If ordinary people were in charge of the energy sector, it would drive the shift to renewables – and there would be far less waste… Feldheim, in Germany, is the most evolved example of this in Europe, and possibly in the world: it powers itself entirely on wind, solar and biogas. All the financial investment is from the villagers, of whom there are 150. The numbers are slightly messed up now by its massive eco-tourist trade, but this much is clear: when you are a stakeholder you pay less and you use less… In Britain too, an energy debate is on, and there’s much to be learnt from examples around the world…
As American economists like to observe, blaming any market failure on greed is like blaming a plane crash on gravity: gravity is always with us; what we need to know is why the plane crashed this time. When I thought that was a quote from Andrew Kliman, the Marxist economist at Pace University, I thought: “Quite so! Let’s look for some real answers!” When I discovered that it was, in fact, the neoliberal Thomas Sowell, professor at Stanford, I thought “Screw you! That’s easy to say, but gravity isn’t out to get us.” Do we accept greed as a fact of life and try to find ways of curbing it and regulating it, so that we can live with it and move forward? Or do we rail against it, and try to create social conditions in which greedy people are at least slightly embarrassed about it? I don’t have the answer to that, and it may well be the fundamental question.
But in the energy debate, there are better answers than any proffered by politicians, from Ed Davey’s recent “greed speech”, in which he said that energy companies were starting to lose public trust and were seen to be reflecting the “greed that consumed the banks”, to David Cameron’s rather bashful suggestion that what the energy industry really needs is a policy review (nobody panic – this isn’t foot-dragging; the Prime Minister said he wanted it “immediately”).
All politicians want this story to be about greed. They differ only as to whose fault the greed is, or who didn’t do enough to rein it in. This makes superficial sense: there are six big energy firms whereas there used to be 20, and these are exactly the cabalistic conditions in which greed runs riot. Cameron blames Labour for this, as the last time it was in Government it relaxed the competition law around energy. Like so much of politics that centres on whose fault it is rather than what to do about it, this is meaningless. If the Conservatives were such huge fans of competition, they would have voted against this law in the first place.
“Greed” is an unhelpful diagnosis, but the question of fault is less helpful still. And the notion of a review – into why companies who should be competing instead appear to be collaborating, and all putting up their prices at the same time, by roughly the same amount, in response to the same world price conditions which are, in fact, static – is about as much help as a price freeze at an astronomically high baseline.
Periodically, somebody raises the fact that most of our so-called big six are foreign companies, and ascribes to this their failure to take into account human considerations – like “can anybody afford it?” – when they raise their prices. This doesn’t stack up – the smallest price rise in the recent hike is French group EDF, at a cartel-busting (according to the Telegraph) 3.6 per cent. The next lowest is E.ON, at 6.6 per cent, which is a German company. Yet the highest, at an eye-watering 10.4 per cent, is Npower, which is also German. And British Gas doesn’t indulge in much nationalistic sentimentality, with its 9.2 per cent rise. The astonishing backdrop to this is that 68 per cent of people in a recent YouGov poll thought that energy should be nationalised. And even if the nationality of the sector doesn’t matter, it doesn’t follow that nationalising wouldn’t have any effect – a Government would be answerable to a populace. It would have to explain why its prices had gone up relative to the world price; it would be able to introduce tariffs in which thriftiness among the affluent could be encouraged, without resulting in even greater hardship for the fuel-poor.
But there’s an aspect of the nature of ownership that is even more important than what it does to our bills. When you own a stake in the energy you use, you use less of it. Solar Schools, part of the 10:10 carbon reduction project, has been a striking example of this. Schools have always been able to get a solar scheme off the ground with help from one of the big six; but the real behavioural change happens when they raise the money, they build the panels and they get the savings. Likewise, people can invest in a renewable project but it doesn’t necessarily change their own energy behaviour; negawatts (units of energy saved) are generated when people build their own wind turbine, and it powers their own town. “Tangibility” is the word that comes up constantly – you don’t waste it when you can conceive of the energy you have invested in coming in to your house.
Feldheim, in Germany, is the most evolved example of this in Europe, and possibly in the world: it powers itself entirely on wind, solar and biogas. All the financial investment is from the villagers, of whom there are 150. The numbers are slightly messed up now by its massive eco-tourist trade, but this much is clear: when you are a stakeholder you pay less and you use less. Naturally, at the level of the individual, this only applies to renewables. There’s no scope to buy a small share in your local coal mine or oil refinery. So there’s an inevitable slant towards sustainable energy – which is the direction I’d like to go in anyway. But if we could take ownership of energy, whatever its source, at a national level, we might see the same behavioural changes played out at that level – a real negawatt revolution. We have problems that are bigger than bills, but all the answers are eerily similar: think beyond the big six.
– The Guardian : Want an energy revolution? Think beyond the big six