:00:00. > :00:13.Welcome to Battersea Power Station in London. Can Government genuinely
:00:14. > :00:17.provide clean, cheap and secure energy? Why can't we make up our
:00:18. > :00:20.minds about the kind of energy we want? Is having only six big energy
:00:21. > :00:42.providers bad for Britain? This was once the biggest building
:00:43. > :00:49.in Europe. Now, it is one of the more derelict. Battersea Power
:00:50. > :00:56.Station was built in 1933 by Giles Gilbert Scott and decommissioned in
:00:57. > :00:58.1983. Now, it has been turned into a vast con Great Ormond Street
:00:59. > :01:02.Hospital ration of flats, shops and entertainment centres. Once it
:01:03. > :01:09.supplied half of London with electricity and was a major target
:01:10. > :01:13.for German bombs in the Second World War. They always managed to miss it
:01:14. > :01:19.year after year, but the area around about was flattened. The business of
:01:20. > :01:24.generating energy has changed hugely since the 1930s. This was coal
:01:25. > :01:30.fired, deeply damaging to the environment. Now, we want clean,
:01:31. > :01:35.sustainable energy. But we want it to be cheap, and of course, we have
:01:36. > :01:42.to make sure that the lights are kept on. These things are difficult
:01:43. > :01:45.to deliver. Nick Robinson considers whether the politicians can actually
:01:46. > :01:57.manage this three card trick. If you were asked to draw up a plan
:01:58. > :02:03.for Britain's energy needs, where would you start? Almost certainly,
:02:04. > :02:07.with a simple idea. It is energy which keeps the heart of the British
:02:08. > :02:13.economy pumping. Keeping businesses alive and growing and moving. So it
:02:14. > :02:17.is time to start thinking of those ugly cables along which our
:02:18. > :02:20.electricity flows has more like -- as more like the nation's life
:02:21. > :02:25.lines. So says the man who is Secretary of State for Energy in
:02:26. > :02:30.Margaret Thatcher's first Government. Lord Howell is president
:02:31. > :02:34.of the energy industry. Politicians are bound to be involved in energy
:02:35. > :02:39.supply because it is life-blood. It is oxygen. If the lights go off,
:02:40. > :02:44.then the social system collapses. Energy is vital oxygen for the whole
:02:45. > :02:49.system. Politicians have got a duty to ensure the oxygen flows or the
:02:50. > :02:54.blood flows. These are Britain's veins and
:02:55. > :03:01.arteries, the principle power lines that link up to form the National
:03:02. > :03:04.Grid. This is the country's national control centre in Berkshire. The
:03:05. > :03:09.exact location is meant to be a secret. The job of the team here is
:03:10. > :03:14.to keep the heart pumping, that means to make sure there is enough
:03:15. > :03:22.power to meet the demands of businesses and homes which fluctuate
:03:23. > :03:25.from second to second. You guys have to be an expert not just in the
:03:26. > :03:32.weather, but in the TV schedules? We do our best. Which are the big
:03:33. > :03:37.blips, Strictly? Strictly, sporting events, live events, you get the big
:03:38. > :03:41.events like Royal weddings. Is it particular moments in the Royal
:03:42. > :03:45.Wedding? The one cas waiting to for a kiss. After the kiss, the demand
:03:46. > :03:53.came back on again. I have seen the kiss, I want a cuppa. I have seen
:03:54. > :03:58.the kiss. Let's go back to what we were doing before. One man sitting
:03:59. > :04:03.at his desk has the job of turning power stations, on, off and on or
:04:04. > :04:07.up. Sometimes at short notice. He is doing it to meet the fluctuations in
:04:08. > :04:12.demand. Some power sources are easy to predict and control, others like
:04:13. > :04:19.wind, much less so. Getting the calculations wrong is unthinkable.
:04:20. > :04:26.Well, almost. Well, if the frequency goes too high, generation will trip
:04:27. > :04:29.off. If it trips off, you have the supply demand mismatch and we will
:04:30. > :04:34.have power cuts around the country quickly and I'm talking about within
:04:35. > :04:39.ten seconds or so. So he has to get it right? He has to get it right.
