The Westminster government is to hold urgent talks (Saturday 18th September) with the energy industry amid growing concern about a spike in wholesale gas prices. Kwasi Kwarteng ( the Business Secretary ) will talk to gas suppliers and others on Saturday to hear how wide-reaching the impact of the surge in prices could be. The combination of high global demand, maintenance issues at some gas sites and lower solar and wind output are blamed for the rise.
A knock on effect of the price rises is that two large UK fertiliser plants to close. The Westminster Government sources have stated there is no threat to UK gas supplies and the impacts on small energy companies that might be the most exposed are being monitored. Westminster government officials are looking at whether products that could end up being in short supply, such as fertiliser, could be imported from abroad.
Natural gas prices are at currently at record highs as economies around the world begin to recover from the Covid crisis. In the UK, lower winds have meant less renewable energy is generated. There have also been outages at some nuclear stations and lower flows into the UK of natural gas from Norway, pushing up the price of natural gas. Another thing to consider is that at some point there will be a significant rise in domestic energy bills.
Saturday’s discussions with senior figures from the UK's energy sector were requested urgently with the chief executives from gas producers, the National Grid, suppliers including Scottish Power, EON and EDF and the regulator Ofgem to hear how far-reaching the impact of the surge in prices is likely to be.
The high prices have led to fertiliser plants in Teesside and in Cheshire to close, leading to a major drop in supplies of carbon dioxide gas - a by-product of fertiliser production - which is used across many industries. Meat processors are also in talks with the government over this carbon dioxide shortage because of its use in the meat production process. The gas is used to stun pigs and chickens prior to slaughtering and also in the packaging and preserving process.
There is is still an opportunity to develop a different vision for energy and the environment for a Wales that reduces its carbon emissions, harnesses its natural resources sustainably, and seizes opportunities in the low-carbon and circular economies. The link between energy and climate change is clear. A number of actions could fall into the remit of Ynni Cymru, including: reducing the cost per unit of energy to homes and businesses in Wales, reducing the consumption of energy in homes and businesses and helping consumers to make informed decisions based on smart metering technology.
Ynni Cymru should be tasked with funding the mass installation, outsourced to local companies, of solar panels on the roofs of households, business premises and lampposts in Wales, beginning with public buildings and social housing. The company would coordinate and facilitate the use of publicly owned land for renewable energy purposes.
The company could finance the acquisition and development of new large-scale generating and storage capacity, ensuring Wales becomes self-sufficient in renewable energy and becomes a renewable energy exporter. It could boost our energy market by ensuring the development of a national producer cooperative among community energy organisations.
The problem we face is that our energy production and distribution model has been effectively restructured to primarily benefit the big 6 energy cartel members, their interests and their (City) profits. From the perspective of energy consumers and smaller scale energy producers, or anyone who wants things to change the problem is that all the Westminster focused political parties have happily bought into this cartel dominated model of energy production and ownership (or perhaps more truthfully were quietly bought).
The energy sector is quite simply warped to favour the larger providers - it is very difficult to break into a sector that is dominated by large companies that are favoured by the Westminster government, At the beginning of 2021 there were 70 energy suppliers in the UK. Industry sources have said that there may be as few as 10 left by the end of this year. The reality is that the UK’s cartel dominated model for energy production and distribution is not necessarily the norm everywhere in Europe or around the world.
Now contrary to what you might think, and tend hear from Westminster and much of the UK media; realistic alternatives exist and actually prosper, a particularly good example of a balanced and healthy energy mix can be found in Germany. Small may very well be beautiful, even with a geographically sizeable state, especially in relation to energy, in 2012 some 22% of the countries energy came from small scale green entrepreneurs, by 2019 it was 46%.
Community based co-operatives (both urban and rural), farmers and homeowners are part of the 1.3 million renewable energy producers and part of the energy mix. In Germany, citizens’, cooperatives, and communities own more than half of German renewable capacity. Small-scale electricity generation is having a knock on effect encouraging change throughout the energy system.
