“Sorry, can I interrupt you there.”
11th Nov 2024
It’s a very English trait, being overly polite and apologising ahead of acting is just one of those behaviours we have grown up with.
But being interrupted was back in the news this week, following the ‘independent’ NESO report into Clean Power 2030.
Now back in the 1980s (that’s pre-emails and internet kids) I was a bean counter in the car industry and I have some direct experience of interruptible energy contracts. It was my job to do the sums around procurement of the gas contracts – with a choice between interruptible and non-interruptible supplies. The arithmetic boiled down to paying more per unit of guaranteed supply versus a cheaper annual bill but a risk of closing down the plant at certain times of the year, at short notice and outside our control.
Yes, we would lose production and the workforce would lose whatever overtime pay they thought they were getting but the plant avoided eye-watering penalty payments, especially if we could shed sufficient demand. Guess what, it was my job to do that too. Get it right and I’d get a pat on the back, wrong and a verbal volley followed (yes kids, senior managers were allowed to shout and scream at you in those days too).
So, the idea, promoted by NESO, of ramping up “flexibility” of demand I thought was brave. I know the arguments for it but as far as industry is concerned, the more we switch to an electric future, the greater the requirements will be for demand flexibility. But what about the impact on a typical manufacturing plant?
It could permanently increase its cost base, making it less commercially competitive but avoid interruption or take the hit and risk a loss of production and consequent sales. Neither option feels right but in isolation, a delayed sale is still a sale. However, in a global economy, with Just In Time stock levels, UK manufacturers need to be permanently price competitive and have products available. Our competitor nations will swoop otherwise. Unencumbered by the restrictions suggested by NESO, the UK is increasingly isolated this way.
Don’t believe me? Well in further news this week, the USA (5 billion tonnes of annual carbon emissions) just elected a climate sceptic President; the German government has just fallen with net zero at the heart of the disagreement and China continues to emit 12 billion tonnes of carbon into the atmosphere each year while boosting its manufacturing capacity.
Mike Foster
EUA's Chief Executive
Recent Blogs
-
2nd Dec 2024
-
25th Nov 2024
-
18th Nov 2024
-
11th Nov 2024
-
4th Nov 2024