ‘Gasbagging’, July 31], and, in particular, with Labour, a point well-made this morning by William Rees-Mogg [‘A policy of running on empty won't do’, The Times, August 4]:

“When Labour came to power in 1997, it was already obvious that Britain urgently needed to make decisions on future energy supply. It was known that gas supplies from the North Sea would decline rapidly after the year 2000, that there would be a similar rundown in North Sea oil, that Asian demand for oil would be rising. The problem of electricity generation was particularly acute, with the prospective obsolescence of most of Britain’s nuclear power stations by 2015 and similar obsolescence of a number of big coal fire stations.

The Government also knew that new energy supplies could only be developed over a period of about ten years. That applied to new oil or gas deals, to oil refineries, and to conventional or nuclear power stations. In 1997 there was therefore a window of about 15 years to secure the energy supply Britain would need in the decade 2010 to 2020. The Conservative governments of the 1980s and 1990s had themselves failed to place orders for new power stations. As a result the first-class British engineering teams for building such stations had been dispersed or had retired.

The new Labour Government after 1997 failed to develop an energy policy. The past 11 years have been largely wasted, partly because of environmental concerns, but partly because of the Government’s failure to address a critical requirement of the national economy.” [My emphasis]

A similar critique was presented yesterday in The Sunday Times by Jill Kirby [‘Dithering ministers saddle us with an energy crunch’, The Sunday Times, August 3], although Jill argues that it may well be the Conservatives of David Cameron who have to pick up the pieces extremely quickly if they do achieve office by 2010:

“It is a headache of the government’s own making. Yes, oil prices do affect the cost of gas, but the biggest driver of domestic energy prices is the UK’s inability to be energy self-sufficient despite rich natural reserves and our one-time world leadership in nuclear power. Our lack of independence leaves us with a looming energy gap as we scrabble for power supplies on the world markets. The gap will yawn wider in the coming few years and will present the next government with an energy crunch that could be even more painful than today’s credit crunch...

... When the energy crunch comes, Cameron is likely to be in 10 Downing Street. He will have no desire to follow in the footsteps of Edward Heath and be forced to order national power blackouts. I might have to give up those long hot baths - but I draw the line at cleaning my teeth in the dark.”

So: What To Do?

But how to act quickly is the towering problem, the complexity of our current plight being carefully examined by Will Hutton writing in The Observer [‘Don't make the consumer pay for these inflated fuel prices’, The Observer, August 3], and by Ruth Sunderland in a brilliant article in the ‘Business Section’ of the same newspaper [‘We need a grown-up debate about energy’, The Observer, ‘Business & Media Section’ (p.3), August 3]:

“A windfall tax would be popular with voters and could be an easy way for Gordon Brown to win quick plaudits. But energy minister Malcolm Wicks has been circumspect, making clear he does not want to ‘play a populist card saying profits are wrong when... profits are needed to invest in energy in the future to keep our lights on.’

He [Wicks] is right. The UK is facing an energy supply squeeze; we are just a small island in a global, and increasingly competitive, market. Falling North Sea production means that we will import 40 per cent of our gas this year and by 2015 we will have to source three-quarters of our needs from abroad. That puts us in an unhealthy state of dependence on the dysfunctional continental gas markets, not to mention even more worrying prospects such as Putin and Medvedev’s Russia. As Centrica’s Sam Laidlaw said last week, it is a shame that we did not do the same as Norway and set up a sovereign fund with our North Sea oil revenues. I have made the same point a number of times in this column - if we had, we would be far better placed now.”

Just so. But what should we do, granted that this buffer is no longer possible?

First, there must be no politically opportunistic windfall taxes or Government scams using emission-trading scheme permits. At this desperate time, it is vital not to do anything that might increase costs, and thus prices, further. Profits are vital for urgent investment into new supply infrastructure;

Secondly, the Government must move urgently to increase our ability to store natural gas from the current paltry 13 days to figures more in line with Germany (99 days) and France (122 days). We also need to restructure our terminals so that extra deliveries of liquefied natural gas (LNG) can be more easily accommodated;

Thirdly, we must ignore the increasingly irrelevant ‘green’ protests, and move swiftly to build new coal-fired plant like the two now planned for Kingsnorth near Rochester in Kent. ‘Green’ self-indulgence has had its day in the sun; it is now too dangerous for us to tolerate it with just a benign shrug;

Fourthly, we must solve urgently the impasse with Électricité de France (EDF) over British Energy, and make a timely start on the programme for the next generation of nuclear power stations, but choosing one standard system for the whole country;

Fifthly, ministers must come clean on wind energy, admitting publicly the serious limitations and high costs involved for the consumer, especially with regards to the prohibitive problems of dealing with this intermittent source of energy on an aged grid, which will require a massive upgrading;

Sixthly, again ‘green’ waffle must be put aside, and the long-planned Severn Tidal Barrage should be embraced with Brunellian panache; and,

Finally, but most importantly, the Government must place energy right at the top of the political agenda, and establish a settled energy policy within which the utilities and businesses can feel confident about the commercial environment within which they are planning for the - for our - future.

Energise Britain

I must thus end by repeating the conclusion of my 2005 article in The Times:

“Can we please shed the political paranoia about ‘saving the world’, and focus instead on practical energy? The failure of our political parties to be realistic about future energy demand could be catastrophic. I do not want to see the economic success of the UK falter because of ‘green’ whimsy. Drop the cant and energise Britain.”

Regrettably, my 2005 predictions have proved to be painfully correct.

I hope my 2008 fears can be allayed by urgent political action. For, if we fail in this time round, the UK will be reduced to a second-rate state.