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
Sport
footballHe started just four months ago
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect