Energy is an indispensable input to UK business. Right across the board, from supply to production to the growing role of consumers and software, Britain’s energy market is transforming. But the changes afoot whilst unstoppable are not cheap. With this in mind, a new paper for the IoD by Dan Lewis, Future-proofing Energy, sets out the case for what the next government should do first with energy policy.
Everything you need to know about what IoD members think about energy
Last year, the IoD surveyed its members about energy and the findings were clear. Seven in ten members thought Labour, Coalition and Conservative administrations since 2001 had all failed to make energy available at a reasonable cost. Two-thirds also worried about energy security, complaining that politicians had not succeeded in ensuring the UK would always have the power it needs. On the other hand, Directors felt energy policy had been more successful in increasing the use of renewable sources (59% agreed) and reducing carbon emissions (45%) – policy goals both of which they were in favour of. And they back nuclear and fracking too.
Top 3 energy policy recommendations for the next government;
- Turbo-charge competition in the energy markets – we don’t want price caps or freezes, but transparent default tariffs overseen by OFGEM, to reduce the number of SMEs who don’t switch and are over-paying for their energy. Reviewing separating the retail market from supply and billing from suppliers should also be on the agenda to potentially lower the barriers to new entrants and the emergence of multi-utility services.
- Deliver cheaper nuclear power for business – nuclear waste is expensive but would be much cheaper with the designation and construction of a Geological Disposal Facility to store it underground and require much lower security and safety monitoring. The nuclear replacement programme also needs much cheaper power than Hinkley Point C. We see the way forward to lower costs is with large auctions, with competing suppliers and building a UK supply chain.
- Review the smart meter programme to save billions – we need smart meters to automate meter reading and facilitate switching. But this programme is so far off track, over budget, beyond the deadline and even continuing to install meters that are not compatible between different suppliers. Now is the time to pause and review the rollout, set out a realistic timetable and identify where savings could be made. Consumers and SMEs should not be expected to continue picking up the tab, every time the costs go up and the project doesn’t deliver the expected benefits.
Ultimately, to stay competitive and prosper, a future government can play a positive role in enabling a more competitive energy environment with these measures within the constraints of a decarbonising world.
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