Energy crunch

Analysis was done in February 2009 to discover when we might see a large-scale energy crunch in the UK [Reuters]. Ian Parrett, a market analyst at Inenco the energy consultancy, predicts that in a worst case scenario the energy crunch will take place as early as 2012.

In a recession, there's less demand for energy but it's predicted that the growth in demand that will occur once the economy improves, may bring about an energy crunch more quickly. We all experienced a hike in oil prices last summer which left us out of pocket and it's this type of effect that various types of energy sourcing and development projects hope to curb.

'It's time for the government to invest directly... As we come out of the recession, do we go back to the same energy intensive approach... or can we find a smarter way to recover in a less energy intensive way, which would take off some of the pressure', Parrett said.

New coal plants may not be allowed to be constructed until they find a way to capture, clean-up or bury their by-product climate-warming gases. As EU regulations have hemmed in the use of traditional coal-fired plants in order to reach carbon emission targets, Britain may lose 14-18 gigawatts of capacity by 2015 which equates to a third of the capacity it needs to meet peak demand.

There are a number of projects that have been given the go-ahead recently or are already underway to fill this power-gap. Scottish & Southern Energy, as an example, signed a deal to produce four North Sea wind farms which will have capacity to produce 2,700 megawatts of power. Paul Dowling, Chief Executive of the renewable energy development division of Scottish and Southern Energy, Airtricity, said, 'Offshore wind represents an outstanding resource which, when harnessed, will make a very significant contribution to meeting the ambitious renewable energy goals for 2020 agreed by the EU last year'.

The main problem, according to Parrett however, is development of infrastructure and for that you need government investment, 'There are 33 gigawatts of offshore wind (planned for construction). But there's no way to bring the power onshore at the moment'. U.S congress agreed to an approximate $800 billion economic stimulus package recently which would pump billions into the green energy sector. Maybe the UK needs to follow suit?