Progress | Centre-left Labour politics

A revved-up energy policy

Experts are predicting that oil prices will spike around 2014-15, as the oil reserves built up by OPEC during the recession get used up. While many households are stretched by the current $100 a barrel price of oil, by 2015 prices could be heading towards $185.

Unless something dramatic happens in the meantime, by the time of the next election, ordinary families might be facing a real struggle to heat their homes, put food on the table and get to work each day. Going into the next election, Labour’s energy needs to be big enough to meet the scale of this problem. Tweaking the current system with a few nuclear power stations here and wind turbines there just won’t do. Our energy policy will have to be huge and ambitious, underpinning everything we say and want to do, showing clearly how Labour has a plan for a brighter new future.

So what would such a revved-up energy policy look like? First, we will have to face up to the immediate problem of prices, offering help to the poorest families and breaking the big-six’s stranglehold on the domestic market to drive down bills. We should also have a very clear idea about how we will help households cope in the longer term – ideas like the no-bill or low-bill home (a house that is insulated and generates its own energy, such that it has little or no reliance on external energy supplies) are compelling, simple and ambitious.

Second, we need plans to renew our energy infrastructure. We cannot afford to base the new economy upon wasteful and outdated energy infrastructure, built for an industrial era almost 100 years ago. When energy was ‘too cheap to meter’ it made sense to build a network around a handful of big, remote power stations, but it’s incredibly wasteful – a shocking 65 per cent of energy going into the system is lost as heat in generation and transmission. Today we need a new, more efficient network, where energy is produced nearer to where it is needed, where heat isn’t wasted but used to heat homes and offices, where smaller, community-scale renewable generation is accommodated and where gaps in renewable supplies can be smoothed out by being part of a European supergrid.

Third, our policy needs to change the relationship that citizens have with energy now that it’s such a precious commodity. As I’ve argued before, introducing a ‘community dividend’ so that communities can ‘own’ a stake in energy production and ensuring feed-in tariffs continue to work for community and cooperative scale energy projects could enable communities to share in the profits and help tackle fuel poverty. More importantly, just as homeowners make decisions about their homes for reasons not just financial, a community stake could also help change the role and perspective of energy companies – taking their long-term responsibilities for the energy infrastructure, their charging structures and their impact on the environment more seriously.

Finally we need large-scale investment in research, development, demonstration and rollout of low-carbon technologies, to help drive down the price of renewables. While the current Tory-led coalition government is cutting the UK’s R&D budget, the United States has promised $17 billion, with China, France and Germany outlining similarly ambitious plans. At the same time, it is becoming increasingly clear that with the twin pressures of energy security and climate change, moving the country to a low-carbon energy system first will not only secure their energy future, but their global competitiveness too.

It might all sound expensive, but in the run-up to the next election we have to argue that missing the jobs this investment will create and losing our in the global marketplace will be condemning the UK to an insecure and economically vulnerable future – a price we simply cannot afford.


Melanie Smallman is a former Labour councillor and PPC, and blogs at Big, Red and Green



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Melanie Smallman

is co-chair of SERA


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