Policy

The subtle redesign of Germany energy policy agreed by the government in Berlin last week sends some important signals not for the German market but for the rest of Europe. Far from damaging the renewables business the move could be the salvation of the sector. Other countries, the UK included would do well to adopt similar measures. This would be the most effective way of responding to the urgency expressed in the latest IPCC report. Read more

The full-scale competition review of the UK’s energy market which will be announced later this week is a challenge the industry should welcome. The inquiry will absorb a huge amount of time and effort over the next year but it offers the chance both for the industry to clear its name by removing the cloud of public suspicion over pricing policies and simultaneously for individual companies to examine their own strategic positioning in a market which is changing rapidly.

Of course, the competition review will add to uncertainty and will reinforce the reluctance to invest in new generating capacity, which is already evident, but the sense of doubt will exist in any case, and the review may help to produce some longer-term clarity. In the short term the government will have to find a new mechanism to ensure that supply is adequate to meet demand – and doing so with an expensive plan for emergency electricity supplies. But that is a separate issue from this fundamental analysis Read more

Energy is a business where success and failure are determined by technical skills and deep commercial expertise. That is true – up to a point. But consider the range of issues facing the world’s largest energy companies in 2014:

  • how to handle the deterioration of relations between Russia and the west;
  • how to build businesses in the world’s growth markets such as China and India;
  • how to manage the complexities of working in areas such as north Africa where physical security is being compromised by the presence of terrorists groups and the absence of effective governments;
  • how to manage the very different attitudes to energy in different markets such as the German opposition to nuclear or the French opposition to oil and gas which happens to come from shale rocks.

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Older UK readers will remember the Green Goddesses – fire engines held in reserve for moments of national emergency. At the height of a crisis army drivers would maintain an essential service. Well, lo and behold, some new Green Goddesses are to be created as the government launches its “emergency electricity reserve”. Read more

What happens now for the numerous companies, led by the oil majors, who have chosen to invest in Russia? The surprising answer may be that the short-term risks are less serious than the longer term prospects of disengagement as energy consumers, especially in Europe, reduce their dependence on a supplier they do not trust. Read more