“The country needs certainty.” That was the weary battle cry from prime minister Theresa May as she re-entered Number 10 having seen her aspirations for a landslide majority obliterated. Instead, her slender majority was wiped out, forcing her to form a minority government propped up by Northern Ireland’s Democratic Unionist Party (DUP).
At a critical time for policymakers, influencers and stakeholders in the UK energy sector, the general election has provided exactly the opposite to what the prime minister promised. Uncertainty and volatility abound, which could hardly have been imagined a few weeks ago.
The environment gives new significance to Utility Week’s Energy Summit, which is being held in London on 29 June. The event will gather prominent industry captains to discuss the policy and market challenges faced by energy infrastructure firms and generators in the immediate and medium-term if the UK is to achieve its long-term ambitions for sustainable, cost-effective decarbonisation.
Crucial talking points must now include the diminished potential for a “hard” Brexit and the UK’s fragile negotiating position, despite the Conservatives’ attempt to ballast their authority via a Northern Irish alliance – a partnership which itself might add a new dynamic to energy policy, with Ireland’s single energy market and interconnection potentially rising up the agenda.
Likewise, the likelihood that a minority government may result in another general election, perpetuating delays to key policy statements including the Clean Growth Plan, the industrial strategy, the smart and flexible energy systems consultation, and more, needs to be acknowledged. How can industry accommodate such disruption and keep moving forward?
The imperative to do so is pressing. The UK’s energy transition is at a critical stage, with tipping points anticipated for the development of demand-side flexibility and electric vehicle deployment, and with renewable output breaking records with increasing frequency.
More positively, many industry commentators welcomed a Conservative manifesto pledge to conduct a review of the cost of energy in the UK, and despite the turbulence of the election result, energy secretary Greg Clark has already confirmed this will go ahead.
The review should bring a welcome honesty to the debate about the cost of decarbonisation and the cost of generating energy in the UK. But it will also bring scrutiny, of network returns as well as their charges and innovation funds, which are levied on consumer bills. How should industry prepare for this?
The Energy Summit will provide an opportune moment to partake in informed debate on these issues and share insights to help the sector navigate murky waters.
Who’s who
Our chair this year is BBC environment analyst Roger Harrabin, who will steer dialogue and debate around:
• UK energy policy post-election.
• Implications of Brexit.
• Delivering a smart, flexible energy system.
• Maintaining investor confidence.
• The role of innovation in meeting carbon reduction targets.
Speakers speak out
Keith MacLean, chair, UK Energy Research Centre
“Any remaining doubts that short term political timescales are not well matched to the long-term nature of the energy business have been confirmed by the election.”
David Cockshott, chief commercial officer, Inenco
“In this period of uncertainty it is important to have continuity. We appreciate that after the election result, there are some huge strategic priorities for the government to address, but energy must remain a focus.”
Keith Anderson, chief corporate officer, Scottish Power, and chief executive, Scottish Power Renewables
“The new government in their policies and Brexit negotiations need to be seen to be creating opportunities not threats.”
Phil Sheppard, Director of SO Operations, National Grid
“Regulation will play a part but it is incumbent on those in the market to collaborate to co-create and co-develop services that are necessary for the market and us as the SO to operate the system effectively, efficiently and securely.”
Felix Lerch, country chairman, UK, Uniper
“We would like to see continuity with respect to government policies and the implementation of measures that remove market distortions.”
Hugh McNeal, chief executive, Renewable UK
“To maintain our world-beating offshore, onshore and wave and tidal sectors, we urge government to ensure a stable policy framework. With relatively simple support, in these unprecedented political times, renewable energy stands ready to deliver.”
Other speakers will include:
Vincent De Rivaz, chief executive, EDF Energy: focusing on long-term energy vision, De Rivaz will address balancing affordability, decarbonisation and the security of supply.
John Morea, chief executive, SGN: addresses how to deliver a smart, flexible and integrated energy system, as well as the challenges ahead for UK energy and climate change policy.
Dermot Nolan, chief executive, Ofgem: also looks at tackling the best way forward for long-term energy planning, including the implications of politics and climate change.
Basil Scarsella, chief executive, UK Power Networks: considers the future of energy in the UK, addressing innovation, climate change policy, and investment.
Adam Cooper, policy and engagement director, National Infrastructure Commission: looks into the energy revolution and future challenges for the industry, bringing electricity, heat and transport into one strategy.
Talking points
1. Long-term energy vision in the UK
The likely implications of Brexit for UK energy and climate change policy; how affordability can be balanced with decarbonisation and security of supply; and how targets can be met while maintaining good value for consumers.
2. Delivering a smart, flexible and integrated energy system
Discussion will centre on the energy revolution and future challenges for UK energy and climate change policy; unlocking the potential of energy storage and demand-side response; and bringing electricity, heat and transport into one strategy.
3. The role of renewables
How will the UK meet its 2050 carbon reduction targets? Unlocking the potential of wind, solar and tidal power will be discussed, alongside the future of biomass.
4. Innovation and investment
Delegates will consider what innovation is needed for the UK to meet its carbon reduction targets; and how markets, investment and regulations can drive sustainable energy; as well as how to maintain investor confidence.
5. Ensuring security of supply in the short to medium term
Presentations will cover the challenges of achieving a balanced energy portfolio and ensuring security of supply in the short to medium term – including the role of unconventional resources (such as shale gas) in the future energy mix.