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The age of energy subsidy is no longer affordable

Lord Redesdale on new ways of looking at infrastructure

There is a major problem with Britain’s infrastructure: privatisation has left an enormous problem that is little talked about but has massive implications for the cost of energy to consumers and Government policy.

Since privatisation there has been 20 years of sweating our infrastructure assets, as a result of which the electricity and gas grids are desperately in need of enormous infusions of capital. Figures as high as £500bn for the electricity grid and £200bn for the gas grid have been used at recent conferences, but there is no clear policy framework on how to find these sums. At the same time, climate change and the reduction in carbon are making the need for this investment imperative.

“Replacing an ageing infrastructure could drive a new way to manage our resources”

But how is this major investment to be achieved without a massive hike in energy prices? The answer is quite clearly that the age of cheap energy is over.

Fuel poverty will affect a growing proportion of the population. But even if it were possible, is greater capacity and cheaper supply the real answer to this problem? It could be argued that our insatiable desire for power and generating capacity needs to be reversed and society forced to re-evaluate its priorities.

The need to replace an ageing infrastructure could drive a new direction for the way we manage our resources and energy grids. A classic example of this will be the development of the anaerobic digestion (AD)gas network. During the next 10 years, around 1,000 plants will spring up around the country, organic waste will be diverted from landfill into these plants and the digestate will be spread back on to the land.

The interesting point about this example is that, although it will be an integral part of waste management, potentially producing 20% of Britain’s domestic gas and having a major impact on our gas supplies, it will quite possibly go unnoticed by the public. Issues that today cause vociferous objection, such as kerbside collections, will become a part of every day life. Although there maybe challenges at the start, as AD becomes a social norm, as it has in Germany, the complaints will not be about the need to separate waste but the unsociable nature of those who fail to conform.

The enormous amount of work that needs to be undertaken to make sure that the lights don’t go out will not be solved by one silver bullet, such as bringing a fleet of nuclear power plants online, because nuclear power can only really start having a serious impact on the generated mix in the 2030s.

It is only by taking a holistic approach that the country can meet its energy targets. This means incorporating elements of the decentralised energy philosophy, massively increasing energy efficiency linked to a social reappraisal of energy use, using renewables such as onshore wind, AD and wave power, and vastly decreasing our energy consumption. The challenge that faces the coalition Government is how to keep energy affordable, the lights on and the carbon cost down.

In an age of austerity and cutbacks, a completely new approach to all elements of the energy stream, including waste, may mean that a lack of money will force a new way of looking at the problem.

Lord Redesdale is chairman of the Anaerobic Digestion and Biogas Association

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