GO BIG OR DON’T BOTHER

John Boydell - Friday, 5 May 2023

As always, I’m not on anybody’s “side” politically, just trying to champion common sense.

It’s not hard to see that the future of energy is in renewables, while fossil fuels will become a transition source of energy as the new generation takes over. America knows this, as does China and the #EU. That’s where the early industries of today but the giant ones of tomorrow will be, together with the jobs they bring. America will, without the sloganeering [unless Trump returns], put America first, and China and the EU will follow suit for their own interests. This is a tough one for the UK: we’ve left one of the three big economic blocks and are now on our own. Our position in renewables has been good(ish) but we’re going to be swamped as it’s a matter of big resources to compete and we don’t have big resources. The three large #economic powers will, putting it bluntly, throw large subsidies of multi-billions at the issue to attract, today, the industries of tomorrow. It’s already started with the Inflation Reduction Act in the USA, with main industry heads saying they’ll be taking their investment and jobs there.

What’s our #Government had to say, when the following questions were raised:

Q. ‘What plans do you have to compete with the USA, the EU and China [in this arena]?

A. (Effectively) ‘The Government is actively considering the position’. That translates into we don’t have a plan. It’s not acknowledged but we don’t have the resources, even if we had a plan.

Q. Haven’t we shot ourselves in the foot leaving one of the three economic powers able to compete in this arena?

A. (Effectively) Silence.

There is the usual rhetoric about the UK being a leader, setting an example to the world etc. There have been some early initiatives but it rather smacks of the oft-repeated tale of the UK coming up with ideas only to see others pick them up and do the commercial exploitation of them. And how does that commercial exploitation happen? Well, by investing boldly to achieve credibility and scale. I’m often talking in this column about the lack of an industrial strategy in Britain. Successful strategy requires: a vision of where you’re going; a timeline to get there; a plan to get there; and implementation of that plan. We’ve drifted along for years, with flatlining productivity, being fed rhetoric without substance. It’s maddening, when renewables have, to the most casual observer, obviously been the future and that bold investment was needed, to see where we’ve ended up. Once again, it looks like the UK will?have had some bright ideas but others will grow and exploit them. Whatever your stance, otherwise, leaving the EU in the way we did has inevitably made us, at best, a minor fringe player in future green industries of scale. It's not lack of talent, it’s just mathematics. The irritating thing was it was not at all hard to see what would be needed: serious economic muscle [and we walked away from that].

How about batteries? You know the things that will fill in, when the sun’s not shining and the wind’s not blowing. How are we doing there? Perhaps there we can take big, bold steps? Er, not really. Here’s the heading of the Government’s press release of 12 April 2023: “￡30 million government boost to capture and store more renewable energy”. Now that’s going to have the three major players quaking in their respective boots and wondering how they’ll compete. The problem is, I think they’ll throw the equivalent of ￡30 billion each at it to achieve the Government’s aim [with ￡30 million] of “Government funding awarded to innovative projects that will capture and store renewable energy for later use.” It’s big investment and big numbers game: go big or don’t bother.

If the UK doesn’t have the big money required [and it doesn’t], then an alternative is to attract in investment from others that do have the money. Only, inward investment into the UK has been falling, not rising. This has, unsurprisingly, followed on from foreign perception of dysfunctional governance, weakening respect for the rule of law, some confidence-sapping economic policies and the loss of the ability to sell easily to the large market on our doorstep. Now added is the need to fund subsidies, which the UK can’t do [at anything like the scale required].

It can only be described as an abject failure of government that we: had the talent; knew what would be needed; had the opportunity to be part of it; but we blew it, together with the mass employment and wealth that would have followed. It’s not like the Government didn’t know. Its own [less than definitive] blueprint Powering Up Britain says, “Investment is the key to delivering our energy security, carbon targets and seizing the economic benefits – the jobs, exports, and productivity gains – of the transition.” Quite, but that was clear many years ago, so why are we a mathematical certainty to be a bit-player only in this huge economic journey to the future? Ask the actual Cabinet; they were driving the bus.?