Our current energy market is not working in the interests of ordinary people. Nor is it capable of facing up to the main challenges of the 21st century.
Energy is now a central environmental, social and economic issue and is too important to leave to the market
The energy sector accounts for 4% of GDP and is controlled by the “big six” (British Gas, EDF, E.ON, RWE npower, Scottish and Southern (SSE), Scottish Power) who supply 99% of all households with energy and own 71% of total electricity generating capacity.
Of these six companies only two are British owned and headquartered in the UK, meaning most of our energy system is owned by foreign transnational corporations.
Wholesale energy prices are volatile and dependence on imports from unstable regions is growing and CO2 emissions have barely fallen in EU despite the Kyoto Protocol and Copenhagen.
Fuel Poverty is accepted as a normal part of business as usual as are above inflation price increases. Since 2005 gas prices have risen by 120%, electricity prices by 75%. In 2009, 23% of households in Liverpool City Region were in fuel poverty.
As prices have risen the perception that the “big six” are profiteering- passing on rises in wholesale gas prices to customers, but not the falls- has led to declining trust in the industry. In 2009 in a consumer focus survey in consumer confidence, the gas and electricity market came bottom out of 45 markets. A 2014 study found only 32% of Britons trust energy companies- making it the least trusted sector behind banking and the media.
We need to shift relatively quickly from centralised carbon based energy to distributed renewable energy and massively reduced energy consumption. The current market is a blockage because the business model of the big six and the lack of trust of the consumers in them, mean they are not capable of leading this transition (despite being entrusted to do so by recent governments.)
The transition is at odds with their interests- as they sell energy by the kilo-watt hour for profit.
We need to quickly decarbonise our energy system because of the greatest threat we have faced as a global civilisation – Climate Change.
It is almost certain that using fossil fuels changes the climate. Most carbon dioxide emission come from burning fossil fuel, and the main reason we burn fossil fuels is for energy.
Agriculture contributed one eighth of green-house gas (GHG) emissions in 2000, energy contributed three quarters. The climate change problem is principally an energy problem.
In Copenhagen 2009, there was a consensus that global warming needed to be limited to 2oC. To avoid a 2oC rise in global temperatures requires a massive reduction in global CO2 emissions.
The consensus on carbon reduction targets for developed countries are around 80%. The IPCC recommends 80% by 2050 and the UK government passed the climate change act, legislating for a legally binding 80% cut in UK GHG emissions by 2050.
However if we subscribe to the only socially just way of dealing with the CO2 emission problem, that means contraction and convergence, which means by 2050 everyone on the earth will have the same per-capita CO2 emission allowance, 1 tonne per year.
For a country like the UK that means a more than 85% CO2 reduction. This is such a deep cut that the best way to think about it is to just go for net zero carbon emissions.
The Centre for Alternative Technology have been researching the UK energy system for years and have developed a plan, Zero Carbon Britain.
Zero Carbon Britain is based on what is physically possible, rather than what is politically or socially possible.
This report says that we can rapidly de-carbonise our society, energy system, agriculture, transport, and maintain a decent standard of living using the technology we currently have.
This does require a massive 60% reduction in energy demand, in order to work, but the remaining demand can be met, 100% by renewables, using technology we have available now.
It is physically possible, Liverpool Community Renewables want to be part of the movement that makes it socially and politically possible.