Written evidence submitted by Dr Fred Witham, Chief Project Engineer, Rolls-Royce (ECO0049)
I am an engineer at Rolls-Royce, but am writing this as an individual – these views are not the views of Rolls-Royce. These are my views following a keen interest in energy generation and storage.
An ambition to have a zero-carbon energy system with the lowest energy prices in Europe.
A system that is configured to create competition between suppliers and technologies, and provide the lowest total cost energy, averaged over time- and location-based variations, to businesses and households.
A system that ensures security of supply of energy, through management of generation capacity.
A system that incentivises a move to energy security via ever decreasing reliance on energy and fuel imports, especially from unfriendly nations. (Including incentivising micro-generators such as individual households.)
A system wherein carbon release and pollution release can be taxed, providing government with a lever that can be used to affect the market to incentivise ever reducing pollution and carbon release.
A system of incentives for new (green) energy technologies, that can then be scaled back as they reach maturity.
A system that incentivises improvements to the electrical distribution and storage system, such that it is fit to cope with increasingly decentralised and small-scale energy generation, and variable electrical supply through an increasing proportion of renewables.
A system that incentivises consumers to bias their energy demand to times of relative surplus of energy.
No comment.
No comment.
There seem to be a number of failings with the current energy market:
A) Other than Agile tariffs, which only a small minority of people subscribe to, there is no incentive to modify energy use patterns to times of high energy availability or low carbon intensity energy.
B) The market does not incentivise subscription of renewable energy suppliers through pricing. For example, in the energy crisis sparked by Russia’s invasion of Ukraine, gas became expensive. The cost of generation and distribution of renewable energy will not have changed, and yet their prices also went up. One would think that the renewable generation companies would then be making large profits, but that does not seem to be the case either – judging by their share prices which generally have fallen since energy prices went up.
C) There are a large number of suppliers who do not appear to do anything useful. Companies who neither maintain the electricity grid nor generate electricity seem to exist solely to hedge future prices. When they get it right they make money. When they get it wrong, e.g. Bulb, customers end up paying anyway. This seems to be a loss of money from customers and that is not improving our energy infrastructure or providing value for money, but paying shareholders of these zero-value-add companies.
D) Government interventions, such as the energy price cap, distort the market and prevent it from working effectively.
E) Government interventions such as spending taxpayer money to reduce energy bills during the energy price crisis seem to be a means of subsidising the status quo, rather than using the crisis as a stimulus for change.
No comment
No comment.
April 2024