“Watershed moment” for British energy

Energy UK, the UK’s biggest energy lobbying group, will start campaigning for low-carbon energy alternatives for the first time, in what is being called a “watershed moment” by some environmental campaigners. The group had previously been seen as a defender of fossil fuels, however CEO, Lawrence Slade, has seemingly had a change of heart, and stated that the shift to fossil fuels was “urgent, in order not to be left behind”. The Guardian reports today that Energy UK now “officially supports the government’s phasing out of coal-fired power stations and is critical of ministers over the way they have cut subsidies to wind and solar power so deeply and suddenly”.

The UK’s biggest energy lobbying group has shifted its position on green energy and will start campaigning for low-carbon alternatives for the first time, in what environmental campaigners are describing as a watershed moment.

Lawrence Slade, the chief executive of Energy UK, which represents the big six providers and has been regarded as a defender of fossil fuels, said the shift was urgent in order not to be left behind.

“No one wants to be running the next Nokia,” he said, referring to the mobile phone company that was overtaken by forward-looking rivals. “I want to drive change and move away from accepted (old-style) thinking.”

This is a major turnaround for an organisation that has historically been criticised by consumer and green groups as a dinosaur protecting the vested interest of incumbent supply companies such as British Gas, SSE and others.

Energy UK now officially supports the government’s phasing out of coal-fired power stations and is critical of ministers over the way they have cut subsidies to wind and solar power so deeply and suddenly.

Slade accepts that the big six, along with ministers, have made plenty of mistakes in the past but he says it is now time to develop a national plan that everyone - especially consumers - can buy into.

Slade said: “It would be quite a sensible thing to have an Energiewende [Germany’s plan to move to a majority of renewable energy sources] but the emphasis would have to be on our own version not a direct cut and paste.” The German energy transition programme has attracted support but also some criticism.

Slade, who formally took over the top job last summer, was talking following the publication of Energy UK’s Pathways to 2030 policy document prepared with the help of professional service company, KPMG.

Amid concern about the lights going out, 60 local authorities argued last week that coal-fired power stations should be kept open, but Slade surprisingly disagrees, saying we need lower-carbon solutions.

Energy UK wants to see more demand reduction, plus regulatory changes, to help support electricity storage projects that help balance out the peaks and troughs caused by wind and solar power.

Slade also believes urgent action is required to encourage power companies to keep existing gas-fired plants running, as well as the provision of aid to make it worthwhile for new ones to be constructed.

Energy UK is calling for much more long-term thinking and financing. It says that details on the levy control framework of subsidy levels should be published so that investors have a clear picture up to 2025.

Slade believes onshore windfarms should be allowed access to new forms of subsidies and says that aid cuts since the last election have undermined investor confidence.

He said: “Energy policy is not as yet coherent. It is becoming clearer but more needs to be done. Investment is there but not forthcoming because there is not black and white clarity [on government policy]. The abruptness of some of the cuts and the scale of some of the cuts have alarmed people.”

Slade said he is keen to move on from arguments of the past and concentrate on solutions as Britain moves away from big central power stations to a more decentralised system of energy.

Catherine Mitchell, a professor of energy policy at the University of Exeter and a champion of the low-carbon economy, welcomed the apparent U-turn by Slade’s organisation.

She said: “Energy UK is the conventional industry lobby, and is generally at the conservative end of arguments. This [Pathways] report reads almost as if they have ‘flipped’ to the other side. I take this to mean that their members realise that their future is in the ‘new’ energy system rather than the ‘old’, and this is to be welcomed.”

Richard Black, the director of the non-profit Energy and Climate Intelligence Unit, also viewed Energy UK’s new stance as positive. He said: “The report shows that experts across the industry see a time of tremendous change ahead for the electricity system, with the traditional utility model increasingly outdated.

He added: “Falling demand, increasingly competitive renewables, storage, interconnectors, demand response – this is the blueprint for the electricity system just 15 years hence, and it’s telling that it comes from an industry body rather than a ‘green’ thinktank.”