It appears the energy market is in meltdown, with gas prices shooting through the roof. Some of the UK’s smaller supply companies are facing ruin since it appears they didn’t sufficiently ‘hedge’ their future contracts and were offering consumers unrealistically low prices (how else do you build market share?). The problem with our energy supply is not just the result of a market blip as ministers would have us believe but a long-term lack of attention by governments of all stripes. This complacency is partly the consequence of an over-reliance on a ‘hub and spoke’ distribution model which requires large generators, such as nuclear. This model naturally concentrates more influence in the hands of a powerful political lobby, in which it has to be said nuclear is one of the most savvy. When Tony Blair wobbled on the issue of new nuclear power back in the early 2000s, the nuclear industry went into overdrive—and Blair didn’t need much persuading to get back on board. In the meantime, despite all the hype, the renewable sector was treated as a Cinderella, an expensive and unreliable sideshow. This contrasts with Denmark and to a certain extent Germany where renewables developed rapidly thanks to a different ownership model, where local communities could own and profit from their own renewable assets. This might be described as the ‘honeycomb’ model, which not only lessens local resistance to e.g. windfarms but builds resilience into the distribution system.
Couldn’t Labour ministers have learnt about this from the Danes? The answer is they could if they had the will, but despite rhetoric about mutuals and co-operation, the Labour government was in awe of big business. So when we bailed out the banks in 2008 we were too timid to use their power to invest in green energy or take on environmental concerns. Vested interests and Gordon Brown’s lack of vision partly explains how we are now hostage to the wild swings of an energy market (and climate crisis) bordering on being out of control.