:04:40. > :04:41.The good news is he always does. Massive blackouts, that's the
:04:42. > :04:47.equivalent of a national heart attack. That's a prospect to give
:04:48. > :04:51.any Energy Secretary nightmares. You could freufb forgiven for thinking
:04:52. > :04:55.that politicians were obsessed with curbing the size of your energy
:04:56. > :05:00.bill. The truth is though that they are trying to balance three things,
:05:01. > :05:05.bills, combatting climate change, and ensuring the security of energy
:05:06. > :05:11.supply. That's what they call in Whitehall, the energy trilemma.
:05:12. > :05:15.The were first priority of any energy plan has to be keep the
:05:16. > :05:23.lights on. Headlines have warned of risks in the years ahead, as old
:05:24. > :05:26.dirty coal and owl fired power stations are closed. The safety
:05:27. > :05:31.margin between how much energy we will need and how much is generated
:05:32. > :05:37.is predicted to drop to around 4% by the time of the next election.
:05:38. > :05:45.Recently, it used to be as high as 15%. If I was doing anything in life
:05:46. > :05:49.and I only had a 4% margin of error, I would be worried? That's what we
:05:50. > :05:54.tend to deal with in the co he will room. In any given winter, there
:05:55. > :05:57.will be days when it is tying and where it is challenging. As long as
:05:58. > :06:02.the market is functioning in the background and there is the excess
:06:03. > :06:09.of potentially available supply over and above demand, we will be fine.
:06:10. > :06:14.That phrase, "So long as." Is crucial. The head of a major British
:06:15. > :06:18.company told me, they are so worried about the lights going out, they are
:06:19. > :06:21.building their own generators to make sure they are independent of
:06:22. > :06:25.the grid. Given that our energy comes from private companies, that
:06:26. > :06:30.means convincing them that it is worth spending and borrowing and
:06:31. > :06:36.building now in the expectation of earning money later.
:06:37. > :06:40.Sometimes that means big new power station or windfarms above the
:06:41. > :06:46.ground. Sometimes it means digging massive holes in the ground to put
:06:47. > :06:51.cables underneath it. To stop the lights going out, the power system
:06:52. > :06:57.needs investment and that is what they are talking about. Huge tunnels
:06:58. > :07:03.underneath the capital city to carry massive cables needed because London
:07:04. > :07:17.alone is using 5% more electricity year in, year out. The National Grid
:07:18. > :07:23.is spending ?1 billion on cables to carry electricity from TV Centre to
:07:24. > :07:27.the Olympic Stadium. Investing in going green, much more so.
:07:28. > :07:32.Particularly inside the Government. Big subsidies for wind power,
:07:33. > :07:34.promoted by the department for energy and climate change have been
:07:35. > :07:39.opposed on the other side of Whitehall by the Treasury who think
:07:40. > :07:43.gas will prove to be cheaper and what's more, it is cleaner than goal
:07:44. > :07:49.or oil. The split in Whitehall makes it hard to persuade firms to spend
:07:50. > :07:54.their money on an uncertain future. Chris Huhne was Energy Secretary for
:07:55. > :07:57.the first two years of the coalition. He blames George Osborne
:07:58. > :08:00.for the fact that money isn't flowing into green energy as fast as
:08:01. > :08:07.he wants. It was so important to bring on as much new generating
:08:08. > :08:12.capacity as possible. It would be a lot easier to do that if there
:08:13. > :08:15.weren't a mixed signals coming out of the Government and particularly
:08:16. > :08:18.sniping from the Treasury. That's been unhelpful and I can remember
:08:19. > :08:23.particular times when the Prime Minister for example, was attempting
:08:24. > :08:27.to land big foreign investments in the wind turbine industry when
:08:28. > :08:32.George Osborne decided that was the appropriate moment to say we have
:08:33. > :08:37.got to be careful about subsidies for green issues. That was deeply un
:08:38. > :08:43.ful. -- unhelpful. The Government are
:08:44. > :08:46.hoping fracking will be a cheap new source of clean energy. It helped
:08:47. > :08:52.American gas prices to tumble. The Lib Dems accuse campaigners of
:08:53. > :08:56.fracking of undermining their green dreams. One of the people
:08:57. > :09:04.campaigning, happens to be the Chancellor's father-in-law. The
:09:05. > :09:11.Energy Department is in the hands of one wing of the coalition. I happen
:09:12. > :09:14.to think they are being pursued in the wrong way and other departments
:09:15. > :09:19.are bound to say, couldn't we do this better? The answer is yes, we
:09:20. > :09:22.could do much, much better and we are doing badly at the moment and it
:09:23. > :09:26.will cause suffering and difficulty for this country.
