Written by Dale Edwards, strategic guide – inexperienced power and ESG, Clarke Willmott
“Eight thousand years earlier than the Targaryen Conquest, a winter often known as the Lengthy Night time descended up on the world, which lasted a complete technology.”
Rising power prices, inflation at ranges not seen for many years and new financial institution base charge rises have led to forecasts {that a} Recreation of Thrones-style “Lengthy Night time” is in prospect for the UK.
Whereas this doomsday state of affairs could also be exaggerated, there is no such thing as a doubt that the economic system is heading into uneven waters and that there’s a want for an even bigger function for renewables in our power combine.
It was pleasing that inside days of Liz Truss taking workplace, the brand new authorities introduced plans to supply a two-year power invoice freeze for households, together with a six-month scheme for companies and different non-domestic customers.
Whereas that is welcome, that is primarily based on the everyday family not having to pay greater than £2,500 a 12 months, which continues to be considerably larger that it was in 2021, at circa £1,300 a 12 months. Householders in power inefficient properties or these reliant on oil are prone to be disproportionately affected.
In the meantime the enterprise homeowners I communicate to say that extra element is urgently wanted on what this package deal will really seem like – and that six months will not be lengthy sufficient when attempting to plan for the brief to medium time period, with some tough selections having to be made very quickly.
In opposition to the backdrop of the warfare in Ukraine, it’s comprehensible that the emphasis has shifted in the direction of power safety with issues about blackouts and “brownouts” rising in frequency within the UK and throughout Europe.
It will be logical to suppose that UK-based clear power may have a major half to play in power safety in the long run, however with renewed conversations going down round fracking and “new oil” to bridge the hole within the short-term, reassurance is required that we’ll not be blown off target in reaching web zero.
In some respects the choice to take away inexperienced levies from power payments for a interval is counter-intuitive, however the authorities intends that these levies might be collected by means of taxation for at the very least the subsequent two years.
As well as the federal government has signalled {that a} new voluntary contract for distinction mechanism would allow present renewable technology at decrease costs. As with all new initiatives the satan might be within the element, with many questions nonetheless to be answered.
There are challenges forward which might be devastating for some companies, and uncomfortable for a lot of others. Over the approaching weeks and months, it is going to be attention-grabbing to see how the federal government addresses the power disaster to make sure that the UK avoids a Recreation of Thrones state of affairs from creating.
Vitality costs are prone to stay excessive for quite a lot of years and whereas among the apocalyptic recommendations of a “Lengthy Night time” lasting a complete technology are broad of the mark, some urgency is required to incentivise builders by eradicating or enjoyable the obstacles to development in clear power.
