The Energy Trilemma

Energy Trilemma Jo Buckley

We’ve spoken before about the “Perfect Storm” which is causing the current energy crisis. There’s been multiple issues that have all happened at the same time and it’s impacted the supply and price of gas across Europe and beyond.

You can point to the Nord Stream II pipeline delays, the geo-political tension between Russia and Ukraine as well as unseasonably cold temperatures last winter to explain the current predicament, that’s only part of the story. More recently, there has been a reduction in the flow of gas through Nord Stream 1. There are also technical issues with the Nord Stream 1 (NS1) gas pipeline (parts can only be sourced from Canada which are subject to sanctions) which is running at 40% capacity alongside a risk of reduced gas being put into the pipeline by Gazprom that impacts storage injections for Winter.

Fundamentally there’s infrastructure and supply issues that have long been a significant problem for Britain, that pre-date many of the events we’re experiencing now. We explore these and discuss how your business can future proof to protect against unexpected price fluctuations.

The “energy trilemma” and British business

The energy “trilemma” focusses on three core issues that are a concern for the UK. These include energy security, storage solutions and the renewable strategy. By addressing these issues, the UK government can better support businesses and provide a stable commercial environment for companies to thrive:

Overseas imports: The UK is over exposed and heavily reliant on energy from other countries. Reports from 2021 suggest we’re still Europe’s second largest net importer of energy (with net imports of 12.3TWh).

Storage: The UK’s energy storage capacity is underdeveloped and whilst we’re regularly at 70%-90% capacity, we can hold just 1% of the gas reserves in Europe. Holland’s storage is 9 times larger than Britain’s, whilst Germany’s reserves can hold 16 times more than the UK.

Infrastructure: The renewable strategy is not joined up with enough base load provision. Renewable energy (wind, solar, hydro and biomass) accounts for an estimated 43% of the UK’s electricity. There are concerns about the ability of wind and solar energy to consistently meet the demands of British business.

In times of relative geo-political stability, the exposure to being reliant on importing energy can be overlooked in terms of risk. The transition to cost effective green energy should go hand in hand with a coherent strategy to wind down fossil fuels. This will help balance the intermittency of some renewables, in a way that maintains resilience and price stability. The political challenge to achieve this is going to be very demanding. At risk is the competitiveness of UK businesses.

What options are available for your business?

At eyebright we aim to advise our I&C partners and explore, in advance, solutions that can future-proof their business.

Developing, implementing, monitoring and adapting your energy strategy can help forecast for the future and stabilise operational energy costs. It can also position your organisation to meet supplier and partner expectations in the future. Existing clients tell us they’re sustainability strategy is being requested during tender processes and contract negotiations.

We’ve helped businesses with various services, including developing their own green gas and renewable energy solutions. We’ve also secured Power Purchasing Agreements (PPAs) with energy generators and subsequently manage the relationship between all parties.

We can offer knowledge of flexible energy procurement contracts and bespoke energy agreements. Furthermore, it’s important your energy consultant provides a full range of services such as bill validation, CCL advice, regular audits that assess your consumption recommending opportunities to reduce usage and market analysis reports.

For comprehensive advice and support that’s tailored to your organisation, please speak to our experienced energy consultant, Joanne Buckley, on 07503 882640 or email J.Buckley@eyebrightutilities.co.uk.

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