With the recent announcement of a review of UK energy policy, and amid increasing concerns over the security of energy supplies, rising domestic energy prices this winter are sure to feature heavily in this debate.

Central to the review is an assessment of how well the government is meeting targets set out in the 2003 energy white paper, as well as identifying necessary policy to measures to achieve longer term objectives.

Recent events in Russia have only served to highlight the importance for action regarding the security of energy supply in the UK. After Russia cut Ukraine’s supply other counties, including France, Germany and Italy reported a drop of pressure of around 30 per cent.

The safeguarding of energy supply can be ensured by a number of different means. The EU is discussing plans to increase its storage capacity, and introduce a system obliging countries to share gas in an emergency.

The government is looking at other forms of energy, e.g. nuclear and various renewable options to negate the need to import large amounts of gas from abroad.

A consultation is due to be launched in 2006.

Summary of stakeholder responses:

Amicus

• Feels the government’s Energy white paper position is too dependent on gas and oil for meeting the energy requirements of the nation
  
  
• Believe in the use of nuclear, oil and gas, coal and renewables. We believe that this energy mix will ensure security of supply well into the future
  
  
• The NDA (Nuclear Decommissioning Authority) must be a success in terms of decommissioning nuclear power plants to ensure a viable future for the nuclear industry. As such it is crucial that the government ensure that it receives the resources and political support that it needs
  
  
• Government targets regarding renewables contained in the energy white paper are too optimistic
  
  
• Costs associated with updating the transmission and distribution system will be very expensive and this will prove extremely costly to the taxpayer
  
  
• They warn that if Flue Gas Desulphurisation (FGD) is not fitted to coal fired power plants by 2008 then it will be difficult to ensure that peak electricity demand is met

Energy Networks Association

• Believes that changes in the fuel mix should not be contemplated without due consideration of the impacts on the transmission and distribution networks
  
  
• Renewable generation sources such as wind will bring a range of changes to networks, including a need to address stability, intermittency, security and plant margins issues
  
  
• Development of nuclear power or new forms of large-scale centralised generation (including gas and coal) plant will have implications for the higher voltage transmission networks through the location and design of new power stations
  
  
• A considerable deficit is developing in engineering skills
  
  
• The bulk of the existing electricity transmission and distribution system was built in the 1960s to meet the needs of a very different electricity generation paradigm
  
  
• Energy policy and how this is reflected in the regulatory regime for networks does not adequately deal with the need to synchronise developments in generation and infrastructure

Institute of Directors

• States that a recent survey of members found that:
  
  49% were either concerned (20%) or very concerned (29%) about the possibility of a disruption in future energy supply to their organisation.
  
  93% thought that over the next 5-10 years energy prices would rise significantly (68%) or slightly (25%).
  
  
• It is estimated that, by 2020, the UK could be dependent for 75% of its primary energy requirements on imported sources.
  
  
• North Sea oil and gas will run out, both in physical capacity, and as far as economically extractable reserves are concerned.
  
  
• In the next 20 years the UK will become a net energy importer, rather than exporter. For gas this may happen from about 2006 and for oil by 2010.

Institute of Electrical Engineers

• Argues that prudent energy policy should aim to safeguard security of supply by maintaining a balanced portfolio of energy options
  
  
• The principle of diversity should apply to the primary sources, the development of technologies, the physical assets, and the knowledge essential to maintain them, in order to ensure the UK’s adaptability to future energy demands
  
  
• The existing market mechanisms may not provide enough long term risk assurance to promote private sector investment in large scale projects or innovative technologies.

Nuclear Industries Association

• Believe the prudent course of action for Britain is a balanced mix of oil, gas, coal, efficiency, renewables and nuclear which will help protect UK businesses and consumers from electricity price spikes as we have recently seen due to rising gas prices
  
  
• Nuclear is a virtually CO2 free source and it is always on – it’s safe and cost effective
  
  
• Nuclear is a large scale, reliable and safe source of electricity
  
  
• 20% of UK’s electricity comes from our nuclear power stations – generating 80% of UK’s low-carbon electricity
  
  
• Nuclear has supplied energy to Britain’s homes and businesses safely, reliably and economically since 1956

Stakeholder positions in full:

Amicus

Energy Networks Assocaition

Institute of Directors

Institute of Electrical Engineers

Nuclear Industries Association