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Synergies and tensionsin UK energy policy

Jim Watson, Research DirectorUK Energy Research Centre

Energy Systems Conference, London, 24-25 June 2014

Energy policy and energy systems

Large scale technology, such as electric light and

power systems, incorporate not only technical and

physical things such as generators, transformers and

high-voltage transmission lines, but also utility

companies, electrical manufacturers and reinforcing

institutions such as regulatory agencies and laws

Thomas Hughes, American Genesis (1989)

Balancing energy policy goals?

Our energy security is best served

by minimising our exposure to the

volatile global fossil fuel markets,

enhancing our energy efficiency

and maximising home-grown low

carbon energy, as well as cleaner

indigenous reserves, such as

natural gas, to help ease the low

carbon transition

Ed Davey, March 2014

Balancing energy policy goals?

Security of supply, affordability, and

playing our part in combating

climate change. And that for me is

the order

Michael Fallon, 2nd Dec 2013

Reducing GHG emissions:good progress, but will it continue?

Source: Department of Energy and Climate Change

CO2 emissions are down 19% since 1990

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

100

200

300

400

Gas Electricity

Inde

x (2

000

= 10

0)

Gas prices have trebled since 2000

Electricity prices have doubled since 2000

Affordability:Domestic gas & electricity prices

But energy has become more expensive:rising prices and bills

Click to add titlePrice rises and fuel poverty

Source: Department of Energy and Climate Change

Energy security is high on the agenda for many reasons: High energy prices since mid 2000s UK’s shift back to net energy

importer Geopolitics and conflicts Impacts of extreme weather Ageing and/or inadequate

infrastructure

Security debates often focus on international risks, but many risks are closer to home

A secure energy system: but can this be maintained?

1980 1985 1990 1995 2000 2005 2010

-200.0

-100.0

0.0

100.0

200.0

300.0

400.0

500.0

600.0

Exports Pipeline Imports LNG Imports Net Imports

TW

h

Source: DECC

Maintaining energy securityFrom gas exporter to importer / trader

A secure energy system? from gas exporter to importer

Tensions between policy goals

Click to add titleTensions between policy goals

Tensions between policy goals

Fracking has become a national

debate in Britain – and it’s one that

I’m determined to win. If we don’t

back this technology, we will miss

a massive opportunity to help

families with their bills and make

our country more competitive.

Without it, we could lose ground in

the tough global race

David Cameron, August 2013

3. Innovation systems & developmentMeeting energy policy goals:a return to energy planning?

The electricity market is disappearing: government making investment decisions Even if this is temporary, need to be aware of the risks and tensions, e.g. We don’t know which low carbon

technologies will be most cost effective

Risks of stifling radical change: demand side response; decentralised generation; a more plural energy market

Heat and transport decarbonisation are even more uncertain: need for experimentation, innovation & learning

3. Innovation systems & developmentMeeting energy policy goals:a return to energy planning?

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Thanks

http://www.ukerc.ac.uk

@UKERCHQ @watsonjim2