Being seen to smack

According to the Met Office, early figures for 2014 suggest that it has been the warmest year on record.

The global mean temperature for January to October based on the  (compiled by the Met Office and the University of East Anglia’s Climatic Research Unit) is 0.57 °C (+/- 0.1) above the long-term (1961-1990) average.

With two months of data still to add, the full-year figure could change but presently 2014 is just ahead of the current record of 0.56 °C set in 2010 in the global series which dates back to 1850.

So what does that mean for the UK? Well we should be trying to reduce our energy use as much as possible and increase our low carbon (whilst maintaining the security of the electricity system) and increase our energy efficiency so that emissions are cut – which we are doing to an extent.

However,  when politicians have tried to put in place these mechanisms which reduce carbon – such as through the demand side measures discussed this week – various newspapers have jumped on it as a sign that that our electricity systems are insecure and that we do not have sufficient capacity in the UK and that lights might go out.

All in all therefore, despite higher bills for renewables and the demand side it will probably mean we can pat ourselves on the back in terms of security. Quiet smug satisfaction is very British.

But we are not out of the woods yet in terms of keeping the lights on.  Triad season (ie the three times of highest demand for electricity) still beckons and the last thing that politicians will want just before a general election are blackouts.

Some have leapt onto the doom-mongering bandwagon. The UK would face “severe economic consequences” if there was a significant disruption to the supply of electricity, says the Royal Academy of Engineering.

Blackouts would rewrite the electricity market rules and no-one wants that.

So does what does this mean for the regulator and UK generation? They want to meets green targets but also keep the lights on.  In an election year the regulator needs to be seen to be doing its job.

In a very press friendly release Ofgem has announced that is fining generators such the likes of Drax, Intergen and British Gas for not meeting their Community Energy Saving Programme (CESP) targets. Aren’t they tough?

But this seems to be a very short sighted, easy and lazy win. The problem Ofgem has is it is very good PR to smack Drax et al around and usefully it distracts people from the question of the state of competition in generation, supply and energy bills.

And next year it is election time  and politicians want electorate friendly easy headlines . The last thing that they want is stories that Ofgem is not doing its job. It would imply that ministers aren’t working too.

If this is going to be the hottest year yet isn’t it time that the climate rises up the political and regulatory agenda? If change is not made by those in power themselves then perhaps the electorate will force them to adapt?

Dominic Maclaine is an EPG Associate and used to be the editor of New Power before he sold the business. He conducted PhD research into electricity supply competition in the UK and Norway at SPRU. He was previously the editor of the monthly newsletter Power UK published by Platts (and previously the Financial Times). He is currently writing a book about recent developments in the UK electricity market, to be published by Routledge.

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