Stand by for a world energy crisis

Solarcentury’s Jeremy Leggett says renewables could power economies by 2030, but only a nasty shock will force change

Jeremy Leggett couldn’t have chosen a better time to warn that we are heading for a world energy crisis so ghastly that the Great Financial Crash will look like a storm in a teacup.

The “Big Six” energy companies are in the dock squabbling over rising charges, the politicians are electioneering with dodgy promises to reduce prices while a horrifying number of people say they will choose between heating and eating this winter.

If Mr Leggett is right, it’s not only candles and jumpers we will need but our own generators as well. And we don’t have long to stock up. He’s predicting a massive energy shock in 2015 that sends prices spiralling even higher and another financial blow-out.

His reasons are fourfold: the world’s big energy companies are running systemic risks similar to those that built up ahead of the financial crash: rub these risks together with rising world temperatures, carbon-fuel asset stranding in the capital markets leading to a carbon bubble, oil depletion, the shale-gas surprise and you get a toxic implosion.

“Even the US military now regards the world’s energy problem as a serious security issue,” he says.

 Scary stuff. Big Energy and the Opec oil producers of course deny such warnings, claiming there is enough oil to last 50 years and gas for another 250 years. But if the financial crash taught us anything, it’s that no one paid attention to the warnings, even those of the experts. It’s why Mr Leggett has written a new book – The Energy of Nations: Risk Blindness and the Road to Renaissance – which tracks oil’s inexorable price rise since 2004 and explains why we are heading for Doomsday unless governments take radical action.

Like the most committed of poachers, Mr Leggett learnt his game-keeping on the inside. He trained as an oilman, studying geology and then the history of the oceans for his doctorate at Oxford University and was funded by BP and Shell while lecturing at the Royal School of Mines. He was also a contemporary of BP’s ex-chief executive, Tony Hayward.

While Mr Hayward climbed the BP ladder, Mr Leggett turned green in the late 1980s and joined Greenpeace.

Then came the light. In 1998 Mr Leggett founded Solarcentury, now the UK’s biggest independent manufacturer and installer of  solar panels.

Solarcentury is growing fast – sales were up 30 per cent to £80.5m last year. Earnings before interest, taxes and amortization was £2.4m and it employs 130 people.

With staff Mr Leggett owns 30 per cent of the company, which gives 5 per cent of its profits to SolarAid, the charity he set up to help Africans buy solar lights instead of using dangerous kerosene ones.

As technology improves, the costs of panels are coming down, but the returns on the business are not quite as speedy as investors would like.

“One of the problems for ‘cleantech’ generally is that growth is not as fast as many venture capital firms have been used to with internet companies,” he admits.

Even so, his venture capital backer, Vantage Point Capital Partners, has stayed loyal.

As his book so cynically shows, Solarcentury has been used by prime ministers to show off their green credentials with sunny photoshoots.

“Tony Blair, David Cameron – they have all come and had a look around. They were keen and green then. But it looks as though these latest price rises may mean the end of green subsidies although the truth is all energy is subsidised.”

Yet for all his gloom,  Mr Leggett is an optimist for the long term, which is why half the book is dedicated to the road to renaissance – or people power.

“What’s so irritating is that we have all the tools in our hands now to turn this crisis around using a mix of solar, wind and water. Even at the present rate of current technology, these renewables will be able to power modern economies by 2030 and certainly by 2050. If a fraction of the money that is being spent on nuclear was being spent on solar, then we would see huge leaps in technology.”

Germany is the model the UK should be looking at more closely, he says. At least  20 per cent of energy on the grid is now renewable.

What’s so striking about Germany is that nearly half of the country’s 63,000 megawatts of wind and solar power are owned locally, either by private home owners, farmers or local communities.

“Once they gave up nuclear, the Germans have really taken to the idea of owning their own energy – and making money from it too as many of them see the future pay-backs as saving for their pensions.”

But he’s not sanguine about the UK’s ability to push through either a coherent renewable programme or challenge Big Energy, believing that only a nasty shock to the system will force change.

“If consumption in the developing world continues to increase at current rates, the consumption of oil-producing nations continues to rise, and American tight-oil production peaks in the 2017 timeframe, the cumulative impact on global supplies could be significant. The consequences of such events would be potentially catastrophic.”

As chairman of Carbon Tracker, the financial think tank, he’s put out red alerts to the highest levels, including writing to the Bank of England’s Financial Policy Committee. He claims there’s a systemic risk to financial markets because of the way that Big Energy measures its “unburnable carbon” and that their asset assessments are systematically overstated.

“Like the banking industry, we need a new generation of leaders, and companies.

“Big Energy will not change willingly. They must be forced to change.”

Yet there are progressives in government and the industry.

“There are people in positions of power – renewable energy is surprisingly apolitical – who understand what’s happening and they need to stand up and shout louder than ever. If the green technological revolution runs as fast as the digital and internet one has done, then why don’t they adapt? Why are they standing in its way?”

Start your day with The Independent, sign up for daily news emails
News
Lois Pryce... Life Without a Postcode. Lois lives on a boat with her husband.. Registering to vote in the election has prooved to be very difficult without a fixed residential post code. (David Sandison)
newsHow living on a houseboat meant I didn't officially 'exist'
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Sport
Steven Fletcher scores the second goal for Scotland
cricketBut they have to bounce back to beat Gibraltar in Euro 2016 qualifier
News
news
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing