|Consolidation. That’s the word used to describe the situation when small, local enterprise gets wiped out, and larger business players get to snap up their assets and markets.
Decentralisation. That’s the word used to paint a vision of a future where there are more smaller, more localised production facilities, owned and managed by small, local enterprises, or by individuals, co-operatives or community-scale groups.
In the business of energy in the United Kingdom, both of these things are taking place, and creating some turbulence and insecurity.
The UK Government’s Green Deal, part of the upcoming Energy Bill, has been criticised for not being ambitious enough, for confusion over the funding (example), for being dominated by big industry players and for putting the good record of home insulation rates at risk.
Confidence is key, but unfortunately, the UK Government has a bad track record in this area, having fudged the solar photovoltaic feed-in tariff reductions, leading to massive swings in deployment, and the consequential loss of employment and firms in the sector :-
If the Green Deal does for insulation what the PV Feed-In Tariff stutters have done for solar electric, we can expect to see a number of the smaller and start-up insulation firms go to the wall – this despite broad support for encouraging smaller business enterprise in the sector. Although small insulation firms have been operating successfully independently making use of current Government policies, they may end up becoming mere lowly-paid contractors to the larger firms :-
There is perhaps an element of blather in the Department of Energy and Climate Change pronouncements, going on recent experience :-
And if that’s the case, then it is possible that the DECC have had the organic sheep-derived cavity wall insulation pulled over their eyes by the large energy players – who might not be using the Green Deal, or any other provision of the Energy Bill, to win customers.
British Gas Centrica and E.On are two industry players who spring to mind – busy training insulation installers – either in-house or by contracting in. They will possibly use the window of opportunity between the official start of the Green Deal in October 2012 to the first official schemes in January 2013 to surge ahead in offering customers their own Green-ish Deal packages based on private finance schemes, and contracting the work out to smaller firms who have had the regulation rug pulled from out under their feet.
So the minnows of energy conservation are quite likely to lose out, their business plans that rely on Government support gobbled up by the Big 6 sharks, just like the whiting of solar power were whittled away by the Feed-in Tariff seesaw fiasco, and their current market and any chance of expansion could now be suppertime snacks for much larger operations :-
One only has to look at the history of wind power development in the UK to see the same pattern – large engineering concerns have won an increasing share of the market. It makes one wonder whether the countryside anti-wind farm brigade have been sponsored by the big wind power developers, who are quite happy to take large taxpayer breaks, and even some clunky subsidies, to build wind farms offshore.
Smallscale, distributed renewable energy systems are more efficient and community ownership of projects has worked across Europe. In the UK, however, because of the ease with which people are politicised into opposing zero carbon development, we may get decentralised renewable energy, but it will probably be owned by a massive business.