The Danish government last week announced that it was considering abandoning proposals to stop extracting gas from the North Sea by 2042 and will instead explore the possibility of extending licences for fossil fuel production to 2050.
Denmark is a world leader in wind energy, but it is also a practical country. Lars Aagaard, the minister for climate and energy policy, said: “I would have preferred that Europe could make do with green energy, but the reality is different, and I fundamentally believe that it is better for Europe to get gas from Denmark than from countries outside our continent.”
His colleague Morten Bodskov, the minister for industry and trade, noted that, like other countries, Denmark must “invest massively in our own energy capacity”. Yes, that means green solutions, but it also means investment “in the supply that keeps production running” while a stronger, more resilient, bank of alternative forms of energy supply is built.
This is partly a question of security for it has been apparent for at least four years now that energy and security policy are yoked together. The Danes understand that Europe requires alternatives to Russian gas and if that means more Danish gas, then so be it. A similar calculation is made by the Norwegians who also show no sign of thinking it sensible to abandon their own fossil fuel energy reserves.
No, you have to come to Britain for that sort of thing. Energy is a reserved matter and successive Conservative and Labour governments have made a monumental Horlicks of their responsibilities in this regard. Britain has some of the highest energy costs in the world and this, you must remember, is largely the consequence of policy working as it was intended to.
Meanwhile, in Scotland, the SNP can never quite make up its mind. On the one hand it deplores the additional taxes levied on energy production in the North Sea and elsewhere while also insisting, against all reason, that future extraction projects be subjected to “climate compatibility” tests that are rigged to ensure they cannot pass it. “It’s Scotland’s oil, but we don’t want it” is the new, albeit unofficial, SNP slogan.
Last week Ofgem warned that the combined power needs of 140 proposals for new data centres across Britain could amount to as much as 50 gigawatts of electricity, a figure that is 5GW more than what is required to meet peak levels of demand at present.
Plenty of these proposed data centres will not in fact be built, but Ofgem’s warning is a further reminder that demand for power is all but certain to grow in years to come. Everyone, indeed, agrees this is the case and that one of the problems this country faces is that it is, quite literally, underpowered.
That helps explain why the power that is available is also frequently very expensive. In 2024 industrial consumers of electricity paid 25p per kilowatt hour for their power whereas comparable firms in the United States paid less than 7p. Closer to home, prices in Britain are typically nearly twice as high as they are in other European countries and they are, to be clear, too high on the continent too.
It is hardly a surprise and certainly not a coincidence that energy-intensive industries in Britain are fast becoming endangered species. This is not an accident either; it is the logical, predictable, consequence of a series of policy choices that have deliberately made this a more expensive country in which to do business. As Sharon Todd, the chief executive of the Society of Chemical Industry, explained last week: “This is urgent and pressing. We’re doing some sort of national self-harm now, on quite a big scale.”
Left-wing politicians lamenting job losses at industrial facilities such as Mossmorran and Grangemouth should be forcefully reminded this is what they wanted. Closing the North Sea and ending our reliance on fossil fuels has consequences. So-called “green jobs” cannot be created out of thin air and it is, and always was, a con to intimate they could replace the oil and gas industry during some seamless and painless so-called “just transition”.
Wind and solar are important sources of power and the latter in particular may yet prove transformational. But they are not a vehicle for Scottish or even British enrichment for the very simple and persuasive reason that renewable energy may be sourced from anywhere. Oil is valuable because it is rare; sun and wind are useful precisely because they are not.
That helps explains why the claims made by Alex Salmond and Boris Johnson that Scotland and Britain could be “the Saudi Arabia of renewables” were just hot air. Renewable energy is a low return on capital sector and also, still, an expensive one.
That does not mean it does not have a major part to play in this country’s future energy mix, but it does help put that future into the proper context. Extravagant claims are often made for renewable energy, but these then typically only serve to highlight the significant gulf between alleged potential and confirmed present-day reality.
Resilience matters and renewables, while important, cannot yet offer the stability and certainty of supply that is needed. That leaves only two alternatives: gas and nuclear. It is a remarkable feature of our politics in Scotland that our political class deems both of these options unsavoury, despite them being crucial to the economic growth upon which everything else — from pensions to the NHS — depends.
No wonder the SNP prefers to offer the fantastical proposition that independence could cut household bills by a third. This number appears to have been plucked from thin air, but even if true could offer relief only, at the very earliest, at some point in the 2030s. That’s not serious politics.
But then nor is a politics that remains implacably hostile to nuclear energy and to maximising the opportunities afforded by our hydrocarbon reserves. As the Danes understand, this is also a question of security and one can only wonder why so many of our own politicians are so determined to pretend otherwise. There have been many cross-party failures in British politics in recent years, but few quite so comprehensive, foolish and self-defeating as this.