Preparation

"Perhaps the second shot of the energy wars was fired when Scottish and Southern Energy froze their prices for 18 months..." is a sentence that will not grace the pages of history. I'm sure Ed Miliband and the lunks in charge of our major power companies would like to dream that we might all look back on this pathetic mud-slinging exercise as some epic battle, but the truth is that when the shit actually goes down, it will seem like so much window dressing on the Titanic. The undignified scramble by the Prime Minister and Leader of the Opposition to claim credit for the price freeze rather covered up the details of what this price freeze has cost. In order to maintain their profit margins, SSE are looking for 500 voluntary redundancies and ditching plans to build three offshore wind farms (which increasingly appear to be the only type of wind power the Tories will countenance). Being deeply cynical, I can't help but think that maybe this was the real purpose of the whole exercise. If wholesale energy prices fall over the next 18 months, will SSE keep those jobs or recommit to building the offshore wind farms? I think that both are unlikely, with the latter being extremely unlikely. 

Every time anyone has made a point about the high price of energy in the UK, the 'big six' energy firms bleat on about having to pay green levies, which subsidise making homes more energy efficient and the building of more sources of carbon-free generation. I can understand the energy companies not being keen on the former, as it would reduce their profits, but are they genuinely unhappy about being forced to invest in their own long term future? If this truly is the case, it shows the problem with allowing markets to regulate the energy industry: the interests of the markets are so short-termist that market-driven companies are actually willing to sacrifice their long-term profits for the sake of short-term cost cutting. 

The next intervention in this squabble came from Centrica, who said that the breakup of the big six that they clearly think will follow a competition commission investigation into the energy market will result in the collapse of investment in infrastructure and new generating capacity. They may be right: a larger number of smaller companies may well have to work together to deliver infrastructure and generation improvements that are in their long-term interests and we've already seen what these companies think of long-term interests. Why should they make any long-term investments, when they know any self-respecting government will bail them out in a future where their lack of investment has left the country's energy security in a precarious position. This is where the alleged power of the market is undermined: regardless of whether the consumer has a choice of providers, those providers know they don't have to deliver anything other than the bare minimum and they don't have to invest in infrastructure because if it deteriorates to a point where it actually threatens service delivery, the government will step in to fix the problem. The power companies basically hold the people of this country to ransom, and we have no means of redress. 

One of the reasons the EU hasn't reacted more forcefully in the face of Russian aggression in the Ukraine is that countries like Germany are reliant on Russia to supply a significant portion of their gas. This means that these countries are having their foreign policy dictated to them by their energy supplier. If nothing else is, this should be a clear indication that already energy security is national security. We don't leave the physical defence of our country in the hands of private companies (although I am aware of the amount of industry that is supported by our defence policy), so why would we leave our energy security to private companies whose apathy will soon force them hand it over to the foreign power with the greatest remaining mineral assets?

Any true historical scholar will know that the first shots of the energy wars were fired as long ago as the early part of the twentieth century, but it is perhaps only now that we start to see energy as a weapon of that war as well as it's object. Increasingly, countries like Russia will see their mineral reserves as a tool of hard power to compliment their army, navy and airforce. Our only defence against such aggressors will be to have enough alternative energy sources to render their mineral wealth meaningless. This is a serious enough threat to our national security that I don't see why the ministry of defence shouldn't be running all the power stations in the land. Obviously that is a terrible idea, given the fact that the MOD can't even handle buying weapons competently, but the consequences for our national security and independence are too serious for us to leave this in the hands of short-term profits-obsessed companies. We need a viable national policy on energy security now, and if that means nationalisation (there, I said it), then so be it. I know in a world where the right wing won the argument nationalisation is heresy, but I think it may well be a small price to pay for guaranteeing the future independence of our nation. This is a threat that no market can counter.  We need to stand up to a few company directors now to make sure  we can still stand up to despots in the future.