Citizens’ owned energy in Germany involves:
- Private individuals or farmers (jointly or individually) invest in energy facilities
- The investment is made with the citizens own capital, which gives a certain level of control over the project
- Citizens own at least 50 percent of voting shares
- Citizens have a connection to the region where the facility is operated
In Berlin, a cooperative (Burger Energie Berlin – literally Berlin Citizens Energy) continues to strive to take control of the capital's electricity grid with some 35,000km of underground cables. The cooperative is a free, cross-party coalition of citizens who are committed to a sustainable, sustainable and democratic energy policy in Berlin. Members have one vote regardless of the amount their deposit and anyone who wants the power network to be in civil hand, is welcome.
Ordinary Berliners have invested their cash in the venture with the intention of producing a reliable 100 per cent renewable energy supply. The aim is to promote the integration of renewable energy into the grid and to invest a portion of the profits from this directly into the transition to renewable energy. After some serious campaigning, on the 5th March 2019 the Berlin electricity grid was awarded to Energie Berlin.
This is grass roots energy generation that has potentially the power to change the nature of the energy supply system (in Germany and elsewhere). The aim to build an energy grid that is better handle the rise of green power and allows local use of locally produced energy. This may well be a case of small being both beautiful and perhaps deeply disturbing from the perspective of Westminster and Cardiff Bay something that can be both community beneficial and community owned.
There is no practical reason beyond ‘thats not the way its done here’ why people living here and Wales could not benefit from membership of citizen owned energy co-operatives. In Germany, there is a deliberate promoted policy of energy transition (or ‘Energiewende’) – this is a very different approach to what is practised in these islands (at least south of the Scottish border). For a start the ‘Energiewende’ is driven by a desire to reduce and eliminate any dependency on nuclear energy.
The introduction of the Feed-in-tariff (EEG) in 2008 was an important part of this process, along with (post Fukushima) the almost unanimous across the board political commitment to a wide range of targets (in 2011) which included a commitment to reduce energy demand (with a 50% reduction in primary energy use by 2050) and the achievement of an 80% renewable electricity share of total consumption (by 2050). This has resulted in a significant uptake of renewables in Germany.
The real striking difference is that the operation of the grid in Germany means that generated renewable electricity is used first and that distribution network operators (DNOs) are also seeking to reduce demand. This is so radically different from the way the energy is generated, distributed, exported and used here in our country that it no doubt, at least from their limited perspective, quite understandably frightens Westminster focused politicians, the civil shrive and the city.
A significant difference, aside from the scale and pattern of investment (in Germany), is that small businesses, co-operatives, individual households and local authorities benefit from investment distributed by a network of local banks (again something we pretty much entirely lack here in Wales). The whole thing has been supported by the KfW (state investment bank) to the tune of 23.3 billion euro in the area of environment and climate protection.
These developments are a million miles away from the so-called ‘Free market’ for energy that exists in the UK, which is pretty dominated by the ‘Big 6’ energy cartel members. The fact that some former politicians have found rather rewarding post political career employment within the energy sector may be co-incidental but suggests that there is little desire for improvement within Westminster and perhaps a complete lack of understanding of the concept from any Labour in Wales government(s) be they previous, current or future.
The way the current set up works, it is difficult to imagine ‘a Government’ at most levels (at least outside of Scotland in the UK grasping the concept, the practicalities and real possibilities of genuine community owned beneficial energy generation projects. Pending some real change in the way energy policy works we are all pretty much trapped with a real lack of meaningful choice or realistic alternatives when it comes to customers securing domestic energy from the big 6 cartel members.
What we have had over the years has been visionless New Labour, Conservative-Lib DeM and then Conservative governments in Westminster, which have remained hand in glove with despotic oil and gas-producing regimes in the Middle East ( aside from the vassal like relationship between the UK and Saudi Arabia ) who have had has little real interest in renewables.
The relationship between the energy cartel members and the Westminster government’s is close to being corrupt. Teresa May’s wobbly and unstable Brexit fixated Westminster government, was followed by Boris Johnson’s majority Conservative government which continues to actively work to pull the rug out from under the renewables sector something that has cost highly skilled jobs here in Wales.
Things need to change as the exceptionally comfortable lucrative relationship between the Westminster focused political partisans the big 6 Cartel members has done all of us no favours over the last twenty years. It has also despite some progress failed to deliver energy independence for these islands, which are still far to dependent of hydrocarbons from unstable regions of our planet and some very questionable despotic regimes, with whom Westminster is quite happy to deal with.
