european union

Professor Jim Skea CBE Hon FEI – EI President

2016 presented challenges and marked big changes, for the UK as a whole and for the energy industry as a key part of the British economy. I hardly need to mention the Brexit vote, a new Prime Minister, the merging of the Department of Energy and Climate Change into the new Department for Business, Energy and Industrial Strategy and the US elections to evoke the deep uncertainty that has characterised the past year.

One month into 2017, government, industry and the Energy Institute are looking ahead and trying to answer some essential questions: what changes are needed in the energy industry, how can policies help achieve the desired change, and how will these changes impact us today, next year, and in 5 years? What are the priorities moving forward?

Now is a pivotal time for UK policy development, which faces big challenges and also significant opportunities: negotiating the UK’s exit from the EU, the formation and implementation of a Modern Industrial Strategy, carving a path to make good on the UK’s Paris Agreement commitment through a new Emissions Reduction Plan, and setting a global example by leading on climate action.

Evidence is essential to policy makers as they tackle the complexity presented by these challenges. How to meet emissions targets, while improving the competitiveness of UK industries, in a scenario where the UK is expected to leave the EU single market? . Consultations, such as that just opened on BEIS’s approach to industrial strategy, are one way that policy makers tap the knowledge and expertise of those on the ground in the energy industry. The EI’s Energy Barometer is another unique opportunity, offered to only a selection of EI members each year.

By gathering evidence in the Energy Barometer questionnaire, the EI acts as an honest broker of the views of energy professionals about the challenges, opportunities, and priorities facing the UK’s energy industry. Our members have in-depth knowledge because they experience the industry first hand. Those who provide views and opinions through the Barometer include seasoned industry experts as well as those with fresh eyes who have started careers in energy only in the last 5 years. All of them offer insights otherwise unavailable to policy makers.

EI members thus have a unique opportunity to provide an invaluable input to the policy- making process. By participating in the Energy Barometer, they are helping to ground energy policy and industrial strategy in their own experience. The survey has been sent to College members in the first week of February. If you are invited, please don’t miss this chance to provide vital evidence which is needed and wanted to inform policy decisions.

Professor Jim Skea CBE
EI President

Energy professionals are a pretty diverse lot: engineers, managers, planners, finance people, lawyers and others. Lots of different perspectives but some remarkably convergent views have emerged from the 2016 Energy Barometer survey of 438 members of the Energy Institute. And the points on which they agree could be seen as some of the most contentious.

On Brexit, an overwhelming majority of contributors foresee negative effects on the UK energy system, especially in relation to securing energy supplies, renewable energy development, climate change and sustainability, and air quality. On the biggest challenges facing the energy sector, lack of continuity in energy policy, closely linked to investment obstacles, came out easily as the number one concern.

Scepticism that politicians’ appetite for ambitious climate targets is matched by their capacity and/or willingness to deliver marks a third area of striking consensus. More than 70% believed the world would warm by more than 2°C, regardless of the even more ambitious Paris agreement. And more than half thought the UK would fall “significantly” short of its own 80% emissions reduction target by 2050. Closer to the present day, there was also scepticism about the UK’s ability to meet its 3^rd, 4^th and 5^th carbon budgets. However, my personal view (and I was one of the randomly selected Barometer participants) is that the UK will easily meet the 3^rd carbon budget through Alice in Wonderland net carbon accounting and interactions with the EU Emissions Trading Scheme (should we remain part of it).

A final area of consensus, and one close to the Energy Institute, lies in the perceived shortage of skilled workers across all parts of the energy sector except North Sea oil and gas and fossil fuel electricity generation. Nuclear is seen as having the greatest shortage in skilled workers, both today and in five years’ time.

It is not all consensus of course and, if there were, the value of the Barometer would be diminished. For example, there is a range of views about prospects for gas and electricity prices, with more of a balance between those who thought prices would rise, those who thought prices would fall and those who thought they would stay roughly the same. But there is a tendency for more respondents to foresee electricity rather than gas prices rising as a result of investment needs for infrastructure and low carbon supply.

So what have we learned as an institute from conducting the survey? First, our members are enthusiastic and ready to contribute their expertise to the public debate. Second, that government and other stakeholders are ready to listen. We are launching this year’s report as part of the Energy Systems conference, organised with our partners at Elsevier. The 2016 Energy Barometer project, led by Dr Joanne Wade FEI, Chair of the Energy Advisory Panel, looks like a big success that builds on the 2015 launch of the Barometer. Who know what will happen in the next year (or even on the next 10 days)? But the world will listen if Energy Institute members voice their views again in 2017.

Energy Institute blog

Creating a better energy future

Energy Barometer – professional insights for robust energy and industrial policy

Diversity and convergence: the 2016 Energy Barometer

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