15th October 2019
Powering the island, in a literal sense, has been part of Chamber’s focus as part of the States’ positive efforts to devise an Energy Policy.
Chamber’s Energy Policy Head Rupert Dorey is contributing to the essential Energy Policy Consultation. He explained that his focus has been on the overall direction of policy and its suitability for Guernsey rather than becoming involved in the minutae. ‘It has been a long period of engagement which I have welcomed and I have been delighted to attend meetings and provide written responses,’ said Rupert. He writes:
‘Chamber has had numerous points of engagement with the Policy team for many months, and is pleased to support the principle aims and direction of the policy towards achieving a net zero carbon emissions target by 2050, and to enable the transition from hydrocarbon sourced energy to a one based on renewable technologies, as well as the creation of a open energy market.
The development of the Energy Policy is consistent with the recognition that structural changes are happening in energy markets globally with the increasingly rapid transition from hydrocarbons to electrification. This is crucial if the target of zero emissions by 2050 is to be achieved.
Chamber supports the open and non-prescriptive approach to the policy which will permit the development and maturation of a competitive market place for electrical energy, and which is accommodative of technical advancement in both transmission, supply and storage, as well as more effective demand management of energy resources.
While the central tenet of the Policy is net zero emissions, we note that if Guernsey has any chance of achieving the target then it will be essential to have a second interconnector for electrical supply of around 100MW, as soon as practically possible. Without this interconnector, there will be no chance of achieving the principle policy aim of achieving net zero emissions by 2050. Indeed we concur with the proposed view that much of this progress must be achieved by 2030. Furthermore, without the interconnector, which will allow electricity to flow both ways, the development of an on island renewables industry of any scale will be highly unlikely.
Chamber is attracted by the policy to develop a competitive market place for suppliers of electrical energy as this will promote innovation as well as competition, including in pricing. We note that in order for a “level playing field” to work effectively, that the distribution “grid” and supply networks will need to be separated. Chamber believes that the market for supply of electrical energy should be open to any licenced or approved supplier, but that the grid should remain a monopoly, which is accessible to all suppliers. Chamber believes that it is essential to have a monopoly for the grid otherwise wasteful competition would be highly likely.
The proposal to create an Energy Partnership, where all suppliers pay a fee to participate to supply electricity, as a condition for compliance with their licensing obligations is appropriate. It will also validate the security of having connectivity to the grid as a last resort.
Inevitably, with the development of the Energy Policy, a wholesale review of existing policy will need to be undertaken, principally along two lines
- N-2: This aged policy will become increasingly redundant, unnecessary and expensive, as new assets are installed, which achieve a far higher level of resilience and energy security , meaning that N-2 can be downgraded.
- Regulation: The promotion of competition in supply will require regulatory oversight (which is currently not required), which will unsurprisingly add some cost.
Chamber believes that the effect of the proposed policy will be for the States to have “arms length” control of Guernsey’s energy market while endowing the private sector with a high degree of latitude to provide competitive services, and to develop innovative solutions in energy supply, as well as take responsibility for its delivery.
The Policy will enhance greatly Guernsey’s energy security, provide a mechanism for competitively priced electricity, and ensure that the responsibilities to ensure a healthy environment are adhered to.
While we recognise that there remain many more “micro” factors to consider, Chamber is pleased to support the overarching policy as being in the interests of achieving an appropriate balance of security, affordability and resilience while being environmentally responsible.’
QUOTE BOX: Chamber believes that the effect of the proposed policy will be for the States to have “arms length” control of Guernsey’s energy market while endowing the private sector with a high degree of latitude to provide competitive services, and to develop innovative solutions in energy supply, as well as take responsibility for its delivery.