The UK's energy market is probably the most liberalised in the world, which has been good for cost, but not for carbon. That's going to change with big interventions planned by the government, whose consultation ends today.
So yesterday was a good time to meet the people who keep the lights on. The Association of Electricity Producers, a trade group representing the big six UK electricity generators and others, invited me to their monthly communications meeting for a chat. David Porter, CEO of AEP, was there along with people from some of the UK's biggest electricity generators.
I challenged them on the fundamental contradiction inherent in asking energy companies to take the lead on home energy efficiency, the problems facing new entrants to generation and the difficulty of public companies face in taking a long term view, as well as discussing planning, the national grid, the solar FIT fiasco and more. The replies were open and interesting.
Here's some of the points made:
• All agree that the unit cost of electricity will rise, whatever future path is taken. That is a point often lost on those dumping on the initiatives that raise bills while making the energy supply cleaner and more secure. There is a breakeven, as I reported here. And bills don't have to go up if users get more efficient.
• The profit margins on energy services - repairs, efficiency measures etc - are much better than those on electricity itself, providing some incentive to deliver energy savings.
• Public companies need shareholders who are in it for the long term if they are to be able to make short term sacrifices of profits for longer term gain. One person mentioned five years as being long-term - I was thinking 20 years.
• The changes to planning and the localism bill will increase delays for local energy schemes, the group thought, but probably not for the big projects
We've got a really spiky and insightful analysis on the electricity market reforms coming tomorrow, as well as more on the Green Investment Bank. I'll also write about the various green initiatives we've seen in the last few days, so let me know what you're reaction has been to them.
(This is a trial of a shorter post, of which I could do more. Let me know what you think of it too.)
