I’d like to begin by welcoming you all here this morning, also thanking Martin (Vickers MP) for sponsoring this room and being so supportive of the industry.
Thank you also to the Minister for making the time to join us this morning.
And of course, thank you to Tom and the RWE team for making this reception possible.
It’s time for a reality check on the role of gas.
The industry has long called for ambition from the Government when it comes to clean power.
We want to see the energy transition delivered.
We know it will deliver energy security and stable energy bills in the future.
We know it will create thousands of jobs and billions of pounds of investment in the country.
And – we know it’s a huge industrial and export opportunity.
But through it all, we cannot lose sight of the vital role of gas – both in our system today, and also the role it will continue to play as we bring more renewables online.
You will be well aware of the criticisms aimed at this part of the energy sector.
The gas crisis caused intense focus on the price of gas on international markets. That was right at the time, and the response to invest in clean power is still the right choice – it’s the only way to deliver the promise of energy security and resilience, and also, eventually, it will lead to more stable, affordable bills.
But, we must recognise that the operating environment is changing and becoming more complex.
Wholesale prices remain much higher than the long-term average pre-crisis. And successive Governments have chosen to place environmental and social levies on energy bills.
This must be addressed, and I hope that tomorrow we might hear some good news from the Chancellor that will bring down bills, something we’re calling for.
Energy UK, and our members, know that we’re in a different place now in the transition.
Although prices for households and businesses remain high, the spike of the crisis has passed for now.
The coming years will be about careful balance; as we straddle the complexity of both our current system and the system of the future, our industry will need to deliver a whole range of technologies.
The Government must make some big decisions about how much new infrastructure the country needs, to build, where, at what price and how quickly it can get connected.
Underpinning these decisions, and helping to deliver the transition, will be gas.
It’s around four degrees this morning, and checking my NESO app as I do regularly says gas is powering 54 per cent of the grid right now.
The calls for gas to be completely removed from the system are simply unrealistic, and would put the rest of the transition, the resilience of our system and our energy security at significant risk.
And that’s before we come on to the impact it would have on the costs faced by customers, and the uncertainty it might cause for the markets.
You all know this, but the spotlight on gas, and the current media and political commentary, suggests that not everybody gets it.
I credit the Government for recognising the important role gas plays at the moment and the role it will continue to have in the future.
Especially recognising the current fleet of largely aging gas power stations, which need to be considered in the energy system of the 2030s and beyond, because those decisions need to be taken now.
It’s also not cheap to build new gas or refurbish existing assets. The transition for gas needs more attention.
Criticism is often levelled at the price of building new clean power assets, but the cost to build or refurbish gas stations has also increased.
They face the same global competition, with lengthy timeframes to secure the equipment needed or a grid connection – an issue that everyone in the room will be all too familiar with.
For businesses operating in this part of the energy market, it’s clear that sentiment from the Government is vital to help secure the investment needed into their assets.
The industry hopes to throw all it can at trying to achieve the clean power mission, but policymakers cannot lose sight of making the argument for the importance of gas.
After all, there is no transition without careful management of the current and future gas fleet, and support for the people who work in this part of our sector.
This really is the start of that conversation for Energy UK and the need for a reality check on the role of gas.
Thank you.
ENDS