May sound a simple and straightforward question but with news every day now of the crisis in the Middle East with the threat of interventions in Syria, perhaps it’s time to look at the way we manage our energy in a new and re-visited global context.
The impact of situations such as Syria, which threaten supply routes for key commodities as well as the actual sources of supply, are already raising the prospect of potential hikes in oil prices with all the negative economic connotations that would mean.
The threat to supplies of energy comes from many angles – the political stance being taken to the Middle Eastern situation by the major global powers could mean the issues are far more widespread than the obvious area in question. Between the Russians, Chinese and Americans there are a host of protective political alignments to safeguard not only their own but also their immediate allies supplies’ of vital commodities. Who knows where this may be going?
This situation isn’t new, we’ve been there on many occasions over recent decades to varied levels of market shortages and price hikes. Unpredictable events inevitably cause even greater volatility in commodity markets.
Whilst we contemplate our own European and UK specific energy issues, the threat of unpredictable global geo-political issues overlaying even more disruption places the weak economic recovery on an even shakier footing.
What should we do to mitigate external influences on vital services such as energy?
Clearly the biggest factor of all revolves around energy demand reduction – if we aren’t using it we don’t have to think quite so much about the components of generation. This is perhaps a point at which to reflect on what the paybacks of schemes might look like with an even higher energy price and take corrective action accordingly.
It’s also a time to consider what support some of the new technologies around energy storage may contribute in helping to mitigate threats to supply in our localised environment. Certainly they would be of immense use in helping to manage peak demand periods. They would also strengthen the case substantially for certain types of renewable generation – solar PV springs to mind.
Simple measures like ensuring we have different forms of back-up generation, with as low-carbon a fuel source as possible, makes good sense to critical energy-using systems and services.
As with all commodities, the market will ultimately determine the price both now and in the future. There has never been a better time to accelerate the application of solutions to our more localised energy environment and to consider whether we have energy at too low a point in our list of priorities…
Mervyn Bowden is the Managing Director of Intuitive Energy Solutions and will be speaking at Energy Live 2013