This energy crisis needs action not more hot air

12 April 2012

One of my earliest memories of any national event is the power cuts of January 1972, caused by striking miners, and of an accompanying sense of despair far worse than the present economic crisis. Yesterday energy regulator Ofgem warned that we could be heading back there, predicting that without investment of up to £200 billion, the lights could go off within the next decade.

Whether or not the lights in our homes do eventually go off, for example during a really hard winter, the looming energy crisis will push up our power bills. The generating industry simply hasn't invested in enough new capacity, and we're far too dependent on gas, the wholesale price of which has soared in volatile markets.

Add to that the costs of the shift to greener power and of new "smart" meters, and Ofgem is warning that in future, average household energy bills could hit £2,000 a year (against around £1,200 now).

Why? Gordon Brown is fond of talking about his readiness to take "difficult long-term decisions". In fact, energy is a classic case where New Labour kicked decisions into the long grass: ministers didn't even bother with an energy white paper until they'd been in office six years.

Yet we knew all along that our nuclear power stations would come to the end of their lives, with most to be decommissioned by 2020. Nine major coal and gas-fired plants will go by 2015. Our North Sea gas production peaked in 2000. And it has been clear for years that Britain would have to ramp up its pathetic renewable energy resources.

But ministers didn't do anything — firstly because of their knee-jerk scepticism for anything green. Even when they signed up to new targets for cutting carbon emissions, they did almost nothing to achieve them.

Second, they clung blindly to the privatised electricity generating system they inherited. Indeed, Gordon Brown hectored the rest of the EU endlessly about deregulating their energy markets. Yet it has been obvious for years that privatised electricity wasn't working in the national interest — hardly surprising, as several big companies are foreign.

They were happier to sweat their assets (and fleece consumers) than to invest — in part because of government dithering. And renewable energy still makes up less than four per cent of our total, even though we're committed to an EU target of 20 per cent of our energy coming from renewable sources by 2020.

Yesterday's Ofgem report thus represents a volte face, an acceptance that government will have to intervene if we are going to get the investment and shift to renewables that we need. Energy and Climate Change Secretary Ed Miliband has admitted as much.

Will Mr Brown have the sense, at last, to accept this? It may not matter soon anyway. It could be David Cameron who has to prove that he has the foresight to retreat from his party's cherished ideological nostrums, so that private companies produce our power, but within targets set by government. If he doesn't, the lights really might start going out once more.

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