:09:27. > :09:31.Next week, in his Autumn Statement, the Chancellor will say that he is
:09:32. > :09:37.cutting bills by picking up the cost of some subsidies for green energy
:09:38. > :09:41.and poorer households. The tax payer instead of the bill payer will be
:09:42. > :09:45.picking up the tab. That won't resolve the largely behind the
:09:46. > :09:51.scenes row about how to control the cost of what is really driving up
:09:52. > :09:55.our bills. The headlines which energy is creating now is all about
:09:56. > :09:59.the bills that we will pay now. And yet, the political decisions that
:10:00. > :10:05.need to be taken, the impact of those won't be felt for a very long
:10:06. > :10:10.time indeed. Critically, is our energy affordable? Is it green? And
:10:11. > :10:19.can politicians make sure that the lights really don't go out?
:10:20. > :10:28.The way energy is generated is something that seems to make us
:10:29. > :10:33.angry. We know how we don't want it to be generated, we just can't seem
:10:34. > :10:39.to agree on how we do want it to be done. Coal, too dirty. Think how
:10:40. > :10:44.this place used to darken London. Nuclear, too anxiety making.
:10:45. > :10:50.Fracking, too intrusive, perhaps too disturbing. Windfarms, not where we
:10:51. > :10:57.can see them, thank you very much. Where does that -- what does that
:10:58. > :10:59.leave? Not a lot. David Shukman asks why we can't make up our minds about
:11:00. > :11:29.the kind of energy we want? Protests about power. How we get it,
:11:30. > :11:49.where it comes from. Why is everyone so angry about energy?
:11:50. > :11:57.I have come to Yorkshire, a land where the rocks hold which seems of
:11:58. > :12:03.coal and where the winds race over the hills offering a very different
:12:04. > :12:08.sort of power. No single kind of energy can answer all of our needs.
:12:09. > :12:15.We have a mix and the question is how that should change?
:12:16. > :12:32.The challenge with energy is that each type of it has pros and cons.
:12:33. > :12:38.Burning coal, is cheap and polluting. Nuclear, offers a nice,
:12:39. > :12:46.steady 20%, but it is expensive. Which leaves renewables like wind.
:12:47. > :12:50.It is intermitt inintermittent, but who would want one of these on their
:12:51. > :12:58.doorstep? Those are the choices. What do we want?
:12:59. > :13:03.So how to decide what is right. Gary Smith is the conservation director
:13:04. > :13:11.of the Yorkshire Dales National Park. His priority is challenge. So
:13:12. > :13:15.he likes wind power, but just doesn't want it here. Why do you
:13:16. > :13:19.keep objecting to windfarms? I think the answer to that question is
:13:20. > :13:24.really is what we can see around us here. You wouldn't like a lovely big
:13:25. > :13:28.200 turbine farm over here, but generating a lot of power? Yes, I
:13:29. > :13:33.think as a society, you know, we ne energy. That's a given. But not
:13:34. > :13:39.here? But not in this particular location. Does that make you a
:13:40. > :13:44.NIMBY? Possibly. How conflicted do you feel personally as someone who
:13:45. > :13:49.says they are interested in tackling climate change, but as the man who
:13:50. > :13:53.not only doesn't allow wind turbines in the park, but stops many others
:13:54. > :13:58.around the edge of the park? Climate change is happening, we think. It
:13:59. > :14:06.seems like this. It. Scientists tell us, it is and we are seeing signs of
:14:07. > :14:11.how that is changing the park, but it is a slow and gradual process.
:14:12. > :14:16.It doesn't merit plastering this place with wind turbines? It doesn't
:14:17. > :14:21.merit plastering this place with wind turbines right now. Even though
:14:22. > :14:28.we are chilly. There is a still breeze coming off the hills. If you
:14:29. > :14:31.were a windfarm director, you would think this is a cracking place. What
:14:32. > :14:39.about the stuff that fuelled Industrial Revolution?
