Why high UK energy bills were decades in the making – By Joshua Nevett - for The BBC – 06.11.22
- Michael Julien
- Nov 6, 2022
- 3 min read
UK Governments over decades have been accused of short-termism in their choice of energy policies. In a year of soaring electricity bills and fears of blackouts, energy has become the subject of a bitter blame game.
The world is in the grip of a global energy crisis, sharply exacerbated by the war in Ukraine and the strain that has placed on the supply of gas, a major resource.
But household energy costs are higher in the UK than almost anywhere else in Europe. How has it come to this?
Looking back at decades of political decisions, former energy ministers and industry experts have told the BBC where they think some mistakes were made.
Gas dependency
For decades now, UK governments have bet on gas to keep the lights on and our homes warm.
Our appetite grew in the 1990s, when a fossil-fuel frenzy in the North Sea set off what was dubbed the "dash for gas". As that dash slowed to a stroll, the UK became a net importer of gas in 2004 and reliant on supplies from friendly countries such as Norway.
Adam Bell, who was head of government energy strategy until last year, said there was an assumption that global supplies of gas "were always going to be deep".
Mr Bell said the government "wasn't thinking of potential downside scenarios", leaving the UK vulnerable to this year's stratospheric rise in gas prices.
Did anyone see this coming earlier? Brian Wilson, who served as an energy minister in Tony Blair's Labour government from 2001 to 2003, claims he did.
Mr Wilson remembered one sobering forecast that "always stuck in my mind", a projection of almost total reliance on gas imports from Russia. Though it never came to pass, becoming heavily dependent on gas "was something I didn't think was a great idea", he said.
The energy regulator, Ofgem, didn't think so either. In 2009, Ofgem produced an unsettling report, which flagged dependency on gas imports as a key risk to energy security.
The founder of Stag Energy, George Grant, had one idea to mitigate this risk. It involved drilling into salt caves beneath the East Irish Sea Basin to build gas storage for a rainy day.
Ministers were initially enthusiastic about the Gateway Project and planning permission was granted in 2008. Then the financial crisis hit, choking off investment.
While Mr Grant kept making the case for Gateway, David Cameron's government felt "there was not a need to intervene to support more gas storage".
Without state support, his project was sunk. Then the government went even further, ruling out any public subsidies for gas storage. It meant no state handouts for Rough, the UK's largest gas storage facility, which was unable to afford engineering upgrades and was mothballed in 2017.
The no-subsidy policy was "absolutely" short-sighted, Mr Grant said, particularly because the government has since asked him about the possibility of reviving Gateway and pushed for Rough to reopen.
Had we invested in gas storage sooner, "we would have been much more protected this winter", said Charles Hendry, a former Conservative energy minister.
The choice not to had consequences for the UK's energy security, as it did in the nuclear industry.
The article ends with these salutory words:
For too long, politicians "haven't wanted to do the boring stuff", said Emma Pinchbeck, chief executive of Energy UK, a trade association.
Instead, they've focused on the "big infrastructure projects, which are sexy", she said.
"For the last decade in this country, every single year we've been missing out on installing energy efficient measures and clean heating, which would have reduced our exposure to these prices.
"And those decisions were made because of pretty short-term politics."
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