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Richard Green: Shrinking the energy policy triangle

Posted by Eagle Eye
  • Friday, 23 October 2009 at 04:17 pm
Energy is never far from the headlines – price rises, climate change and power cuts have all featured, along with wind farms and nuclear power. Today is no exception, as new figures have emerged showing that one in four families are struggling to afford heat and power. While measures can and are being taken to minimise fuel poverty it is important to look at the bigger picture where environmental damage and the security of supply come into play. Nobody wants to damage the environment, and no-one wants to flick a switch and find there’s no power, but there are few decisions we can make about energy that do not run the risk of making one of these things worse.

Experts call it the energy policy triangle. One point of the triangle represents low costs and prices; a second represents minimising the damage we do to the environment; the third, a secure supply of energy with little risk of power cuts or interruptions. The government has to choose where on the triangle it wants the country to go. If it puts emphasis on low prices the industry is unlikely to have the money to invest in adequate or clean supplies, so the environment and security of supply will suffer. If it concentrates on the environment and builds the capacity to have a really secure, clean supply so that it is on the edge of the triangle between those two points, then it is as far as it can get from the point of low prices.

The UK government cannot directly choose what goes on in the energy industry, for example, the price of oil, is set in world markets and is driven by factors like China’s growing demand for energy. Even in the UK the government cannot order a private company to build a particular kind of power station – it can only influence the company’s decision by choosing policies that make the investment attractive.

The government can have a negative power – a badly-chosen policy can make things worse in all three directions at once. For example, a badly-designed windfall tax on the energy companies might make them reluctant to invest in this country, even though we need to replace roughly one-third of our power stations in the next ten years. Without that investment we run a risk of power cuts and we will have to make more use of older, more expensive power stations that will set higher prices and do more environmental damage. Conversely well-designed policies can help us get closer to what is technically possible, persuading companies to invest in modern, clean power stations while keeping prices at the lowest level compatible with a profitable investment.

The big gains come from changes to those technical possibilities - power stations could produce more energy from a given amount of fuel or wind, and carbon capture could put 90per cent of their emissions underground.

I call this "shrinking the energy policy triangle". More effective technology means that moving towards one objective no longer takes you as far away from other goals. For example, improvements in efficiency cut the cost of a warm home because you buy less energy, and producing smaller amounts of energy is better for the environment and more secure.

The good news is that the UK is spending heavily on this kind of energy research. It requires collaboration between people with a broad range of different skills. My own university has an Institute for Energy Research and Policy which involves over 80 academics. We collaborate with many companies, and with other universities. Earlier this month, Birmingham University launched the Midlands Energy Graduate School with the Universities of Loughborough and Nottingham. Supported by the Higher Education Funding Council for England, this will provide joint teaching to ensure our postgraduate students have expertise in breadth as well as in depth. They will be able to contribute towards solutions to the energy crisis.

That may be a strong word, but we must act soon to secure energy supplies and limit environmental damage. The good news is that the research going on at Birmingham and elsewhere makes it more likely that we can find solutions to these problems. If we shrink the energy policy triangle, everyone will benefit.




Professor Richard Green is Director of the Institute for Energy Research and Policy at Birmingham University

Comments

The Truth about Renewable Energy
jodybruce wrote:
Wednesday, 21 April 2010 at 07:10 pm (UTC)
I think green energy is very important if we want to move forward as a country. However I think we are going in the wrong direction. We need to use magnet motors that are over 100% efficient. Some are even 500% efficient. I know this sounds crazy, but we have this technology. It’s just being hidden from you. The Big Energy companies are making $440 billion a year from us. It’s a huge scam. If you would like to see real proof of little guys like me trying to get the word out check out this link.
http://www.energybook.info/free_energy.html
Thank you,
jody
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