Prepare for change
The old adage ‘the only certainty is change’ is especially true in the energy sector. So sometimes it’s helpful to get out the crystal ball and gaze into the future to see what might be coming our way. And in this year’s npower Future Report – Energy and the Economy: The 2030 Outlook for UK Businesses – we’ve asked experts at the London School of Economics to use their brain power and extensive research base to do just this.
The finding that’s making the most impact is the amount of money required to get us to 2030 in good shape – i.e. with energy supply that’s both secure and cost effective as well as meeting carbon emission reduction targets.
Just as we’re getting used to the long-held £200-billion by 2020 estimate – even though it still sounds implausible – the Future Report estimates that a further £130-billion investment will be needed to continue the work through the following decade. So up to £330-billion by 2030. Clearly, that’s a lot of cash.
So how achievable is this? Future Report author Professor Samuel Fankhauser, who’s also Co-Director of the Grantham Institute on Climate Change and the Environment at the LSE and a member of the Committee on Climate Change, sets out three potential future scenarios and the impacts each will have on this goal.
Firstly, Hitting the Target, where as the name suggests, the current plan regarding investment and generation is achieved. But this must be supported by a recovering economy in the UK and throughout Europe.
Failing this, the second scenario sees Gas as Key, where a dash for gas over the next few years brings short-term price gains that are followed by longer-term environmental problems from missed carbon targets.
Finally, Austerity Reigns, the least optimistic scenario where low investment and poor economic growth allow our energy infrastructure to age without the upgrades needed to accommodate more renewable generation or other technological advancements.
You can read more about each scenario – and the effect they are likely to have – in the report (click here to download your copy).
But the key area that large energy-users are most interested in – regardless of which outcome comes to bear – is what you can do to safeguard your business. And here, you may be relieved to learn, the recommendations are not overly complex or arduous.
Managing energy well and making it a strategic issue is vital. A focus on energy efficiency and making good use of self-generation energy technologies are also crucial. And businesses are encouraged to follow policy developments and understand the implications for their organisation. In particular, calling for a level playing field in the industry, and being ready to commit to the will to decarbonise the energy supply, are essential if UK businesses are to be well-placed for the immediate future challenges facing them over the next few decades.
You can read about each recommendation in more detail in the report – click here to download your free copy. It provides what will hopefully be a welcome guide to dealing with future uncertainty and preparing for the best – and the worst – possible outcomes.