Wednesday, 11 February 2015

Extracting ourselves from neoliberal energy failure

Andrew Fisher

The UK is third largest consumer and producer of energy in the EU, but still relies on imports for 46.4% of our energy needs (roughly the same as France at 47.9%) - though lower than the EU average of 53%.

Norway is apparently the only European country that is energy independent and a net exporter of energy.

But where the UK really lags our fellow Europeans is on renewables, with an absolutely dire performance, that sees the UK just edging out the Netherlands to escape the bottom spot among EU economies:

The UK produces just 7.7% of its energy from renewables - less than half of that achieved by poorly performing France.

However, the above chart is a little misleading as some nations import large proportions of their energy, so even if renewables forms a large part of their production, it is only a small percentage of their total consumption. So here's renewable energy production as a percentage of total consumption in each nation:
Although the differences are less stark, the UK remains in a woeful position - with our renewable energy consumption less than 5% - half of that of France or Germany, and one-third of Italy or Spain (author's calculations, using Eurostat data).

In her book, The Entrepreneurial State, Mariana Mazzucato describes the UK and US as "without a clear vision" on energy and as "lagging behind". She also reveals that UK research and development spending on energy is the lower than in the Germany, Japan, France, Finland, Korea, Sweden, Norway, Italy, Denmark and the US.

Mazzucato is scathing about the current government, despite its pledge to lead the 'greenest government ever': "the UK has in reality cut spending for established programmes, scaling back investment in green technologies" and hoping incentives to the business sector will fill the void. They haven't and they won't.

Energy production and distribution is an extractive industry, but not just in the sense of using extracted materials: oil, gas and coal. It is a deregulated, financialised industry that is extractive (parasitic) on the economy. UK energy bills have risen faster than anywhere else in Europe and at nearly twice the rate of inflation between 2009 and 2013. In that same period the big six energy companies' profits have risen by 73%.

The price is not just paid in higher bills, but in excess winter deaths which are 23% higher in the UK than in Sweden, despite our milder winters (join Fuel Poverty Action to campaign on this).

The energy companies have not invested in renewable technology because it is not profitable - in the short or medium term at least - to do so. In the absence of any market shaping intervention from government, they will not. The only solution is a publicly owned strategy to deliver the renewable energy revolution that the UK so desperately needs.

That may and probably should include public ownership of energy - as the FBU advocates - not least because 68% of the public wants energy in public control (YouGov poll, p.4), but also because if the public is to invest it should also capture the return and distribute it socially. That of course means tearing up decades of neoliberal orthodoxy that the losses shall be nationalised and the profits privatised.

It's time to tear up our dirty and extractive energy market

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