Restless disposition in energy policy

Ian Marchant

Ian Marchant FEI Immediate Past President

In preparing for a conference on energy policy, I came across this quote from Walter Bagehot – ‘If you keep altering your house, it is a sign either that you have a bad house, or that you have an excessively restless disposition – there is something wrong somewhere’. As a constitutional expert, he was talking about the problems of Government in the 1800s but his comment is so true today.

It was the phrase ‘restless disposition’ that caught my eye, as it is theme that Professor Anthony King uses in his book, Who governs Britain, to describe one of the problems with 21st century politics.  All new ministers want to make an impact; want to be seen to be doing things; want to make announcements that attract headlines. They are always in a hurry.

Energy policy has been a notable victim of this syndrome. This century we have already had nine ministers with cabinet responsibility for energy (counting both DECC and the various forerunners to the Department for Business). It’s even worse at Minister of State level where we are on number 14.  All this change means that the new minister, who arrives with a restless disposition, is also in a tearing hurry as they only have one to two years to make their impact; less time than it takes to build any assets in the energy industry. This timescale precludes thoughtful consideration, proper consultation and assessment of the impact of any change on the whole energy system before action, and completely rules out any learning from the results of previous activity.

The civil service used to act as the brakeman to the ministerial bobsleigh but senior officials change almost as often as ministers and rarely build up expertise in one policy area, seeming to need to switch departments to get promotion. It is no wonder that we have such a patchwork of interventions and plethora of changes and amendments and no wonder that we do not have a joined up, robust energy policy. We are getting what the politicos system is designed to produce – ‘something wrong’ to quote Bagehot.

And EI members agree with me. The EI’s inaugural Energy Barometer  survey reports that EI members see policy continuity as an essential component to reduce investment risk and encourage a longer-term view.  In fact, EI members deem it to be one of the biggest challenges facing the energy industry in 2015. The complexities of the energy system require clearly communicated policies that are consistent over time and with each other.

If we are to have a thought through, robust and enduring energy policy we need a fundamental change to the governance and political arrangements that determine this policy. The stability, longevity and independence of the Governor of the Bank of England is the sort of role we need. And no; I am definitely not interested in doing that job!

 

The Government’s first 100 days (…or thereabouts)

Professor Jim Skea CBE EI President

Professor Jim Skea CBE
EI President

Well, 125 days on my reckoning but the EI  is only slowly instilling some discipline into its new President.

Looking back at the Energy Barometer, which we published just after the UK General Election, the strongest message from EI Fellows and Members was the call for policy clarity. We’ve had a rapid sequence of announcements on renewables and energy efficiency since May, each of which is clear enough on its own. But taken together, the package has left a deepened sense of uncertainty about where things are going.  As I argued in a piece in the ENDS Report, we need a high-level clarification of what energy policy is trying to achieve. How are the three strands of energy policy – climate, affordability and security – woven together in the Government’s view?

The policy landscape had certainly become unnecessarily cluttered. Geological layers of policies that overlap, interact and contradict have accumulated. A spring cleaning of the policy cupboard is overdue, and some of the recent announcements make eminent sense in terms of good governance. Strictly zero-carbon homes are a mirage if realised through offsite “affordable solutions” that could have been better procured by other means (but don’t throw away the baby with the bathwater by weakening efficiency requirements!). Few will lament the passing of the financial model that underpinned the Green Deal. But there is a sense of confusion as to whether the Government is pursuing “better regulation” or rolling back the low-carbon agenda, the latter conclusion being the one that many may draw. Meanwhile, away from the domestic energy policy scene, the Government remains upbeat about its ambitions for this year’s Paris climate conference.

Perhaps the clearest message since May has been the unambiguous support for shale gas. Unfortunately, central government and local government are not singing from the same hymn-sheet, as Lancashire County Council demonstrated when they rejected Cuadrilla’s planning applications in June. Whatever central government says, this creates uncertainty for investors. And anyone could feel confused by the government’s approach to local energy decision-making – does central government have the last word (shale gas) or do local communities (wind)? Wise investors recognise that sociology as well as geology is an important development criterion. If anyone succeeds in taking forward shale in the UK, it is likely to be the company that chooses development sites in areas with an industrial heritage and businesses that can benefit from lower energy prices.

The pressing need is for the Government to articulate the overall aims and philosophy of its energy policy. And, as Steve Hodgson argues in his most recent Energy World editorial, it’s the ‘sustainable energy agenda’ – renewables and efficiency – that has been buffeted most by recent announcements. In building confidence, my own priority would be the management of the Levy Control Framework which caps subsidies for renewables and energy efficiency. Whether this constraint bites or not is hugely dependent on volatile wholesale energy prices. Clarity about how the government intends to respond to that volatility is top of my list. And a comment on Hinkley Point developments would also be good. “DECC says no fears of Hinkley delays, despite review” was the headline in Engineering and Technology Magazine last November.

Experience is something not easily transferred but must be keenly shared

Louise Kingham OBE FEI Chief Executive

Louise Kingham OBE
Chief Executive

The EI’s inaugural Energy Barometer report of members’ views on the industry’s important future challenges identified that developing a pipeline of energy professionals was a key concern for those at the heart of the energy industry today.

Respondents emphasised the urgent need to maintain the supply of skilled workers into established and developed sectors. They also express the need to preserve and transfer the knowledge of those preparing to leave the industry to a new generation. This is much talked about as an issue and there are some great examples of good practice within a number of companies in the sector, but it is incumbent in my view for every experienced energy professional to keenly share their knowledge and offer guidance to those that will succeed them. This way we ensure experience isn’t lost and good practice is shared.

