May you live in interesting times

Ian Marchant

Ian Marchant FEI, President

We are now only a few months away from the UK General Election and, at this stage, it seems to be one of the most unpredictable for a long time, if not ever. In fact, one report that I saw analysed 10 different possible outcomes for who would form the next government covering majority or minority governments for both the larger parties and then a whole raft of different coalitions.

The election is being fought on more predictable grounds with things like the economy and the NHS coming to the fore. Every now and then another topic seems to dominate the media coverage and so far energy hasn’t been one of them. I hope that at some stage in the next few weeks it does get an airing as the new Secretary of State for Energy and Climate Change is going to face some interesting issues in his or her in-tray. I think that the following will be near the top:

  1. How is the UK oil and gas industry responding to the low oil price and what can Government do to create a stable and supportive investment climate? This folder will, I imagine, recommend a quick visit to No. 11 Downing Street.
  2. What will be the outcome of the complete investigation of retail energy supply and how should the government of the day react given that, since the investigation was launched, competition has increased and prices have decreased?
  3. What progress is being made on implementing the recommendations of the Wood report to secure the long term stewardship of the North Sea assets to maximise long term recovery?
  4. Is the much vaunted Electricity Market Reform actually going to secure the UK’s security of supply over the next couple of winters, and then put us on the road to decarbonising the electricity sector in the next couple of decades? This brief should recommend a long, hard and rigorous look at the capacity margin in the next two years.

Of course on the climate change side of the department the issues are no less serious as the new government will be taking part in the Conference of the Parties (COP) meeting in Paris later in the year where the subject of an international agreement on emissions reduction is, once again, on the agenda.

Here things seem a bit more positive in that the leaders of the Conservatives, Labour and Liberal Democrats parties have signed a joint pledge. This didn’t get much coverage as it was swamped by a megaphone debate on tax avoidance so I thought I would provide a link to the agreement, see www.green-alliance.org.uk/resources/Leaders_Joint_Climate_Change_Agreement.pdf

When I step back and think about the next few weeks I am reminded of the alleged Chinese proverb “May you live in interesting times”.

On 3 March, the EI will be hosting a pre-election energy question time in London with representatives from the political parties. This debate will provide delegates with the opportunity to engage in the discussion and express your own views on energy policy issues.

 

Access requires action

Ian Marchant

Ian Marchant FEI, President

I have been reading an excellent report from the Shell Foundation ‘Accelerating Access to Energy’. The statistics are challenging. Here are a few:

  1. Low income households in Africa spend up to 40% of their income on energy.
  2. 1.2bn people lack any access to reliable and affordable electricity and for another 800 million the grid is unreliable and unpredictable.
  3. Half the children in the developing world go to schools that have no electricity.

The Shell Foundation, through many years of experience, have adopted what they call the “enterprise based theory of change”. This has involved identifying and tackling market failures, helping create social enterprises, patient and flexible grant funding and business skills development.

They have now refined this into a six stage process that takes between 5 to 10 years to reach maturity. The first three stages are to catalyse, pilot and create pioneers. The major step is number 4; scale. This involves a mixture of grant money and market revenues.

All these stages require a mixture of philanthropic giving and market activity and over the years I have supported one such charity, Solar Aid, who use a social enterprise, Sunny Money, to distribute solar lights in Africa. I even visited some of their work last year. The primary route to market is through schools and it was really encouraging to hear first hand about the positive  impact on children’s academic studying and health and the parents pockets.

If, like me, your career has been in the energy industry, this sort of thing is a really worthwhile cause to get involved with. There are other similar charities operating in this space and they do a good job.

Sharing energy industry insights

Ian Marchant

Ian Marchant FEI, President

One of the features of the energy industry over the last 100 years has been the extent of innovation we have seen throughout the value chain. As part of that industry, the Energy Institute (EI) must also continue to innovate. To this end, we will be launching a new research and engagement programme in January 2015 called the Energy Barometer.

As a professional body, we have a lot of expertise and experience to be found among our industry membership that we should be bringing to bear on the debates around energy. The aim of the Barometer is to give a voice to the opinions and insight of energy professionals and establish the EI as a credible and trusted source of knowledge.  It will provide a vehicle for members who are industry and thought leaders to help inform debate on energy related issues, demonstrating the value of their knowledge and expertise to government, influencers, our own industry and the public. From a primary focus on the UK,  the Barometer should provide a focal point for debate on the real issues underlying the future energy system challenges.

We hope to use the Barometer as a source of meaningful support to the process of policy development and to create an opportunity for greater engagement between EI members and policy makers. The Barometer will be based on annual surveys covering regular topics for comparison year on year, as well as topical issues.  Data will be built around a series of questions, asked of an ‘EI Research College’ consisting of approximately 600 EI members. Supplementing the insight generated from their responses will be statistical information taken from UK government and other official sources. This will be backed up by commentary and viewpoints from senior industry fellows.

The first annual Barometer report should be completed by the end of April 2015, and we hope to publish it around the time the new UK government is in place next May. The report will be aimed at UK policy makers and senior industry professionals, and will also be sent to selected Members of the new Parliament. We expect media interest and public awareness to be generated by specific insights from the survey.

This whole initiative, however, can not run without the support of members. More details of the Research College will follow – outlining how we would like  you to  participate.  Check out the EI’s magazines and www.energyinst.org/energy-barometer for details.

Making connections

Ian Marchant

Ian Marchant FEI

Welcome everyone, to the Energy Institute (EI)’s inaugural blog posting. In my role as President, I’m looking forward to hearing views and opinions about what’s going on at the EI and the broader energy industry. But, as a seasoned blogger, I am delighted to launch the EI’s blog and hope it becomes a ‘must-read’ in time to come. 

I have spent some time now in the industry – a quarter of a century to be precise – the word that springs to mind when I describe how things work is interconnectedness. We all work in various places, doing different things within the energy industry – but all of what we do is connected to everything else.

Changing the way you tax North Sea oil and gas, for instance, can have repercussions for the electricity system. How you might ask? More tax can mean lower investment which can have an effect on whether or not to invest in offshore wind, and ultimately impact the electricity system. Not to mention direct consequences for our security of supply and indirect consequences for retail prices. This idea of interconnectedness is something that our policy-makers struggle with. Making the links and joining the dots is something policy-makers have got to start doing if we want to avoid unanticipated side-effects and ripples throughout the industry. Targeted and complex policy interventions are not the answer.

The EI is one of the few organisations that genuinely takes an all-energy approach and is raising the profile of this serious issue. The Energy Systems Conference takes place in London on 24-25 June and brings a host of speakers tackling the area of energy systems, together. It is only by taking a systematic approach that we have a chance of understanding what consequences are borne from different policies.

The EI is all about raising the quality of debate and understanding about how our industry really works. It’s not easy bringing disparate, seemingly unconnected subjects together but it’s important and we are striving constantly to make sure that we do.