:14:40. > :14:44.Coal lies in a great mountain down the road in South Yorkshire. This is
:14:45. > :14:49.Britain's largest power station and because coal is polluting, it is
:14:50. > :14:57.another target for protest. Coal is a dirty word for environmental
:14:58. > :15:02.campaigners. Phil Garner represents the British coal industry. It is a
:15:03. > :15:05.great day for wind. There is a nice breeze and the turbines are
:15:06. > :15:12.spinning. Why do you think wind isn't the answer and that coal is?
:15:13. > :15:19.Wind is not the answer in itself. It has got a part to play, but it is a
:15:20. > :15:26.minor contributor when in comparison with a station like Drax. This
:15:27. > :15:32.windfarm over its last 12 months generated less than 1% than what
:15:33. > :15:41.Drax is capable of producing. You think that's an argument for keeping
:15:42. > :15:44.our coal stations, but building more ones? By having more efficient
:15:45. > :15:51.boilers and more efficient turbines, gives you the opportunity then to
:15:52. > :15:55.put it in storage later. That's down the track. You accept that coal
:15:56. > :16:01.right now is the most polluting form of energy, isn't it? Yes. You can't
:16:02. > :16:07.argue with that? No. Do you accept then that carbon emission have a
:16:08. > :16:11.role in climate change or could do? The answer is I don't know. I am not
:16:12. > :16:16.convinced... You don't accept the science on that? I am not sure that
:16:17. > :16:20.the science is proven, but equally, I am not sure that we can afford to
:16:21. > :16:25.ignore it. As it goes now, that power station
:16:26. > :16:30.is chucking out a lot of carbon dioxide. It is chucking out a load
:16:31. > :16:35.of carbon dioxide at the moment, but equally, it is producing a lot
:16:36. > :16:39.affordable electricity. If we don't want coal because it is too
:16:40. > :16:47.polluting or wind because we think the turbines are an eyesore, how
:16:48. > :16:54.about nuclear? To explore the nuclear option, I've
:16:55. > :17:00.come to Hardwell in Oxfordshire. This is the old reactor hall. It is
:17:01. > :17:08.amazing, isn't it? I am with Mark, an environmentalist who now sees
:17:09. > :17:13.nuclear energy as essential. Nuclear is the bright new thing. This was
:17:14. > :17:22.commissioned in 1956. It is freezing in here. It is bone chillingly cold.
:17:23. > :17:26.What was it that, is as it were flipped you into being a green,
:17:27. > :17:29.pro-nuclear convert? You have been talking about how you have been
:17:30. > :17:34.reading into the science of climate change? If you want to deal with
:17:35. > :17:38.climate change and you want to keep global temperatures rising, we have
:17:39. > :17:44.to generate lots of zero carbon power. What about wind? They will be
:17:45. > :17:49.a major part of the solution and I would like to see them upscaled, but
:17:50. > :17:52.if you do that, if you take nuclear out of the mix, you can't rule the
:17:53. > :17:56.world. Would you be happy to have a nuclear
:17:57. > :18:02.power station on your doorstep? Nobody wants to have any type right
:18:03. > :18:07.next to where they are living? No. The only acceptable form of energy
:18:08. > :18:12.is magic! It could be high-speed rail or wind turbines and people are
:18:13. > :18:18.against everything. If I had to have a power generating source near me, I
:18:19. > :18:25.would rather it was nuclear rather than coal or gas. This is one of the
:18:26. > :18:31.Government's hopes, home-grown gas, produced by fracking. But this faced
:18:32. > :18:39.objections too. I was in Downing Street as an anti-fracking petition
:18:40. > :18:49.was handed to the Prime Minister. A dairy farmer is worried that the
:18:50. > :18:53.flaking could contaminate the milk. We have said we would welcome wind
:18:54. > :18:57.turbines. I think they are attractive. I have nothing against
:18:58. > :19:02.them. You would be happy with wind? I am happy with wind. I am happy
:19:03. > :19:08.with solar. I am not a fan of windfarms. What about a big nuclear
:19:09. > :19:13.power station? No one wants nuclear. How about a coal fired power
:19:14. > :19:21.station? No one wants anything as ugly as that.
