Five years into the financial crisis, the uncertainties go beyond economics to social trends, environmental concerns and technology. How will Britain’s demographics have changed? When will renewable energy get cheaper? What might be the impact of different policy developments? RWE npower commissioned Professor Sam Fankhauser, Co-Director of the Grantham Research Institute, and his colleague Dr Alex Bowen, to explore three alternative scenarios for how these issues could affect UK energy in 2030.
The first, ‘Hitting the Target’, involves political cohesion in a recovered Eurozone, high levels of investment in the power sector and reduced carbon emissions. The second, ‘Gas is Key’, assumes that economic momentum will lie with Asia. It explores how short-term price gains from switching to gas power are followed by environmental problems from missed carbon targets. Scenario three, ‘Austerity Reigns’, looks at how economic stagnation in the UK and Europe would result in less technological investment, with options such as carbon capture and storage, or shale gas, not being implemented.
Professor Fankhauser says: ‘This report shows how fragile and delicate the equilibrium of factors is for protecting the future of the UK energy industry. A slight change of emphasis in policy, a weakening economic picture or a preference for cheaper energy sources over low carbon energy generation could result in very different operating environments for UK businesses. It is crucial UK businesses take action now to overcome the potential challenges they may face.’
The report suggests ways for UK businesses to prepare for this uncertain future, including focusing on energy efficiency, making energy management a senior management issue and taking advantage of self generation opportunities. It was commissioned via LSE Enterprise, LSE’s commercial arm.
Read the report Energy and the Economy: The 2030 Outlook for UK Business
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