34 insider MARCH 2015

ENERGY FORUM

WHY DO WE HAVE TO RELY ON GAS FROM UKRAINE?

SENIOR PEOPLE FROM YORKSHIRE BUSINESSES COVERING ALL PARTS OF THE ENERGY INDUSTRY CAME TOGETHER FOR

A ROUND TABLE TO EXAMINE MARKET TRENDS AND EXPLORE THE FUTURE OF ENERGY SUPPLY. TIM WYATT WAS THERE

Amid the geopolitical turmoil, the Russian rouble has tumbled in value. OPEC refuses to curb oil

extraction to help Moscow stabilise its economy. Collapsing energy prices may be good news for the motorists at the pumps and the transport industry. But the global implications are huge. And it’s not good news for everyone – especially those in the supply chain.

World events have also highlighted the UK’s over-reliance on fossil fuels and imports as well as the need to dramatically diversify its energy mix. However, there are opportunities for Yorkshire away from traditional oil and gas such as the Siemens Green Port development in Hull.

But which other renewable energy developments may boost the regional economy? What are the opportunities and what needs to change? Are there opportunities for suppliers? And how can they diversify? Will May’s election have an impact on energy policy?

JOHN FITZGERALD, port director, Associated British Ports: “In Yorkshire it’s not just renewables. Drax Power

station is spending £750m. We’re investing more in BREEAM-standard buildings than offshore wind but opportunities are being created. The whole skills agenda is an opportunity. Renewables are still more expensive, so traditional industries have to reach that balance. We have to ask what it means in the long term. People have taken their eye off energy costs because they’ve come down.”

MARK TOMLINSON, development director, Sheffield Forgemasters: “We’re an energy intensive user, and that’s an official designation which means more than 20 per cent of our GVA is spent on energy. Oddly for us, the wholesale price of electricity is not that much of a worry because that’s relatively standard worldwide. The issue is the additional costs we’re subject to that other people in Europe or beyond Europe aren’t. We’re 70 per cent export so the price we pay for electricity as a whole is critical for us and it means that any investments we make in terms of energy efficiency are really made to help us catch up with

competitors. A fall in energy prices means those investments take longer to pay back.”

STEVE BARKER, head of energy efficiency and environmental care, Siemens UK: “You’ve got to wrestle with this dilemma – or tri-lemma as they call it. You’re trying to get a se-cure supply, trying to de-carbonise the supply and you’re trying to address competitiveness and fuel poverty. That’s a difficult mix to get right, and it doesn’t fit very well within the political cycle. Clearly we need to use less – that would help everybody. You need to look at different sectors, and different types of domestic consumer because they all behave differently. Industry by and large has done quite a good job.”

JOHN BROOKS, director of planning experts Turley Associates: “We need a long-term energy policy. I’ve no idea why energy should be so politicised. As a country our aim should be for self-sufficiency. I’ve no idea why we should be relying on gas from

CENTRAL IMAGE(Left to right)Chris Gorse,

Mark Tomlinson,

John Brooks,

Stuart Harrison,

John Fitzgerald,

Kevin Ferriby,

Steve Barker,

Iain Miller,

Libbie Henderson

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insider MARCH 2015 35

SECTOR REPORTENERGY FORUM

Ukraine. There’s also a contradictory message from the government, which is in favour of energy efficiency but then you have Eric Pickles refusing permission for onshore wind turbines. Most people who have had refusals are waiting for him to go after the election. Whoever’s in power, Pickles won’t be in charge. Appeals will then be allowed. This mixed message is very frustrating.”

LIBBIE HENDERSON, real estate partner, Watson Burton: “I’m interest-ed in how the planning process works and if we can reach energy targets. Companies try and move forward but at every turn they have difficulties. It’s all about changing hearts and minds. We have to change our behaviour to make a solid policy so companies can invest with confidence. For example, if you want to put in a solar develop-ment to reduce your energy bills, how confident are you that you will actually get planning permission?”

IAIN MILLER, head of system de-sign, Northern PowerGrid: “The ener-gy efficiency agenda is real and taking hold at grass roots. When I joined the industry 20 years ago we used to

reckon it would take 2 kilowatts After Diversity Maximum Demand (ADMD), so if you had 100 houses it would take 200 kilowatts at peak. When we repeated that study over the last year or two, it was 900 watts. So was it two kilowatts 20 years ago or did we just assume that? Demand is falling away year on year. Is that because of the effects of 2007/08? I can’t predict the future but we don’t see huge growth in terms of the peak powers shipped across our system in the next eight years. We reckon on half a per cent growth. And to be brutally honest I won’t be surprised if it’s lower than that. That doesn’t mean industry isn’t growing, it means there’s an efficiency drive at the same time and they will offset each other.”

KEVIN FERRIBY, founder and manag-ing director, Informed Financial Plan-ning: “Do smaller businesses see op-portunities? People in East Yorkshire are much more cynical than people in Yorkshire as a whole. I suppose there are concerns about Hull. Are the jobs going to local people? What’s the im-pact on the local economy? However, most people are very enthusiastic and can’t wait for Siemens to roll into town.

I want the Green Port complex to be a fantastic success and stimulate the local economy.”

PROFESSOR CHRIS GORSE, direc-tor of Leeds Sustainability Institute, Leeds Beckett University: “For people in fuel poverty the situation is acute; they can’t heat their homes and we don’t have the situation under control. As soon as prices rise they are going to feel it. I don’t think the commercial sector is aware of exactly how this will hit them when prices go up. Sustain-ability is just something we are using to raise our kudos. Sustainability is low on the agenda, other than showing we’re presenting the right image.”

STUART HARRISON, business development director, Nuclear AMRC: “Is nuclear the answer? To ensure that nuclear could be attractive from an investment point of view it needs the stability of price over a long period of time. Although we have several giga-watts of new capacity in the planning, no one has made a final investment decision. When you’re talking about Hinkley, a £12bn infrastructure project, it needs that stability to build abusiness case.”

“ SUSTAINABILITY IS LOW ON THE AGENDA, OTHER THAN SHOWING THAT WE’RE PRESENTING THE RIGHT IMAGE.” CHRIS GORSE

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