As hosts of the POWERful Women initiative we have just launched POWERful Connections – a mentoring scheme led by CEOs in the industry to support those looking to lead the industry in the future. I was delighted with the overwhelming support we had from CEOs we approached to be mentors but interestingly those who could be mentored were not so ready to jump forward without encouragement. Currently we also support individuals with a mentor to help them achieve professional membership. Great support for the early professional and a complement to a mentor’s own CPD. These are two examples of what we do, however, we recognise that more needs to be done and we have plans to expand our offering to energy professionals here because support is needed across all demographics and for those returning from career breaks or with transferable skills from other industries.

As well as each of us encouraging others to be mentored and offering our support to do so we also need to develop programmes that are flexible, practical and light on administration to make them effective. As recognised energy professionals, please feel free to get involved.

Past, present and future

Ian Marchant

Ian Marchant FEI, President

All good things must come to an end and I am now handing over the Presidency of the Energy Institute (EI) having served two years. It has been a joy and a privilege to have the role and I hope I have been a good steward of our organisation. In reflecting on the two years, my thoughts are about the past, present and future.

We have just finished celebrating our one hundredth anniversary and that included a cake in the Palace of Westminster, a video from the Prince of Wales and numerous dinners and events up and down the country. It is good occasionally to look back and celebrate the achievements of the past, however that phase of EI’s life is over, probably for another 25 years. We have also launched the Energy Matrix, which makes available the accumulated knowledge of over 90,000 records and wisdom of our industry, in a modern digital form.

But enough of the past. We are all members of today’s energy industry and the EI continues to address today’s issues. During the last twelve months or so we have hosted the inaugural Energy Systems conference and our annual IP Week conference, which this year generated a lot of media interest, as well as another 90 events. A new addition to the EI calendar has been the autumn President’s event. In 2013, I hosted a debate and then in 2014 I gave a lecture which, as it was held in a function room at the Hard Rock Cafe, was full of song title puns. We have got involved in new initiatives such as POWERful Women and ESOS, and the first publication under the Energy Essentials banner has been issued. Our technical programme continues to go from strength to strength with the issue of 41 technical guidance documents, the publication of the first G9 offshore wind annual incident data report and further growth in the content of and access to The Journal of the Energy Institute. We have continued to drive up standards and build competencies for the future with the accreditation of 68 energy-related courses in 21 institutions throughout the world.

And talking of the future, as I hand over the reins to the very capable hands of Professor Jim Skea CBE FRSA FEI, I would highlight three foundation stones that have been laid recently. Firstly, we have started the refurbishment of our building to make it fit for the 21st century and to provide better member services. Secondly we have undertaken and launched our first Energy Barometer, which uses the knowledge and experience of our membership to gauge the state of the energy world and to inform policymakers and commentators. Thirdly, we introduced a new EI award category, the Young Energy Professional of the Year, to complement the work of our growing Young Professional Networks.

I believe that the group who met under the leadership of Sir Boverton Redwood a hundred years ago would be proud of what their creation continues to do and in its plans for the future.

The next best thing to knowing something is knowing where to find it ― Samuel Johnson

Louise Kingham OBE FEI EI Chief Executive

Louise Kingham OBE FEI
EI Chief Executive

Why is it that, in this information age we live in, the truth seems ever harder to get to? The facts often seem to either not exist or be buried ever deeper under layers of rhetoric and commentary . My views are probably a little tested after weeks of election campaigning in the UK, but nevertheless I think the point still stands.

So if we still think an evidence base is important – as I and other EI members do –  it’s essential that we step up and provide good quality, clear information that can be trusted. We also need to explain what the information was produced for and how we expect it might be used. This in turn reminds the recipients of the EI’s role as an independent professional society and source of trusted expertise – which is probably not called upon enough.

Two recent contributions from the EI have only just been published – the 2015  Retail Marketing Survey and the second G9 Incident Data Report for safety performance in the offshore wind industry.  Both reports contain a wealth of factual data as well as statistics;  both are designed to offer an evidence base for the state of play in two very different parts of the energy industry – one focusing on the health of a sector, the other on the health of the people within it.

So let me make a suggestion. If you are in need of trusted and useful information think about whether the EI could provide it for you.

The EI Knowledge Service provides a central resource for energy knowledge and information – find out more by visiting knowledge.energyinst.org

A nice problem to have with awards

Ian Marchant

Ian Marchant FEI, President

I have never been a big fan of awards, probably because I never win any! However, last year I was one of the judges for the Energy Institute’s annual awards and this sort of changed my view. I had two, apparently conflicting, emotions. Firstly, I was really impressed with the calibre of many of the nominees and was struck by the obvious evidence of professionalism and achievement. However, the second emotion was that in a few of the categories I was disappointed with the depth of the field as I know from the various roles I have around the energy industry that there is a lot of really great stuff happening and lots of really talented and committed people.

I would single out two particular awards where I would have liked to see a lot more nominees. Firstly there is what is now called the ‘Energy Champion‘ award which is for an individual who has made a significant contribution to our industry. I suspect that one reason for a small field is that people don’t feel they should nominate themselves. I totally agree with this so why not nominate a colleague or contact who has gone above and beyond the call of duty. They could be your energy hero or they could be a rising star, it doesn’t matter; what matters is the impact they have had.

The second award where I would like to see a deluge of nominees is for safety. This is a topic close to my heart and I know that, for most companies in our sector, it is the number one priority or core value. Lots of good stuff is happening, every day, to improve processes, change behaviour and reduce risks. Let’s celebrate this and use the awards to showcase what can be done to inspire others to raise their game too.

So my plea is that we make the job of this year’s judging panel much more difficult by swamping them with loads of examples of the good things that are happening in our industry. This would be a nice problem to have.

The EI Awards are free to enter and the deadline for submissions is 29 June 2015.
For more information, please visit www.energyinst.org/ei-awards