The future is uncertain and we must learn to accept it. That was the message this morning from npower chief executive Volker Beckers.
Speaking at the London Stock Exchange at the launch of a White Paper “energy risk management for UK business”, Mr Beckers said: “We all need to be experts now. Energy risk management is vital for the UK.”
The White paper was based on studies by the London Stock Exchange and this year’s npower Business Energy Index, a survey of 300 companies.
Mr Beckers told the audience that between 2008 and 2010 world energy demand had fallen for the first time ever.
“The reason is the global recession and the fact stimulus packages for countries were designed to promote clean energy, and that means long term investment,” he said. “We have CO2 reduction this year because of economic use of energy but this will change.
“Between 2008 and 2010 we saw a 5-8% fall in demand in the UK but npower sees demand will recover and rise. Demand could be up to 100% by 2050 but opinions are mixed on this”
He outlined how the future would need an energy mix and a carbon price to secure supply. Mr Beckers also welcomed government consultation, in particular the electricity market review and next year’s Energy Bill.
“We need certainty to make high investment decisions. The £200bn needed is about £6,000-£8,000 per UK household. That’s just till 2020 and we would need a similar amount for the next decade to 2030. I’m supportive of the government’s plans to implement changes going forward. They have quickly engaged with industry”
Mr Beckers said he wanted a low carbon obligation rather than a set carbon price and said the market would have to change, as it was based on fossil fuels and would need to adapt to renewables.
He also stated there would be more problems with nimbyism as people objected to wind turbines or piping and said reducing energy demand would be essential, and that meant getting public support.
“This is not just about investment needed or loft insulation, it’s about convincing people it’s necessary. There is much more for us to do to inform the debate.”