New Government, Uncertain World : policy, discontinuity and risk in energy markets - Conference Theme

This conference will focus on the recent upheavals in global energy markets and their impact on UK energy policy as we move into a new parliament.

Whether it be the 2014 collapse in oil prices, the US-China climate policy accord, falling demand in the OECD or the falling price of solar, the energy arena has a tendency to throw up unexpected changes, opportunities and challenges. This conference will bring together experts from the energy industry, the financial sector, the policy community and academia to explore the challenges faced by the new government in pursuing policy goals,  given  continuing and often unanticipated developments in energy markets. It will look at how policy affects investment, innovation and emissions reduction in this rapidly changing world.

We will be running 4 sessions throughout  the course of the day.

Discontinuities in global energy markets

The first session will explore some of the recent global discontinuities affecting the energy landscape and how they have shifted expectations and  generated uncertainty about future policy and investment. Key global discontinuities to be discussed in this session include the recent major shifts in oil and gas prices, uncertainty caused by geopolitical tensions and climate policy, and emerging evidence of disruptive technological innovation. Recent oil price volatility has taken its toll on energy investment and finance, but also opens up the opportunity to reshape fuel subsidies and taxes to encourage the uptake of low-carbon energy. Meanwhile, in an uncertain investment climate, geo-political risk and climate policy are wildcards that cannot be ignored by decision-makers. The drive to lower emissions is also driving innovation and a focus on different technologies. This session will explore the winners and the losers from recent economic developments, and will look at the key new energy technologies and their potential to deliver disruptive technological change in the future.

UK energy policy and investment in an uncertain world

Session 2 will explore how the recent discontinuities in the global energy landscape have impacted UK energy policy and investment in the energy sector.

With a new government taking the reins, this session will explore the continuity of UK energy policy and ask, Can UK energy policy survive the next change of government? The volatility of oil prices is taking its toll on the UK oil and gas sector including the North Sea, affecting everything from jobs to the viability of CCS plans. The legacy of economic austerity also raises issues over the affordability of UK energy policy, and how this relates to other macro-economic policy goals such as deficit reduction. This session will also consider the UK’s energy strategy in a global context, examining how it is likely to be impacted by the discontinuities identified in the first session, as well as by broader global trends in climate policy, and developments in key options including renewables and nuclear.

Panel discussion: UK energy policy: triumph or travesty?

This session continues the discussion on UK energy policy initiated in Session 2, but in the format of a chaired panel discussion. Each speaker will introduce their chosen theme, and then respond to questions.

The four panelists will discuss whether the UK has a coherent energy policy, and what the balance should be between regulation and markets in implementing the policy goals. The prospects for the Electricity Market Reform (EMR) regime introduced under the Coalition government and the Levy Control Framework will be discussed, along with the pressures that these will be subject in the context of wider global shifts discussed earlier. The session will explore issues such as the viability of the CFD mechanism given the volatility of fossil fuel prices, and the impact of economic and financial constraints on the decision environment for allocating resources. With continued uncertainty over the long-term composition of the European Union, this session will also examine whether UK and European energy policy can be successfully integrated.

Innovation and the path towards decarbonisation  

The final session will examine the path to decarbonisation from a global perspective, with a particular focus on the role of innovation and technology in context of the shifting expectations and uncertainties faced by the energy sector.

The three key themes of this session are fuel substitution, energy efficiency trends and renewable energy. Innovation is an important driver in each of these three areas, so the extent to which innovation can facilitate change and the models that exist for this will be considered. The fuel substitution topic will consider the heating and power sectors, as well as the transport sector, looking at topics such as the role of electricity and biomass in decarbonising heat; the future balance between coal, gas and renewables; and the outlook for electric vehicles given recent volatility in oil and gas prices. The energy efficiency discussion will look at the degree to which the era of high oil prices has led to lasting improvements in the energy efficiency of buildings and vehicles, and whether these may be reversed given recent price trends. The session on renewables will consider whether real progress has been made, and how technologies such as energy storage might affect the speed of uptake of renewables around the world, and how this maps onto UK conditions and resource endowments.