Devolving energy production would create cheap, reliable energy.

Why is this needed?

Cheap, reliable energy is an essential foundation to a successful society. The current energy crisis is impacting our economy, our national security and reducing living standards.

We can produce all the energy we need, cost effectively, without any claim on tax payer funds.

It would have the following effects:

  • Eliminate dependence on both foreign energy supplies and the vagaries of the wind
  • Reduce costs to businesses, especially energy-intensive businesses
  • Reduce inflation – energy costs feed into all products and services
  • Reduce poverty – energy costs disproportionately affect those on low incomes (especially heating costs)

How could this be done?

If we devolved the production of energy to regions, it would engender competition. A region that decided to use their energy-producing powers would see the benefits, and this would be visible to other regions. It would create pressure from local voters to realise these benefits.

It is worth noting that the UK has the largest known shale gas reserves in Europe. It is currently estimated that extracting 10% of known reserves would provide 50 years of the UK’s energy needs.

How could devolved power production work?

Devolved Power Generating Regions (PGR) are created. They are based on existing counties, starting in the areas with known shale gas and oil deposits and electricity producing capacity e.g. West Yorkshire, Lancashire and Durham.

The PGR is given the power to hold a local referendum, thus empowering popular influence against vested interests. This referendum provides a mandate for decisions taken by the PGR.

The following powers are devolved to a PGR

1. Energy exploration and extraction

The PGR is given the power to grant exploration and extraction licenses for gas and oil. Powers that are currently invested in various bodies, that are frequently over-ruled by a Minister, are invested in the PGR.

(see current process https://www.gov.uk/government/publications/about-shale-gas-and-hydraulic-fracturing-fracking/developing-shale-oil-and-gas-in-the-uk)

2. Energy production

The PGR is given the freedom to operate a free-market approach to grant licences for energy production. Power stations can take advantage of locally produced gas to produce electricity at a market rate. They sit outside the highly regulated market. Each PGR feeds into the national grid.Energy production is currently warped by carbon taxes, contracts for difference, infrastructure subsidies that favour wind turbines , carbon credits amongst others. These all lead to increased costs – via energy bills and taxes.

3. Community obligation

A ‘community obligation’ ensures that a percentage of the revenue generated from extractors and producers benefits people within the PGR region. For example, revenue generated in West Yorkshire PGR, could reduce local council taxes in all W.Yorkshire local authorities. The more produced, the cheaper local services become.

Each PNG could set the ‘community obligation’ percentage prior to a referendum. This incentivises power companies towards generosity, in order to win the referendum.