:19:22. > :19:24.Back in the Yorkshire Dales, it strikes me, we are going to need big
:19:25. > :19:29.energy projects soon and they have got to go somewhere. Whichever type
:19:30. > :19:40.of power you choose, it is going to make someone angry.
:19:41. > :19:47.Basically, only six big companies provide most of Britain's energy.
:19:48. > :19:52.Not very many and not, it seems, enough to ensure that there is real
:19:53. > :19:57.old-fashioned competition between them. Have we become stuck with
:19:58. > :20:02.them? Is the energy market simply one big fix? A question for our
:20:03. > :20:10.contributing editor this month, Hugh Pym.
:20:11. > :20:14.The energy market seems shrouded in mystery. For many us of paying
:20:15. > :20:18.electricity bills, it is hard to understand what is going on. How do
:20:19. > :20:22.our power stations link up with those bills? Is there enough
:20:23. > :20:29.competition to ensure households and businesses have enough choice? Is
:20:30. > :20:35.the market really working? I've been on a journey to try to get some
:20:36. > :20:40.answers. Starting in Suffolk near the nuclear power station, Sizewell
:20:41. > :20:44.B. There has been regulatory and
:20:45. > :20:49.Government failure. I met Catherine from the University of East Anglia.
:20:50. > :20:52.She is one of the leading academic experts on the domestic energy
:20:53. > :20:57.market. She has been following it closely since privatisation in the
:20:58. > :21:01.1990s. There is some competition in this market. I think there could be
:21:02. > :21:05.more. I think it is worrying the way profits have gone up in recent
:21:06. > :21:10.years. I think we need to really understand what isn't working. But
:21:11. > :21:16.in all the ars, you have been studying it, is it less competitive
:21:17. > :21:19.since privatisation? It certainly seems a comfortable deal that's
:21:20. > :21:28.happening at the moment. So I think there are reasons to worry about it.
:21:29. > :21:35.One issue I wanted to get to grips with, was the structure of the big
:21:36. > :21:40.energy companies. How are they organised? Do they dominate too much
:21:41. > :21:50.of the landscape? Is it a cosy club, unwilling to allow in new members?
:21:51. > :21:54.How is the house Hold market for energy supposed to operate? And why
:21:55. > :22:00.do some people argue it could be working a lot better for consumers?
:22:01. > :22:04.Most people know the majority of household energy comes from the big
:22:05. > :22:08.six suppliers, but what about power generation? Will the big six only
:22:09. > :22:12.directly or through another part of the same business group a large
:22:13. > :22:17.amount of the economy's generating capacity. Some of them supply their
:22:18. > :22:23.own gas to households as well. Critics say this link between retail
:22:24. > :22:28.and supply, so-called vertical integration, is not healthy because
:22:29. > :22:33.it makes it a lot harder for new competitors to come in and help
:22:34. > :22:37.shake up the market. Could this be an industry which
:22:38. > :22:42.works better for it's customers than energy? Airlines and airports.
:22:43. > :22:49.Ownership has changed. New competitors arrived and cut fares.
:22:50. > :22:51.John is a former boss of the watchdog, the Office of Fair
:22:52. > :22:58.Trading. He told me there are lessons here for how the energy
:22:59. > :23:00.market might be regulated. How competitive are airlines and
:23:01. > :23:06.airports? Consumers can compare fares easily. They can switch
:23:07. > :23:09.airlines. New airlines can enter the market and airlines play the
:23:10. > :23:16.airports office against each other. How does it compare with domestic
:23:17. > :23:20.energy? In domestic energy, it is difficult for consumers to compare
:23:21. > :23:27.prices and it is difficult for new players to come into the market and
:23:28. > :23:39.thirdly, all the energy retailers are integrated. Is it like airlines
:23:40. > :23:43.not owning airports? Yes, the airlines market would be less
:23:44. > :23:48.competitive and the airline example is the way in which the energy
:23:49. > :23:51.market might work better. He wants to see a full blown inquiry into
:23:52. > :23:55.domestic energy by the main watchdog, the Competition Commission
:23:56. > :24:03.just like there was a few years ago for the airport industry.
:24:04. > :24:15.It is all about allowing a level playing field for smaller
:24:16. > :24:19.competitors. Ecotricity is taking on the big six energy companies
:24:20. > :24:23.supplying electricity to households. The founder told me signing up
:24:24. > :24:26.customers wasn't easy. The switching process is complicated,
:24:27. > :24:30.unnecessarily so. It is probably flawed from a customer's point of
:24:31. > :24:34.view because the big six can make it difficult. He thinks complex systems
:24:35. > :24:38.needed by energy suppliers could deter new players from joining the
:24:39. > :24:44.market. You need a couple of million quid now to become an energy company
:24:45. > :24:51.and you know, we did it back in the early 1990s with ?10,000. It is
:24:52. > :24:56.quite different, but not insurmount ableg able. If you were starting
:24:57. > :25:01.today, would you pursue it? I often say I wouldn't do it again because
:25:02. > :25:15.it has been a battle being an independent energy company. So what
:25:16. > :25:19.are the big energy companies make of this? How competitive do they think
:25:20. > :25:25.the market is? I have come to one of the big six, E.ON to get the
:25:26. > :25:40.company's prospective on how the market is working.
:25:41. > :25:45.I was shown around the power station by Sara. She argued that retail
:25:46. > :25:48.customers could see easily what sort of deals they were getting in
:25:49. > :25:53.comparison with other offers. She said E.ON had a clear internal split
:25:54. > :25:58.between its generation activities and supplying households. But her
:25:59. > :26:01.company accepts that a full independent inquiry is the only way
:26:02. > :26:04.to test whether the market really is working. The energy companies have
:26:05. > :26:08.come in for a huge amount of criticism. Do you accept that you
:26:09. > :26:13.have got a big job ahead of you to rebuild trust? I am really conscious
:26:14. > :26:17.of the fact that you can't go out there and say, "We want to be
:26:18. > :26:24.trusted." Trust has to be earned and that's what we are trying to do it.
:26:25. > :26:29.We want to show people that we are open. We are prepared to have an
:26:30. > :26:33.organisation come in and really look into our business. I think that
:26:34. > :26:45.demonstrates our integrity and the way that we are prepared to be
:26:46. > :26:49.tested if you like. So are things any better elsewhere
:26:50. > :26:56.in Europe? How do the energy markets work there? I headed to Brussels to
:26:57. > :27:00.find out more. In Belgian and Germany and the Netherlands,
:27:01. > :27:04.competition is seen as more effective because their markets are
:27:05. > :27:11.more connected. But in others, it is a different story. The commission's
:27:12. > :27:15.top energy regulator believes there is a problem and it is one affecting
:27:16. > :27:20.the whole European Union. Is the market for UK domestic energy
:27:21. > :27:27.significantly less competitive than in other European countries? The UK
:27:28. > :27:30.situation is mirrored elsewhere and it is worse elsewhere because there
:27:31. > :27:36.are less competitors on the market. Some of our national markets have
:27:37. > :27:40.only one supplier and that is an indication that progress is being
:27:41. > :27:43.made, but it is not enough to simply to have more than one supplier. You
:27:44. > :27:47.have got to have the information which allows you to make an
:27:48. > :27:57.intelligent choice on switching which is not obvious.
:27:58. > :28:01.I have come away having heard no claim that the working is working as
:28:02. > :28:05.well as it should, but there are no quick fixes. There is growing
:28:06. > :28:08.pressure for a robust competition inquiry, but this could take a
:28:09. > :28:14.couple of years at least. Questions are being asked well beyond these
:28:15. > :28:21.thors over whether consumers across Europe get a fair deal. While
:28:22. > :28:34.wholesale prices rise, the debate will get noisier.
:28:35. > :28:43.In a few years time, Battersea Power Station will be about as different
:28:44. > :28:48.as it could be. From the purpose it was once built for. That's typical
:28:49. > :28:52.of the way things in the advanced economies are going, of course.
:28:53. > :28:56.Most, though not all of those economies, are moving away from
:28:57. > :29:03.making essentials to providing the good things of life. Here, where the
:29:04. > :29:08.clouds of CO2 once used to rise into the atmosphere, people will live and
:29:09. > :29:13.enjoy themselves. Rich people for the most part, who won't even think
:29:14. > :29:18.about how the energy it depends on is generated. Just as long as it
:29:19. > :29:26.keeps flowing and doesn't cause them any problems.
:29:27. > :29:35.Well, that's it from Battersea in London until we meet again, goodbye.