Target-Driven Madness: UK Energy Policy

I want us to develop greener and cost-effective energy, but the targets designed to achieve that perversely have the opposite effect. If we weren't mismanaging energy so badly, perhaps we could find means that don't cost the earth - in more ways than one.

Perhaps nowhere is the short-termism of British politics better seen than in energy. Here, the Left-Right divide is stark but utterly meaningless. But perhaps the concept of Left and Right is outdated since the rise of Ukip, a Party with a blend of traditionally right-wing and traditionally left-wing thinking combined under the umbrella of common sense.

With energy, it is the Right which seems to be concerned about the cost of energy to working people; the Left, about meeting arbitrary environmental targets irrespective of cost. Just like Ukip's approach to crime (which cuts through the old Right-Left deterrence-rehabilitation argument by seeing criminal justice not as a choice between the two but as two sides of the same coin), our energy stance cuts through the political spin. We are derided for it by an established political class which is bereft of its own new ideas. This article, though, is my own personal thoughts rather than a statement of Ukip policy.

Biomass is a textbook example of target-driven government policy missing an open goal. When a tree in the UK is cut down, it needs to be dried out (up to 50% of the weight is likely to be water due to our wet climate) and then processed. Pretty much every part of the tree is useful for something. Even sawdust can be used for example in the production of chipboard.

Whatever the wood itself has been used for, at the end of its life it can be recycled. Once the nails and other contaminants have been removed, it can be used again. At each stage of the process, there will be some dust which isn't really suitable for making anything. It might be that, on average, the same piece of wood could be used and recycled six times. In that time, it has perhaps been an internal door, a kitchen surface, laminate flooring and a chest of drawers.

I recently visited a factory in my constituency, Egger, Northumberland's largest manufacturing employer. They are a wood panel manufacturer which creates high quality products and uses plenty of recycled wood to do so. Before government subsidies were available, they found a use for the leftover dust: they built their own biomass plant which is used to power and heat the factory. They have efficiency rates of over 90%. This kind of process is efficient and environmentally-friendly, business-driven and highly successful.

Then the UK introduces a target (coming from my least favourite supranational institution) that 20% of our energy should come from renewable sources by 2020. In order to make that happen, the government has to subsidise new sources of power including biomass. Suddenly everyone wants to open a biomass plant.

They chop down trees and use them as a source of fuel. No drying, no recycling and no joined-up thinking. The efficiency rates are far lower - and some plants only use it as a source of power, losing the heat altogether. They create a demand for more wood, which can't immediately be supplied because it takes perhaps 30-40 years for a new tree to grow to maturity. The supply/demand equation having changed, the price of wood goes up. That might be great if you own a forest - such assets have returned 10%+ returns on investment for years - but isn't good for any industry involving wood.

So whilst the green lobby tells us that the biomass industry creates jobs, they never provide an estimate for how many jobs are lost due to the cost of government subsidies. Or how many jobs are lost due to the price of wood being higher than necessary, hitting an entire industry and raising prices for consumers.

Compare the examples before and after government subsidies. The former was incredibly green and efficient; the latter involved massive waste. But no-one seems to care about the waste because they can all point to the progress made towards an artificial target.

The similar problem with wind energy is better known: the wind is unreliable, blowing one day but not another. If you can't rely on an energy source, it can't form a major part of the national grid. If you still have to rely on conventional power, you're not really lowering carbon emissions. So we need the storage problem to be solved: ie. to find a simple, efficient and cheap method of storing the power to smooth out the peaks and troughs. It makes sense, then, to deal with the storage problem first and only then to introduce wind power. In that time, the price of wind power is likely to have come down.

Again, the subsidies are paid for by the taxpayer - and whether it comes through general taxation or extra money on your energy bills, you still end up paying. I don't oppose wind power as an article of faith, I oppose it because the technology doesn't stack up. Again, the higher energy prices cost jobs (but we're only ever told about the jobs created - most of which are temporary during the construction phase anyway). Wind power isn't having a major impact upon carbon emissions but it is costing us all lots of money. It may well help us to progress towards an EU target, but it's not actually helping the environment.

In the short term, I'm relaxed about producing our own conventional power through fossil fuels. Why? Because we're already importing fossil fuels. We're not making things worse if we do so (although admittedly we're not necessarily making things much better). And carbon capture technology would allow coal power, for example, to have a much lower environmental impact than it used to. As for fracking, perhaps with the price of a barrel of oil falling below $50 it may temporarily be less economically viable. But it should be for the local people to decide, not through a typically meaningless government consultation but at the ballot box through a local referendum, whether they want it in their area.

In the longer term, the key is research: no-one wants to oppose the use of renewable sources of energy. We just need to get the right technology - and artificial government subsidies are the opposite of that. They make unviable strategies into temporarily viable ones. That's not a sustainable way to proceed. Government intervention is leading us down a blind alley in our energy policy.

My personal instinct is that the problems with tidal power are by no means insurmountable. Much work has been done, amongst other places, at Southampton University on this. I don't think we're a long way away from a cost-effective, clean and efficient method of exploiting the waves to generate electricity.

I want us to develop greener and cost-effective energy, but the targets designed to achieve that perversely have the opposite effect. If we weren't mismanaging energy so badly, perhaps we could find means that don't cost the earth - in more ways than one.


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