There has been a lack of a strategic energy policy in the U.K. and many years have been wasted. Now, in order to comply with the Kyoto Agreement and European Union legislation, Labour and Conservative, the two main political parties, acknowledge that the U.K's. energy needs must be achieved on the basis of a low-carbon economy.

Attention has been drawn to the number of staff employed by the Office of the Gas and Electricity Markets (Ofgem) that now exceeds 400. Changes are being considered, particularly by the Conservative Party, to refocus Ofgem to be solely responsible on industry regulation and customer service relieving them of any responsibility for the energy policy. The Department of Energy and Climate Change would then be responsible for supplying other services. The leaders of the top energy companies frequently complain of the lack of government guidance and direction on renewables, carbon-reduction targets and a host of other key issues.

Public Opinions Sought

Major infrastructure initiatives for energy generation and new transmission lines are on the table, and we are now providing members of the public the opportunity to express their views. Environmental impact statements still need to be assessed in detail. However, the changes should make the system for approving important infrastructure projects quicker and more efficient.

The EU expects all member states to supply 20% of their energy requirements by 2020 from sustainable forms of energy, namely wind power on and off-shore, landfill gas and biomass projects. Smaller contributions could be available from solar, geothermal and wave power that is now under development.

However, we should acknowledge that the installation of wind farms is now gaining pace with licences being offered for off-shore wind farms all around the U.K. coastline. This programme is being heavily subsidised by the U.K. customers in their energy bills. Furthermore, we should appreciate that with the EU Emission Trading Scheme, it is costing U.K. customers some £80 per annum.

With the number of large wind farms seeking a connection to the extra high-voltage transmission system, National Grid has expressed concern on system stability if the 20% limit for generation from wind farms is achieved. Similarly, the distribution network operators also will be concerned if there is a large uptake of microgeneration projects.

To comply with EU legislation, all customers in the EU member states must have a smart meter to monitor and record their energy consumption by 2020. The government is aware that some 26 million meters will need replacing within 10 years.

Nuclear Expansion

An increase in the number of nuclear power plants appears to be the only available option to meet the U.K.'s increasing demand for energy. As resources of fossil fuel in the U.K. have diminished, the coal industry hardly exists, and gas and oil reserves in the North Sea are rapidly becoming exhausted. Potential sites for new plants have been identified, some of which will be at the existing sites.

On Nov. 9, 2009, the Energy Secretary Ed Miliband announced in the Houses of Parliament the expansion of Britain's nuclear power capability identifying the 10 sites that will be used to accommodate the new generation of nuclear power plants. The sites include Braystones, Sellafield and Kirkstanton all in Cumbria, Heysham in Lancashire, Hartlepoll in County Durham, Sizewell in Suffolk, Bradwell in Essex, Hinkley Point in Somerset, Oldbury in Glocestershire and Wylfa in Anglesey. This should result in nuclear power being used to supply 25% of the country's electrical energy by 2025, compared with just 13% as of present.

Understaffed to Accomplish the Tasks

Statistics indicate that the current shortage of engineers and qualified craftsmen will continue to increase, and by 2015, an extra 9000 skilled workers will be required in the industry.

The problem facing energy companies is the lack of training facilities, which are required for the large number of staff to replace the customer metering. Ofgem, which is responsible for undertaking a price review of distribution companies every five years, apparently excludes any allowance for training. Note that staff recruitment and training programmes for the engineering activities were victims of the industry's privatisation, so network operators are now obliged to employ contractors for the majority of their engineering operations.

Lord Jenkin of Roding serves in the Upper House of Parliament. He served posts in the Conservative Governments under Prime Ministers Edward Heath and Margaret Thatcher before moving to the Upper House of Parliament in 1987.

Editor's note: This commentary is the outcome of an interview with Lord Jenkin by International Editor Gerry George.