David Elmes tells Sky News time's running out to avoid energy crunch
21 February 2013
Professor David Elmes told Sky News the UK Government it needs to act urgently to move ahead with a range of new energy sources and warned against it becoming dependent on one source.
The head of Warwick Business School’s Global Energy Group says that time is running out for the UK to take action on investing in new energy sources and reducing demand or the country risks having little control over rising electricity and gas prices.
Professor Elmes’ comments came after Alistair Buchanan, departing head of the UK energy regulator OFGEM had warned that energy prices could rise if the UK becomes reliant on importing gas.
“Supply and demand of electricity is set to become very tight for the UK and this is a warning that OFGEM has given for a number for years now,” said Professor Elmes on the Sky's Jeff Randall Live. “We run an increasing risk of not having the capacity to meet the country’s demand for electricity at critical times. The capacity margin in future years is expected to fall from 14% to 5%. This really is the time to get on and do something about it.”
Professor Elmes believes there is still time to develop a range of sources, but urges the Government to act now to avoid an energy crunch.
“We do have policy in front of Government at the moment which is about getting on with it, but it is becoming quite acute,” he said. “Yes, we are closing some old, inefficient, polluting power stations which is reducing our generating capacity but the EU directive to shut those power stations has been around since 2001. We need to focus on developing cleaner and more efficient power supplies. There is still time but we are getting close to the time when it will be too late.
“While gas supplies across the world look attractive today, we need a broad mix of energy sources so that we avoid becoming dependent on international gas prices, which may change in the future.
“We’re arguing over which types of energy should get the most support and run the risk of trying to pick the winners when we have the opportunity to build a mix of new energy sources, and invest in reducing energy demand as well. And that means resisting today’s arguments for any one type of energy in particular.”
Professor Elmes believes the blame for the looming energy crunch needs to be shared by both the industry and Government.
“In the UK, we are in a new relationship between Government and the energy industry,” said Professor Elmes. “We had a long period of time when Government left energy to private companies and the markets. Now we are trying to change the energy sector and we need a tighter relationship between Government and business so both sides need to step up to the new world we live in. But it is not just about building new power stations, it is about making industry more efficient and about customers changing the way we do things in our homes, making them more energy efficient.”
Professor David Elmes teaches and runs the Warwick Global Energy MBA.