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No Decision Is Not A Decision On Energy Policy

October 15, 2010

Making the decision on ‘how will we organize our future energy supply” is becoming ever more urgent. We know that the availability of energy sources is changing; that energy usage is growing, climate change is looming. All set against a background of accelerating economic development in countries like Brazil, India and China.

We can look on choosing an energy policy as you would working through a multiple choice exam in school: we can see the available alternatives and we must choose one. We cannot say no to all of them (and luckily in the real world we can even mix and match a few of them). The available answers have hardly changed over the past decade, but still both those who make the policies and we who choose the politicians seem to struggle with coming to a clear decision. The alternatives for the next ten years or so are (expressed very simply):

  • Continue relying on fossil fuels: we accept the pollution (the Gulf oil spill is certainly not the last) and climate change and we also accept that the sources will run out leading to extreme price increases within our lifetime. How much more are you willing to pay at the pump?
  • We start drastically reducing our energy consumption; turn off lights, no more ‘stand by’, use energy saving light bulbs, higher energy awareness in your home and daily life, less planes, smaller cars, more cycling and walking. Drastically by the way, means not 5% reduction in 10 years, but more like 10% over each of the next 5 years.
  • We go for nuclear energy; build more nuclear plants; accept that we have to invest even more in storage and processing of waste; and accept the inherent risks (a small chance of nuclear disasters and a direct link to nuclear arms proliferation). Or
  • We use the available renewable energy sources. For the coming decade that will mean a step change increase in the usage of wind energy and solar PV. There are still highly charged debates raging around the economics of, for example, wind energy. However, many of the alternatives are already fully utilized (hydro) or are at least a decade away from large scale commercial take off. With this alternative we have to accept that wind and solar will require often much bigger and more visible installations; perhaps more spread-out, less concentrated.

All four alternatives will lead to strong increases in energy prices, all have advantages and disadvantages. The global population continues to rise with a growing income but all are competing for resources that are running out. What would you choose? You can choose a combination of all four or you can go for a single alternative – but what investor today would put all their eggs in one basket? What is not available is “none of the above”. Would the examiner accept ‘no answers’ as an answer? Actually, we could dither and hang about hopefully, looking for a magic bullet (remember ‘cold fusion’?) but there is a whiff of ‘rabbit in the headlights” to this approach.

This question is equally relevant for politicians as for each of us consumers and voters. Do I; accept climate change; sell my Harley and buy a Brompton; swallow my reservations about Hunterston’s nuclear plant: or do I go for renewables? So: it’s like being back at school and doing a multiple choice. If you don’t know, close your eyes and pick one! I for one am looking for a small property in the country, where I can put up my own Gaia-Wind turbine!

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