In order to meet our rising electricity demand and our carbon emissions targets, the UK is going to need to spend £234 billion by 2025. So says the recent Ernst & Young report Securing the UKs Energy Future.

So we have a dual problem.

1. The UK’s dirty old coal plants are coming to the end of their lifetime. At present no firm plans have been made to fill the gap in energy that will grow as these plants go offline.
2. We have to reduce our carbon emissions dramatically. We therefore need to replace the old plants with low carbon technologies.

The question of how to do so drags a rather large debate along with it, and a hefty bill behind. This report assumes that vast chunks of the £234 billion needed will go towards building new nuclear power. But nuclear is proving a gamble – the only nuclear power station to be commissioned in the last decade is being built in Finland. The project is running 3 years behind schedule, billions over budget, and has seen a string of misdemeanours that would be laughable, if not so threatening. The new generation of plants that have been given the green light in the UK are unlikely to be online before we start losing power from the old coal power stations.

The report also puts aside some huge chunks of cash for carbon capture technology. (capturing carbon from power plants and storing it, preventing it from entering the atmosphere). But not only is the idea highly controversial (it got a panning in the economist recently), the mechanisms for carrying it out are far from ready and estimates of cost are between £250 million - £1 billion per power station.

So it’s all getting rather expensive, with no guarantee that the energy gap will actually be bridged, which is slightly uncomfortable in this time of economic uncertainty. The likelihood is that the cost will be passed on to the consumer.£234 billion translates to roughly £85 per household per year extra. So it’s that or rolling blackouts like those in the ‘70s.

So there’s not much positive in this report – advice on how to secure the finance is a little thin. It does, however, suggest that decent energy efficiency programmes could reduce the total cost significantly, which we wholeheartedly agree with. "Supporting and educating consumers on ways to improve energy efficiency will play a pivotal role.
Investment in energy efficiency will play an important role in achieving the industry's objectives," said Steve Jenkins, head of Ernst and Young’s energy team.

Our instinct is that energy efficiency could reduce the costs even more dramatically than this report suggests. When it takes two power stations in the UK just to keep our TVs on standby, we have a long way to go. But we acknowledge that serious investment will need to be made. As you can probably guess, we’ll be fighting the corner for renewables, and particularly small scale renewable as part of the solution. The technology exists for buildings and local communities to start powering themselves with renewable energy. Solar power, geo thermal heating, wind turbines are all tools we should be using to ease pressure on the national grid as we will be able to generate our own at home – and even top up the grid when we are not using the energy ourselves.

Instead of ploughing investment into securing and storing our imported gas for example, that money could be better used to wean the UK off gas and replace it with solar thermal and ground source heating. Instead of throwing billions of pounds into nuclear technologies, let’s invest in offshore wind farms.

But we’d like to know what you think. If you had £234 billion to spend, what would you spend it on? What is your vision of energy in 2025?

Leave your comments below. We’ll send them back to you in 2025 and have a good ol’ laugh!

Once you've had a think, take a look at Greenpeace's Efficiencity vision, but no cheating!