The current energy crisis means there are now “massive incentives” for businesses to come up with green energy technologies that wean society off expensive fossil fuels like gas and move us towards net zero, John Hall, energy market expert and chairman of Alfa Energy, states.
[London, January 17th] — Although we are facing challenges that amount to an energy crisis that is “probably more serious than anything we’ve experienced before”, Hall comments in a conversation with Alfa’s corporate affairs officer, Jeremy Nicholson, that the private sector will develop technological solutions, in much the same way that pharmaceutical companies rose to the challenge of Covid 19.
Hall points out that April 2022 gas is trading at seven times and electricity at five times the level seen in April 2021. “The situation has become incredibly serious for industry and commerce,” says Hall, “and I don’t know how buyers of energy will cope with this level of cost.”
The intermittent nature of renewables has compounded the current crisis, with low wind speeds during 2021 forcing the UK to lean on gas supplies as economic activity began to increase following the pandemic.
Under these circumstances, Hall and Nicholson question whether renewables will ever fully replace the need for fossil fuels on their own and wonder how wind farms will reach the scale needed to support the electrification of the transport system.
As the EU considers whether to recognise nuclear power as green energy, Hall asks “Perhaps there’s going to be a revival in nuclear?” Either that, he says, or Europe will have to develop its own gas resources and reduce its reliance on imports.
“The UK imports 60pc of its gas,” says Hall. “In the short term, we’re going to be hit by these prices. Unless the government comes up with a plan to subsidise energy prices, I cannot see any respite over the next two years.”
But, as Nicholson points out, government subsidies call into question the survival of independent energy suppliers and an efficient wholesale market. Meanwhile, calls are growing for the UK government to reduce environmental taxes on fossil fuels shortly after the UK hosted the international climate conference, COP26.
The question then is how to marry the UK’s net zero targets with the desire to keep costs down? The answer, according to Hall, may lie in recent efforts by the pharmaceutical industry to combat the pandemic. “Look back 18 months ago, no vaccines were available. The pharmaceutical companies saw there was a huge opportunity. That is why they produced vaccines overnight when normally it takes 15 years. Now there is a massive incentive for innovative companies in the energy sector to do something. I think over the next few years, technology will make the difference.”
John HallChairman, Alfa Energy GroupJohn Hall joined Alfa Energy in 2013 as Chairman, where his specific interest is the development of the company’s profile in the areas in which it primarily operates – across the EU and the US. He is Fellow of the Energy Institute, a Member of the Parliamentary Group for Energy Studies, an Associate Member of the Chartered Institute of Purchasing and Supply, and a Member of the Market Research Society. He began his long career in the industry when he set up John Hall Associates in 1973, a company which merged with Energy Quote in 2009, trading as Energy Quote JHA and subsequently acquired by Accenture.
Jeremy NicholsonCorporate Affairs Officer, Alfa Energy Group Jeremy Nicholson is Alfa Energy Group’s Corporate Affairs Officer. Prior to his current role, he was Director of the Energy Intensive Users’ Group, which campaigns for secure, competitive energy supplies for UK industry. He trained as a civil engineer, specialising in infrastructure and regulatory projects for utilities and their regulators before joining the EIUG as an economic adviser in 2000. He is a board member of IFIEC Europe (the International Federation of Industrial Energy Consumers), a member of Ofgem’s Sustainable Development Advisory Group, and Fellow of the Energy Institute.
Alfa Energy Group
Alfa Energy Group is an international energy, water, and sustainability consultant partner with 200 employees over 4 international locations. For over 25 years, Alfa has been servicing its clients’ needs through energy and water management, sustainability, and compliance consulting, and an intuitive ecosystem of user-driven energy, water, and carbon management software platforms. With coveted awards, an international industry-wide recognition, and clever simple solutions, today Alfa is partnering with clients to establish and deliver pivotal net zero strategies. Through smart energy management, the expertise and diligence of its people, transparent processes, and data management, Alfa continues to lead through its recognised gold standard of service delivery.