Tuesday, January 02, 2018

The energy quadrilemma?

There's been plenty written and said about the energy trilemma - balancing security of energy supply, carbon impact and energy cost.

But there's another aspect of the energy problem which has been emerging recently - the impact on local economies of spending choices.  I'm not sure it really rates high enough to be another horn of the energy problem (making an energy quadrilemma), but it does seem to be becoming part of the way policy makers think.

To give a couple of examples, BVG recently published a think piece in which they said that when assessing energy technologies, using the LCOE metric, consideration should be given on where the spend relating to the energy alternatives would happen, and that the effect of local spend (and associated multiplier effects) should be a factor in this decision making.

In a practical application, Wave Energy Scotland argues that part of the case for continuing to support wave energy technologies is that they have the potential to create jobs in areas of Scotland where employment is otherwise hard to find, poorly paid or both.  They argue that paying a little more for wave energy, to enjoy the social benefits arising from local spending, is a factor in favour of wave energy.

In my view, it may be hard to justify a "social premium" in electricity costs for consumers, but if Governments feel that this is a more cost effective way to support local populations (when compared, say, with direct investment in enterprise and training, or in benefits), then it can't be too difficult to construct a mechanism under which Government pays these social costs.