Yesterday’s referral of the U.K.’s six biggest energy companies to the Competition and Markets Authority gives us a choice between a bad situation and a good situation. The enquiry could take as long as two years. Already, investment in our energy supply is behind where it should be if we are (to use the over-worn phrase) to keep the lights on. These six companies, who combine generation, distribution and both wholesale and retail sales, control 95% of the UK market. A two-year delay, during which these companies will be reluctant to invest in new generating plant, could be catastrophic. Investors may also be reluctant to keep investing in the Big Six companies. That could damage the companies’ ability to build new plant even if they wished to. We could find ourselves with a very precarious electricity supply very soon.
That bad scenario assumes that we all stick with an attitude that expects to switch a switch and the lights come on. The electricity is always available. We’re not really bothered about where it comes from (American coal? Turkmeni gas? Uranium? A dam at the head of a flooded valley? A wind farm in the countryside?) and we’re not really bothered about the cost of that generation – except the cost shown in pounds and pence on our bills.
There is an alternative. This is an opportunity to re-think how we use energy, how we generate it and how we distribute it. The probable reluctance of the Big Six to invest in new infrastructure for a couple of years opens up the picture to alternatives. Why do we need big energy companies? Why do we need big, remote generating plants that are a blight on the local environment and that lose a substantial amount of the power generated over long transmission lines and in step-down transformers? Why can’t we start being more aware of the electricity and gas we need to use and be clever about using it efficiently and appropriately?
This is the time for smaller, independent energy companies to step into the breach and start breaking up the energy oligopoly. They’re not going to build a massive power station, but they are well-placed to invest in smaller scale, more localized generation and distribution projects.
This is the time for communities to get together and put up solar panels, including thermal panels to heat water, put up wind turbines on houses, invest in heat pumps, and so forth. We can bring the whole expectation of energy supply down to the local level (where, of course, it began in the first place). There are lots of community energy groups out there, already part way down this road, who can share their expertise and enthusiasm with others.
This is also the time for investors to pull out of the dodgy Big Six and invest in less risky small-scale schemes. This makes sense just from a financial point of view – e.g. Brighton Energy Co-op is currently giving a good rate of return. But it also makes sense in the bigger, longer picture. Whatever happens with this competition enquiry, the future of large-scale, fossil-fuel power generation is short, for all sorts of reasons. This is the time to start thinking again – thinking small, local and sustainable.
Alex Mabbs 