If we are to take action that will avoid future energy crises, then we need to examine UK energy policy through the lens of the Energy Trilemma, says Dr Jonathan Clarke from the University of Warwick’s Centre for Global Sustainable Development.
The UK is currently in the grip of a genuine energy crisis. Wholesale prices of fuel have risen sharply in recent months, with the price of gas in particular increasing 250% since January and 70% since August. With the UK so reliant on gas for energy generation, industry and domestic heating, this trend has pushed the nation’s energy suppliers into financial difficulty, raised the risk of winter energy shortages and will see bills rise sharply for anyone who uses energy.
UK Energy Context: Net Zero and the Hunger for Gas
The roots of the current situation are reasonably well documented. A cold winter and a rebounding economy has depleted fuel reserves. A lack of wind power over the summer required energy companies to generate more electricity from gas, and buy gas the open market, which has become increasingly costly due to rising demand in Asia and constricted supplies from Russia. This crisis hits the UK in a time of energy transition as it seeks to move from fossil fuel generation to more renewable sources. This scenario was triggered in 2019, by the then Prime Minister Theresa May, who committed the UK to ‘Net Zero’ by 2050, meaning that carbon emissions from almost all sectors would need to be eliminated, necessitating cuts of 80% in the nation’s total carbon emissions and 3% year-on-year drops.
Energy production accounts for 21% of the UK's total carbon emissions and natural gas currently generates around half of all UK electricity. But perhaps more shockingly, emissions from domestic gas boilers that heat UK homes emit twice as much carbon dioxide as all of the nation's gas-fired power stations. British homes are amongst the least energy efficient in Europe. They allow heat to leak out and require much more energy to keep them warm. Protests by the Insulate Britain on this issue have made the news in recent weeks by closing the M25 to call for the Government to fund home energy efficiency improvements. Media coverage does not appear to have connected these stories though, largely overlooking the need to improve the UK’s energy efficiency.
The Energy Trilemma
Regulation of the domestic energy market is a key responsibility of national government to ensure the secure operation of industry and society, but there are often tensions around the different outcomes or priorities of these policies. For those who work in the field of energy, the World Energy Council's Energy Trilemma can be a good way of conceptualising the three energy policy concerns, which are often difficult to reconcile and in conflict to each other. The Energy Trilemma consists of:
- Energy Equity, which aims to make energy affordable for consumers,
- Energy Security, which seeks to ensure the reliability of energy sources, including price and geopolitics
- Energy Sustainability, which seeks to minimise environmental harm, such as climate change emissions.
So how does the Trilemma broadly relate to recent UK policy? Take the example of Hinckley Point. Nuclear generation will provide reliability and Energy Security, while in terms of Sustainability, nuclear power is low carbon, if not environmentally neutral. However, the project was secured on the basis of high unit cost for its energy, meaning that it scores less well for Energy Equity. By contrast, the UK’s investment in wind power provides strong, low carbon, Energy Sustainability and it is increasingly the cheapest form of energy production, but the intermittency and variable output of wind power means that it is less energy secure. Indeed, a lack of wind power this year has contributed to the current energy crisis.
Over the past 20 years, the bulk of UK energy supply or base load, has come from gas generation. This has cut the need for more polluting forms of fossil fuel energy, and with access to North Sea gas, it has been a cheap and reliable source. However, as North Sea gas reserves decline the UK is increasingly reliant on a wider European market for importing both gas and energy, along with the associated price instability. On current evidence, the more energy that the UK needs, the less energy secure we are as a nation. In order to stabilise the UK energy market, the Government needs to take action to improve Energy Security.
Domestic Energy Efficiency
The Committee on Climate Change (CCC) estimates that to meet the Net Zero target, household emissions will need to drop by 80% and this will need to be achieved through improvements to the fabric of buildings, such as better performing windows and insulation, as well as moving to low-carbon heating, phasing out gas powered boilers and moving to heat pumps. New building regulations will improve the energy efficiency of new houses, but the vast majority of homes in 2050 will already have been built and will need deep retrofit. Research has demonstrated there is significant potential for reducing energy use in our homes. For example total domestic energy use could be cut by 25% just through improvement to the fabric of existing buildings according to recent research, but uptake of these technologies has been slow and the significant cost remains a barrier to consumers and the Government.
The cancellation over the summer of the Green Homes Grant, suggests that the Government is still reluctant to make funds available to tackle the problem. Much like the previous Green Deal policy, which similarly failed to make inroads into addressing the poor quality of existing homes or improving domestic energy efficiency, the initiative has struggled due to a lack of installers, availability of grants and eventually the reliability of Government funding. While these limitations represent blunders in policy and lack of understanding of implementation challenges, they also reflect a wider Government belief that energy efficiency is a matter of consumer choice, rather than recognising it as a key component of national energy security and a societal concern.
Start with insulation
By improving the energy efficiency of homes, including the installation of improved insulation and heating technologies, the UK will significantly reduce its demand for energy, its reliance on imported gas and potentially need fewer power stations, thus improving Energy Security. In doing so, it will cut household bills, particularly benefitting those on low incomes, and enhance Energy Equity. While by lowering the amount of carbon dioxide emissions that contribute to manmade climate change, both from heating and energy generation, it will contribute to Energy Sustainability. In this sense, improvements to energy efficiency are almost unique in the context of Trilemma, providing benefits in all dimensions.
If we fail to take this opportunity, future energy instability will be costly to both households and the country at large.
15 October 2021
Dr Jonathan Clarke is part of Warwick's Centre for Global Sustainable Development (GSD). Previously he worked as a Research Fellow in the Department of Politics and International Studies (PAIS). He has an interdisciplinary outlook, with particular interests in cities, design, governance, water and future societies.
He is an experienced environmental consultant, planner, urban designer and chartered landscape architect, specialising in regeneration, masterplanning and environmental impact assessment.
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