Why our economic future depends on a bold shift to renewable energy
3 min read
Our economic growth has long relied on fossil fuels, but as the climate crisis intensifies, shifting to renewable energy is essential. Mark Garnier MP highlights the challenges ahead: navigating costs, timelines and technology
Years ago, when I was a young investment banker, a hand drawn chart was faxed around the dealing rooms in the City (the internet was still a decade away). The X-axis showed time; the Y-axis, economic growth. The chart had a line running parallel to the X-axis, very low, until halfway along where it massively spiked, before returning to its low, flat trajectory. Someone had handwritten “before oil and gas” to the left of the spike and “after oil and gas” to the right. This image has stuck with me for nearly 40 years.
This was in the very early days of awareness of global warming, but it made an incredibly important point: our economic growth has relied entirely on energy from fossil fuels.
Forty years later, we are embedded in the debate over net-zero, carbon neutrality and the climate crisis. But when I listen to all this, I think back to that chart. The reality is that, irrespective of anyone’s views on green energy, we must look to the next generation of renewable energy production to maintain our standards of living.
The argument now centres on questions such as how soon we should act, how much the government should invest, how to bring people along with us, how to manage energy costs and what constitutes green energy.
There are many challenges facing our transition to renewable energy, and many rabbit holes. For example, carbon capture, usage and storage (CCUS).
There is no doubt there are industrial processes that absolutely have to emit CO2. So, we must find a way to capture that CO2 and store it. But should we be using the same
CCUS technology to make ourselves feel better about some energy production? The Drax power station uses wood pellets − a renewable source. But we now realise that the cycle on wood chips is, at the very least, 50 years, and some forests being cut down will take longer than that to regenerate. So, we make ourselves feel better by increasing the cost of this energy production by using CCUS, in the knowledge that it probably makes little sense. But consumers pay the price and so, at a practical level, resist higher bills.
Meanwhile, the government suggests it will increase windfall taxes on UK gas producers and moves to restrict the amount of gas produced in the North Sea. That sounds like a good idea until we find the UK producers are taxed out of the North Sea. This reduces tax revenues to zero and increases carbon emissions because we import the energy from more distant sources.
We need energy that gives us both baseload, and dispatchability − that ability to turn it off and on. Wind and solar is unpredictable (and expensive − we even pay them to not deliver under the curtailment scheme).
“There is no doubt there are industrial processes that absolutely have to emit CO2. So, we must find a way to capture that CO2 and store it”
I remain an energy optimist. We have some extraordinary people in the UK continuing the legacy of this great country’s engineering talent. Nuclear fusion is moving forward, while space-based solar power − beaming energy to the ground from orbital solar farms − will be delivered within the next couple of decades. Geothermal, tidal and other technologies are moving forward. But for us to maintain this lead, we need a government that embraces our brilliant scientists and engineers.
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