Cop26 will likely produce a lot of hot air (but not enough to warm your home this winter)
WITH some trepidation, I asked my energy supplier how much I could expect to pay next month after a fixed dual fuel deal comes to an end.
There was no point switching — despite all the experts urging us to do so for years — so an ominous-sounding variable tariff was inevitable.
The best projection available, and of course it depends on usage, was an extra £25 roughly a month, and it all adds up to north of £1,100 a year.
Gas prices are volatile and no one can know how mild the winter will be, but it’s a budgeting headache — and most if not all of us are in the same boat.
For those who face a choice between heating and eating, this price surge is a moment of real crisis — but it also has potentially far-reaching political repercussions.
The energy crisis is the worst possible backdrop for the forthcoming COP26 climate change summit in Glasgow, which kicks off at the end of the month.
Intellectually, we can all accept the worth of an event that will turn global attention back to the environmental emergency after more than 18 months of coronavirus.
But it will be seen as an expensive irrelevance to the many thousands wondering how on Earth they are going to survive the winter, with tax hikes and a probable rise in interest rates also looming on the horizon.
Hectoring homeowners about heat pumps is all very well — but what about the pensioners who risk freezing to death in their own homes?
COP26 threatens to become a festival of well-intentioned hand-wringing in a parallel universe — when a real climate crisis is unfolding in our own homes.
And a big part of the problem is the extra charge added onto our domestic fuel bills in the form of green levies to fund renewable energy, which patently isn’t up to the job of meeting all of our needs.
For industry, the consequences are existential — big companies may have to ration the amount of electricity they use and some may go to the wall without government bail-outs.
Paul Sheerin, chief executive of Scottish Engineering, has warned of the possibility of ‘temporary shutdown’ when production becomes ‘simply uneconomic’ — signalling a possible return to the three-day week of the 1970s.
Sky-high fuel prices have the capacity to destabilise not just the UK Government but also its counterpart in Edinburgh, whose ministers have had their heads buried firmly in the sand for years when it comes to how to keep the lights on.
The United Nations gathering offers a chance for politicians to emote about shrinking glaciers — but they’re the same people who have failed to head off the current energy price crisis.
You might wonder to what extent any of them can be trusted to come up with the goods on green reforms when they’ve failed to devise a credible strategy, or indeed any strategy, for meeting future energy requirements.
The alarm bells have been ringing for years — 2006 was the first year of a now-consistent trend of UK gas production falling below our consumption rate.
Live National Grid data from last week showed the UK’s electricity generation from gas sitting at around 53 per cent of its total, with just under 12 per cent from nuclear generation and a little over nine per cent imported from other countries, with the rest from renewables.
In 2017, the UK removed 70 per cent of gas-storage capacity when the Rough storage facility was closed because of a UK Government decision not to subsidise ongoing maintenance and upgrades.
This has left us with an over-reliance on gas supplies from Russia, where Putin is holding Europe to ransom — playing geopolitical games where the stakes couldn’t be higher.
Meanwhile in Scotland the past 14 years have seen a succession of wild promises about green energy, the most notorious of which was Alex Salmond’s bold pledge that Scotland would become the ‘Saudi Arabia of renewables’.
Yet last year wind farm operators were handed more than £230million to shut down their turbines, a record windfall funded by energy bill-payers, up from £130million in 2019 — an increase of nearly 81 per cent in a year.
Experts estimate the amount of discarded energy is equivalent to about 14 per cent of total annual electricity consumption north of the Border.
The cash given to power giants is known as ‘constraint payments’, made when it is too windy for turbines to operate — or when the supply of energy outstrips demand and the National Grid cannot absorb their output.
Yet there’s a stubborn unwillingness to countenance other forms of energy production such as fracking.
In the space of 20 years, fracking in the United States has made it the world’s largest gas producer, with gas a quarter of the price of our own, helping to boost their industrial sector.
Nicola Sturgeon was accused of ‘misleading’ parliament in 2018 after announcing a ban on fracking that was later exposed as being untrue by the Scottish Government’s own lawyers.
While not technically a ban, the effect is that fracking is effectively off the table, here and indeed in England, for now.
Yet across Britain, it is estimated that 30,000 jobs could be created if a shale gas industry was encouraged — and Scotland, with a long tradition of engineering excellence in Aberdeen and the North-East, is well-placed to spearhead it.
Now locked in partnership with the anti-capitalist Greens, the SNP can’t even mention fracking without the prospect of their alliance falling apart, and that would be bad news for its push for another referendum, although it’s clearly already dead in the water.
And Miss Sturgeon is also poised to block a drive by Chancellor Rishi Sunak for more nuclear energy by opposing the creation of new plants in Scotland.
On the Cambo oil-field near Shetland, which contains more than 800million barrels of oil, Miss Sturgeon is on the fence, unwilling to oppose it while at the same time asking the Prime Minister to review the licence.
She warned that ‘if we keep telling ourselves we can rely on fossil fuels forever then we’ll never make that transition’ to green energy.
You might think this is all a bit rich coming from a party that not so long ago based all of its fantastical predictions for the economic success of an independent Scotland on soaring oil prices.
Or you might wonder if Miss Sturgeon and her colleagues really have any idea of what they’re doing, apart from busking it and hoping for the best.
Either way, all the signs are that the Chinese are giving the Glasgow summit a wide berth — and without them there’s a real limit to what COP26 can achieve.
Patronising politicians will sermonise about the supposed merits of heat pumps and electric cars — but in the meantime you might want to invest in a few more woolly jumpers instead — and keep hoping for a mild winter…
- This column appeared in the Scottish Daily Mail on October 19, 2021.
- Follow me on Twitter: @GrahamGGrant
