written by Sean Blake

Having read numerous reports and articles on energy developments, the common focus points seem to revolve around increases in consumer costs and tax rates.

What of the legal requirements placed on these companies and the efforts underway to develop cleaner energy sources for the future?

The Energy Act 2013 entered into force on 18/12/2013 with the aim of reforming the energy market. There is growing consensus globally that the activities of powerful energy companies need to be monitored with greater stringency. The regulations in place are always rolling forward to ensure companies remain in check however there will always be those who identify loopholes. A principal action point identified in the Act is low carbon electricity production. How this will be achieved is not outlined and therefore creates a very vague requirement upon the companies subject to the legislation. Surely a more accessible guidance document with the targets set by companies within the industry would improve transparency, credibility and customer trust enormously? After much digging around, I stumbled upon some targets; mainly as released by CSR departments, but how much of this is merely for show and how much are they enforced? To what extent is performance monitored and verified?

There are usually also periodic advertisements released on flyers – it is easy to identify these materials as they often appear with very glossy ink displaying countless figures on improvement. Would a ‘.gov’ website or a published Ofgem managed database be more useful? A place to go where companies are monitored for their improvements and simple, easy to compare figures are displayed?

At EU level, the Europa website released their planned consultations for 2014 including the progress toward 20% energy efficiency target for 2020. This should bear useful insight into how the Union views its energy efficiency progress. The EU has made significant steps toward its goal of a more environmentally aware Union. Issues faced by the Union are what slow this progress down. The inclusion of new member states is the desire to strengthen and broaden the Union, but with this comes the issue that some states are less wealthy and investing in environmental change can detract from other requirements to satisfy their membership. This could be the basis from which the planned extension of the energy efficiency target to 2030 will occur.

It is easy as a spectator to air the viewpoint that energy companies should invest more heavily in renewable forms to reduce their carbon output. But unfortunately, not everything works on electricity and this would detract too greatly in cost from other ventures. Oil and gas companies will seek to meet demands of the customers as any profitable company seeks to do. But advances in processes used in this field do have to capability to yield benefit. By developing their gas to liquid efficiency (see Shell groups liquid to gas project online) the demand for greater numbers of wells could reduce. This science is groundbreaking and incredible to study (albeit not too publicized for lucrative reasons), but the methods are constantly evolving. An example of the developments made includes the rapeseed oil to fuel process that produces water as its by-product, this through treatment can in theory provide water safe for human use. At a broader level these advancements help in the shift towards a circular economy.

The legislation from parliament, if the time was taken, could be used as a tool to encourage these advancements and reductions. For the European parliament and Union as a whole to encourage this implementation requires more forethought, those ‘weaker’ countries that need the time to develop to a standard on par with the rest of Europe would need a form of lee-way to enable development in line with energy standards. Of course, imposing general requirements on certain member states and not on others would not sit fairly under the mantra of a fair and equal Union.