An opinion piece in Business Green by Beverley Cornaby, Director of the Corporate Leaders Group UK, on their latest report Powering prosperity: How electrification can strengthen the UK’s economy, resilience and energy security. In it she argues that faster, more coordinated electrification can deliver significant and lasting economic benefits
As we face yet more energy price rises in July, the UK faces a choice: maintain dependence on fossil fuels or pursue electrification. It's an age-old dilemma in any crisis between finding an immediate solution versus putting in place longer term plans to tackle the root cause. It's important though that the UK stands firm: further investment into fossil fuels will not support or strengthen longer term prosperity, resilience or energy security - electrification will.
The conflict in the Gulf region earlier in the year triggered an energy crisis, which has resulted in volatile energy prices and fragile supply chains. It has also highlighted a simple, but uncomfortable truth: the UK's continued dependence on fossil fuels is an economic vulnerability we can no longer afford.
UK households were buffered to some extent by Ofgem's latest price cap revision in April, with lower prices continuing until the end of June. The price cap - the maximum amount energy suppliers can charge consumers on default tariffs for each unit of energy and standing charge - fell by seven per cent, saving millions of households an average of £150. However, as the conflict in the Gulf continues and this protection comes to an end, predictions are that energy bills will now rise by £209, reversing any previous savings. And while this rise may not be as high as some predicted, it is still significant alongside rising petrol and food prices further impacting households, and there is a chance revision may occur before winter, further pushing up bills.
To address this, there is pressure on government from opposition parties to step away from current energy policy and ‘drill, baby, drill'. Arguments presented are based on cost, energy sovereignty and grid stability. Some say slow down, and others say stop the clean energy transition altogether, proposing rollbacks in renewable energy policy and to increase North Sea oil and gas drilling. However, these proposals fail in the face of the facts, which clearly show that the best path to UK prosperity is a cleaner, safer energy future through electrification using domestically available renewable resources.