The Government has got its energy policy priorities fundamentally wrong. In its fight to reduce energy costs for consumer and industry, it has lost its way.
Ministers are backing expensive gas and nuclear projects while undervaluing potentially cheaper decentralised energy supply, based on renewables and smaller scale power-generation technologies.
Decentralised energy generation on factory locations is key to the development of sustainable food and industrial production, as part of the emerging circular economy. By removing incentives too early, the Government is undermining the efforts of British industry to become more sustainable.
Some companies such as Nestlé and Diageo are sharing their successes within their sectors. Both are using an innovative, British renewable technology to convert production residues into on-site renewable energy. This will cut their residue disposal costs and waste water clean-up costs, while supplying base load and low-carbon energy to the grid.
Other early adopters are leading the way with investment in on-site technologies such as solar, biomass and anaerobic digestion (AD) to cut consumption of fossil fuel-derived energy.
These innovators are showing manufacturers how they can play their part by turning their production residues into valuable biogas. This will help our ungrateful Government to reach its renewables and carbon reduction targets.
But ill-thought out ministerial intervention is removing access to renewable energy incentives. Limiting support for small-scale plants is undermining development of on-site renewable energy and the ability of British food producers to compete on the global stage.
The recent decision to provide billions of pounds in subsidies to the French and Chinese for nuclear power plants is crazy. The decision contrasts starkly with the way the Department of Energy & Climate Change (DECC) is failing to support British renewable energy companies by removing incentives. This will lead to engineering job losses at a time when developing our manufacturing and boosting economic growth is a priority.
DECC should be supporting investment in decentralised energy production, particularly in the food sector, farms and rural communities. The generation of biomass-based heat and power on industrial and similar sites can enhance sustainability and reduce greenhouse gas emissions.
Such a smaller scale energy sector is being ignored by the Government. There will always be a requirement for large, centralised power generation – whether by clean coal, gas, nuclear, offshore wind or tidal – but such solutions must be matched by investment in smaller scale renewables.
They can supply energy at the point of use based on locally available feedstocks, as can power sources such as hydro or ground source heat, plus the development of micro-generation systems and novel battery technologies.
There is a range of opportunities, but the commercial sector needs a stable and supportive renewables policy framework to encourage investment and development of novel solutions.
Despite the positive reaction of energy secretary Amber Rudd when she saw AD technology in action at Nestlé’s Fawdon factory in March this year, where it is saving them 8% on its energy spend, the Government has failed to engage with British technology suppliers. When will it listen to those of us who are investing in our companies, creating jobs, generating growth and looking to develop export markets on the back of UK technology and engineering?
Thousands of food factories, farms and rural communities could be using sustainable fuels such as wood, food or other residues to power biomass and on-site AD systems if the Government chose to stimulate the market.
Will DECC start to back British innovation rather than providing taxpayers’ cash to overseas technology suppliers of gas and nuclear power stations? British renewables companies simply need a level playing field and limited taxpayer support, because it already has the expertise.
Richard Gueterbock is director of Clearfleau