Decarbonised energy systems
The first energy-related threat facing manufacturers is higher energy costs. In the short and medium term, a decarbonised energy system is likely to involve higher energy prices than business as usual. Which could prove very costly for some manufacturers. The renewable generation currently costs more than gas-fired power, and nuclear power is also likely to be more expensive in the short term, certainly involving a greater degree of construction risk for the first stations built in the UK for a generation. In the longer term, we should expect learning-by-doing (and Research and Development) to reduce the costs of renewable energy, while the prices of fossil fuels may rise – this depends on the balance between the need to extract oil from more difficult locations (technically or politically) and the development of improved techniques for accessing unconventional oil, such as from tar sands.
