United Kingdom adopted the market for energy approach in 1982 under the stewardship of Mr. Nigel Lawson the then secretary of state in charge of energy. From that time, the power was to be a traded product, just like other commodities and it supply was to be settled in the marketplace. The adoption of that idea was slow and by the early 1990s, most of the energy parastatals had been privatised. Electricity, coal, gas and the nuclear power were all privatised. The old mechanisms and commands like Central Electricity Generating Board were replaced by many companies for generating and distributing purposes. The energy was now being marketed through numerous arrangements (Krause, Bach, Koomey, 2013,p.17). The secretary for energy was in a hurry to ensure competitiveness element that was missing from the privatisation of Gas. Over the years, the rules of trading electricity have been mended with introduction of New Electricity Trading Arrangement NETA and later British Energy Trading and Transmission Arrangements BETTA. BETTA and NETA focuses on the short term prices without coordination of security of supply concepts or the change in climate, and they need an overhaul change. Throughout the privatised energy industries, the regulators have exerted varying pressures over the time that almost led to bankrupt the British Energy and some other generators in 2002. The British power was rescued as the costs of energy were forced down by the regulator to accommodate the disjointed policy making. The privatisation also affected the research in energy provision and use, and consequently the investment in energy research has reduced by 50% over a period of ten years. The reduction in energy research investment has happened at a time when huge research and improvement effort should be focused on the carbon capture and storage. There should also be investments in large-scale electricity storage, the nuclear fusion, distribution of the generated power and the effect on grid stability of large intermittent input from wind generation. The current energy policy is intended at achieving the safeguard of the environs and the surety of the energy supply, in particular tackling of the climate change by controlling emissions of carbon dioxide at levels that would prevent the global temperatures rising by 2oCelcius. The EU targets are 20% of renewable energy and 20% reduction in carbon emission across Europe by 2022. The united kingdom’s target is 15% renewable energy, which would constitute 40% renewable electricity, since the fossil fuels for transport purposes and heating may be hard to substitute. BERR’s latest model for united kingdom, with ROC inputs incorporated, gives an approximation figure of 14% renewable power by 2025. Since that is not even near to what the UK government is legally committed, it shows that there is urgency of generating robust power with firm foundations in fiscal, engineering and technical probabilities not as with the Energy white paper of 2003. Besides, uncertainty in the energy policy has delayed the progress in the energy sector. A case in point is the nuclear power where the government made a series of U-turns that culminated in the energy white paper of 2007 that finally confirmed the nuclear power as part of the united kingdom energy mix. Following consultations, another white paper on nuclear power was published in 2008 under which the companies were invited to forward proposals for nuclear power plants. The renewable energy policy does not fare any better, having been developed in a haphazard manner, there is no an encompassing strategy to integrate the renewable energy into the overall energy use. Certain segments and expertise are being targeted by dissimilar policy instruments. The renewable obligations only targets technologies aimed at power generation, the renewable fuel obligation is aimed to encourage the use of biofuel in the area, the climate change levy targets use of fossil fuel energy in the commercial sector and illogically, large hydro and nuclear power.( Chmutina, Goodier, 2014, p . 68 ) The EU trading scheme mission wants to reduce and cap carbon emissions from the large organisations. Other nations have similar problems but a few of them are more successful than UK in encouraging renewable energy, particularly Germany and Spain where feed in tariffs is applied. One Kilowatt hour of power in Germany is approximately 40p as compared to 5p in the united Kingdom. Nonetheless, without an inclusive policy on the renewable power over the transport, cooling, heating and electricity requirements, the UK will struggle to get close to its total energy use objectives. Policy ambivalence and procrastination are the main causes that have led UK to the unenviable position of facing the multiple problems of the old nuclear power stations. The ineffective renewable sector and the premature closure of coal plant due to EU Large Combustion Plant Directive, all of which will accelerate the dependency of gas imports from unstable economies that are vulnerable to the volatility of the global market. United Kingdom is bound to lose a third of its generating capacity by the year 2020 and yet the emission of the carbon dioxide is still rising. It is clear that the renewable energy will be required to play an increasingly essential role of providing carbon free energy, but it can only be 14% of the total UK’s electricity by 2020. Any idea that the nuclear contribution to carbon free energy can be replaced by renewables like wind does not stand up to inquiry.( Demski, Spence, Pidgeon, 2013,p.24). The renewable electricity currently constitutes 4.5% of the entire energy supply of which landfill gas is 25.4%, hydro 25.6% wind 24% and other sources 26%. Renewable energy advisory board of UK has indicated that the country might still miss its 2014 target.The process of attempting to get the 20% of renewable energy by the year2020 would require extra incentives in order to move with speed (Lockwood, 2013,p.56). The progressive reduction of the carbon free nuclear power will present an additional challenge of replacing the carbon free source with another without making inroads on the coal and gas. It would require very many wind turbines to replace the two nuclear plants that provide 40% of energy currently. From an international perspective, the idea that peak gas and peak oil theories which predicts that there will be a global supply peak in the next few years and then steadily diminish is gaining ground. That view fuels the notion that gas from Russia and Middle East might not last to satisfy the growing demand from UK and Europe over the next ten years. The competition from India and china further reduces the UK’s ability to secure affordable and secure hydrocarbon supplies. Energy is the lifeblood that fuels the growing civilisations and without it economies slides to anarchy. Fortunately, there are reliable technologies that can be relied on by those who care to use them.
Chmutina, K., & Goodier, C. I. (2014). Alternative future energy pathways: Assessment of the potential of innovative decentralised energy systems in the UK. Energy Policy, 66, 62-72.
Demski, C., Spence, A., & Pidgeon, N. (2013). Transforming the UK energy system: public values, attitudes and acceptability: summary findings from a survey conducted August 2012.
Krause, F., Bach, W., & Koomey, J. (2013). Energy policy in the greenhouse: from warming fate to warming limit. Routledge.
Lockwood, M. (2013). System change in a regulatory state paradigm: the “smart” grid in the UK.