Sanjoy Sen is a chemical engineer in North Sea oil and was the Scottish Conservative & Unionist candidate in Aberdeen North at the 2015 UK general election.
Earlier this year, I wrote an engineering press article where I examined the now-thriving UK car industry and sought lessons for the currently-struggling North Sea oil sector. I also referred to the outspoken US auto executive, Bob Lutz, whose lengthy CV ranges from Dodge’s Viper ‘muscle car’ to GM’s Volt hybrid.
An unashamed ‘car guy’, Lutz understood that shifting new metal was all about addressing ‘wants’. (Customers’ ‘needs’, he admitted, could easily be met by a half-decent second-hand purchase.) By contrast, at Ford’s truck division, he discovered hard-nosed customers for whom image meant nothing but cents-per-mile running costs were king. So, with the Hinkley Point debate rumbling on, I thought I’d examine if our decision-makers need to be thinking along the lines of those savvy truck buyers when it comes to infrastructure investment.
The analogy is, unquestionably, a loose one; hauliers survive on ultra-tight day-to-day margins whereas effective government involves looking down the line, identifying trends and setting a direction. Basically, there’s value in defining what you need then finding the most effective means of getting it. That ought to be obvious enough but cutting the ribbon in front of the world’s largest/fastest/dearest shiny new thing sometimes proves a distraction. What follows isn’t a technical dissection; I don’t even want to delve into the specifics of Hinkley. But I did want to share some thoughts on energy and what that might mean for Conservatives.
What are we trying to achieve? If commissioned, Hinkley Point C would deliver some seven per cent of national demand. This is about the only thing folks commonly agree on: we’re going to need that capacity (and more) given the closure rate of ageing coal and nuclear power stations. Furthermore, other energy demands, from domestic heating to cars, may well go electric in coming decades. So, given that we’ll be needing something soon, any technology not fully ready is going to miss this bus.
Why not invest the money in renewables instead? In short, see above: energy storage solutions can’t yet compensate for intermittent producers. But note the ‘yet’; this is an industry in its infancy and technology gains should create opportunities. (Today’s offshore oil facilities are increasingly smarter and cheaper but there’s still much left to learn; everywhere has a learning curve.) Taking windfarm electricity and generating transportable hydrogen is just one possibility. On a smaller scale, improved roof-mounted solar panels can boost domestic micro-generation even in overcast Britain. The competing challenges here are to maintain living standards whilst cutting energy consumption and managing costs over the transition. None of this eliminates the need for large-scale baseload power (although some environmentalists disagree) but might well trim the number of Hinkleys we ultimately need.
We ought to be clear on one thing, though: encouraging clean technologies (where appropriate) shouldn’t be conflated with ‘virtue signalling’ on fashionable green issues. To draw an automotive parallel, Lutz remains a vocal climate sceptic yet recently declared that advances have made car electrification “inevitable”. Besides, anyone determined to follow the green agenda regardless might find it hard to keep up. Radiation fears once made nuclear unacceptable to the greens; today, many consider it the only means of addressing global warming concerns. Currently, tidal barrages are ‘in’ but wait until the impact on the local ecosystem gets factored in.
Does gas provide any answers? When I arrived in Aberdeen in 2000, the North Sea was meeting the nation’s requirements. This year it’ll deliver under half of what we need. A technically successful and publicly acceptable onshore shale campaign would arrest the decline but over-reliance inevitably locks us into long-term importation. Despite misgivings amongst environmentalists towards fossil fuels, gas looks set to continue its key role in our energy mix. Compared to nuclear, gas plants are quicker and cheaper to construct, more operationally-flexible and easier to decommission.
So, if it’s nuclear this time, is Hinkley C the optimal route? Its final cost won’t be the lowest but a promised upside is greater safety versus previous reactor generations. Sometimes, however, a crucial aspect of engineering judgement hinges on when to plump for something all-new and when to develop proven solutions. In this context, we would have to be convinced that current reactor designs are no longer acceptably safe and can’t practically be made so. And the issue of foreign involvement can’t go ignored here. In essence, we need to ask ourselves that given Hinkley is intended to improve our security of supply whether that can still be achieved if subject to powerful external influences. If not, why continue?
My geography teacher’s 1986 observation to us kids still holds true: the solution to our energy needs can’t be described in one word. For technical, economic and political reasons, no single option looks feasible so pursuing numerous options remains inevitable. The key is to have a joined-up strategy. Note that even Germany managed to slip up here: simultaneously embracing renewables and dumping nuclear raised prices and caused a switch to dirty lignite.
Why might any of this matter to ConservativeHome readers? For starters, this is a party whose success is built on a reputation for financial responsibility; how long will that reputation stand up to deferring key energy decisions and ultimately not getting them right? And given that energy and politics are inseparable, where might the opportunities lie: if the figures add up, would investing in Scottish wave power to supply southern customers also help cement the Union?
Conversely, failure to invest leaves us no further ahead than EU member states we’re de-coupling from, i.e. reliant upon imported energy and at the mercy of global events. Further afield, third-world economies commonly suffer from unreliable, over-priced energy which stifles growth and sends citizens seeking opportunities abroad. Could there be a more effective way for the UK to deliver beneficial change than via new-found expertise in this field?
None of the above comes cheap and nor is it without risk. But we can’t continue to lament the UK’s historic decline in engineering whilst ducking future challenges and leaving opportunities for others.