Here we go again

I’ve been working in energy long enough to remember the 1973/74 oil crisis – the supply disruptions, the UK’s three-day week. I got into this industry partly because of that experience. Now, forty-odd years later, I’ve lost count of how many times we’ve been through this same destructive cycle: Conflict in the Middle East, spike in oil and gas prices, markets rattled.

By now, the lesson should be engraved on every energy minister’s desk: Dependence on imported fossil fuels guarantees price shocks. It doesn’t matter if the supplier is from the Middle East, Norway, or the USA – the price is global. Supply shocks in the Middle East create price volatility that ripples through the global economy, often with long-lasting knock-on effects for consumers and businesses.

Worse still, energy dependence reduces political capital, you simply cannot negotiate from a position of strength when your economy runs on imported fuel. That’s a vast and often invisible cost, on top of the very visible expense of defending international supply chains.

What's different this time? We actually have an answer.

The answer to this problem is both clear and attainable: A large-scale co-ordinated shift to electrification powered by domestic renewables, with an emphasis on distributed generation. We have cheap solar and wind, cheap batteries. For the first time in my career, both the economics and the energy security argument are working in favour of a permanent switch away from fossil fuels.

Will we get to 100% electrification overnight? No, but each investment decision that moves us in that direction counts, and the effect is cumulative.

Of course, there is the argument that electrification just leads to another type of dependence, dependence on China for technology. Although this is true at the moment, there is a fundamental difference between a one-off capital investment in a productive asset generating for 25 years, and the daily flow of fuel imports that literally go up in smoke. We also have the agency to develop domestic manufacturing capabilities, diversify supply chains (India is moving fast), and build on European-developed technology.

Achieving energy independence requires long-term commitment, but it can be done. At ep group, we’ve made supply chain origin a core part of how we design systems by partnering with Pixii for European-developed battery storage and power control systems. There are also alternatives in solar, such as Australian-developed REA solar panels. The technology exists. The supply chains exist. It’s a question of choosing them.

Let’s hope the current conflict in the Middle East ends quickly, and that something resembling a just outcome for the Iranian people emerges from the destruction. This moment requires the kind of action that breaks the cycle. Let’s finally make the policies, business investments, and personal decisions that ensure this is the last time we sit here and say ‘here we go again’.

Story by ep group