8 October 2009

Walt Patterson

Associate Fellow, Energy, Environment and Resources


The UK Office of Gas and Electricity Markets OFGEM has published what it calls 'a comprehensive review of Britain's energy supplies'. It nevertheless omits the most important part of the story. It is the latest in a long succession of official analyses that focus on fuel and electricity, without asking why we want these 'energy supplies', or how we use them.

We use fuels and electricity to 'run stuff'. The 'stuff', the user-technology, is what matters - the lamps, the heaters and coolers, the motors, the electronics, the vehicles, and especially the buildings. This user-technology delivers the services we want - the comfort, the illumination, the motive power and mobility, the information, communication and entertainment. These services are separate and distinct, and not interchangeable; nor are the user-technologies that provide them. We do not, therefore, have an 'energy problem'. We have many different, distinct problems - how best to get comfort, or illumination, or motive power, and so on, in different places and different circumstances.

Official commentaries like those of OFGEM make people think that the most important part of the system delivering the services is the fuel or electricity it may require. It is not - on the contrary. The most important part of the system is the user-techology or user-infrastructure. OFGEM has been preoccupied for nearly two decades with 'competition', as a way to protect what they call energy users. But the most important competition, the competition that really matters, is between fuel and technology. Better technology, better infrastructure, delivers better, more reliable services while requiring less fuel or less electricity. Fuel and user-technology compete directly with each other.

The OFGEM report declares that, 'In all of our scenarios we assume market participants respond adequately to market signals. In other words the market arrangements and structure within GB remains largely the same'. That may be the problem. The preoccupation with short-term market transactions in, say, natural gas or electricity misses the essential point. Above all, as top priority, the UK needs to stop wasting the gas and electricity we use. The official Sustainable Development Commission, National Audit Office and Environment Audit Committee have all reported, for example, that UK government buildings are bad and getting worse. The UK government should stop telling the rest of us what to do, and show us. OFGEM says we need investment of some £200 billion 'to secure energy supplies and meet carbon targets'. The first tranche of such investment ought to be to upgrade buildings all over the UK.

OFGEM says, 'The ultimate purpose of Project Discovery is to examine whether the current GB arrangements need to be improved to promote the delivery of secure and sustainable energy supplies.' What we need are secure and sustainable energy services - that is, keeping the lights on. Yes, the current GB arrangements need to be improved, not by OFGEM but by the UK government - the sooner the better.

The paperback of Walt Patterson's book, Keeping the Lights On: Towards Sustainable Electricity, will be coming out on 23 October 2009.

Further Resources

Managing Energy Data
Working Paper, Walt Patterson, May 2009

Managing Energy Wrong
Working Paper, Walt Patterson, June 2008

Keeping the Lights On: Towards Sustainable Electricity
Book, Walt Patterson, July 2007

More by Walt Patterson >>