CEO view: Louise Kingham, Energy Institute

Last month saw the launch of our second annual Energy Barometer report, a survey of UK energy professionals within the Energy Institute (EI) membership on issues facing the industry.

Dominating the findings is a call for greater energy policy continuity to attract investment towards the development of a secure, sustainable and affordable energy system.

For the second year running, EI members describe policy uncertainty as the biggest challenge, with a sense of pessimism about the industry’s ability to transform the energy infrastructure within the timeline, set by government, to effect the transition to a low carbon economy. No one doubts that decarbonising the energy system is achievable. Their concern is that without a clear, consistent narrative, investor confidence reduces at a critical time in energy system development. The outcome of the EU referendum adds insult to injury, because further uncertainty has been introduced and an often-quoted “stable” environment to invest and operate in is perceived now by some as less stable.

In the Barometer survey, published before the referendum result was known, energy professionals anticipated Brexit would have an overall negative impact on the energy industry – so they will be following political developments particularly closely.

The other main reason for current reductions in investment in the energy sector is the lower price of crude oil – driven by global factors over which the UK has little or no control, but where the impact is being felt.

But easing uncertainty around policy continuity is something we can influence by having a consistent narrative in place that is repeated at every opportunity – reminding us what the policy is, how we are progressing and what more needs to be done. Stakeholders need to be actively engaged in ensuring that any instruments designed to facilitate progress do just that. If and when that turns out not to be the case, or that part of the story completes, we should say so and explain our next steps for some time ahead – not change the direction without warning, which is what I believe lies at the heart of this concern about policy continuity. It’s a matter of communication, not indecision. Strengthening the narrative and aligning it with the long-term vision energy investors need will do much to build the confidence necessary for this transformation to take place.

EI members see the need to maintain the momentum towards delivering the new low carbon infrastructure as particularly important. They also tell us that better communication with the public is essential to foster the greater understanding that will enable us to deploy it. Building understanding takes commitment and trust has to be earned, and we all have a role to play here: companies by doing the right thing and acting responsibly; policymakers by working consistently from a good evidence base; others, like the EI and the media, by improving understanding and the quality of the debate. Developing positive public engagement requires a long-term commitment to get it right.

The Energy Barometer launch took place alongside the Energy Systems Conference, which the EI hosts every other year in partnership with publisher Elsevier. This event brought together key energy stakeholders and examined new thinking around the structures, processes and policies needed to develop a more integrated, intelligent energy system. Participants scrutinised the interactions between different parts of the energy system along with the role and impacts that technology, people, economics and policy have.

But most interestingly, the call that registered with the energy professionals participating was that the energy system should be viewed as one integrated system among a number that has to be developed to support society effectively into the future.