Regional devolution can create the conditions for a shift in how gas and electricity are distributed, with the right helpby Frances Cairncross / February 3, 2016 / Leave a comment
The north of England grew wealthy in the 19th and early 20th Century on the back of local supplies of energy, in the form of coal. Northumberland and Durham were the heart of England’s energy supply, and by 1919 almost a quarter of a million people worked in the mines of the northeast. Indeed, coal from deep mines was Britain’s main energy supply right up until the 1960s. Now the mines are gone, and over the past half century the northeast has begun to reinvent itself. As part of Prospect’s work on regional devolution, a group assembled to discuss how far new sources of energy and techniques of energy provision could be part of that reinvention.
The group benefited from the presence of David Gill from Northern Gas Networks (NGN) and Jim Cardwell from Northern Powergrid (NP), the two companies that between them operate the region’s gas and electricity networks. Both are eager to find ways to build on the opportunities that devolution may offer: for instance, NGN is one of the first gas networks to use only local contractors to service gas mains. But both also need government support to achieve the full potential of some of their ambitions, such as the Northern Gas H21 project to make the city of Leeds carbon-neutral, fuelled entirely by hydrogen for power and domestic heating.
The group also included Ed Davey, who until the last election was Secretary of State for Energy and Climate Change. He deplored the government’s decisions to cut back funding for renewables and for carbon capture and storage, arguing that both were bad news for the vaunted Northern Powerhouse. The North, he argued, had the potential to become a hub for offshore wind energy, which had huge potential for cost reduction. But its potential and the scope for cost-cutting innovation were completely misunderstood by the Treasury. And the decision to cut funding for research on carbon capture and storage was equally short-sighted, given the scope for undersea storage. But the development of shale could offer other opportunities, including the potential for developing geothermal energy to create renewable heat.