Power shift

2008 is supposed to be the year of the credit crunch, when borrowing money ceases to become either easy or cheap and the bank manager stops hurling low-interest £20 notes at you and turns into Scrooge with a laptop.

Perhaps it will be, but maybe we should be more worried about another crunch, one that will soon send a chilly blast through the UK’s homes and businesses. This crunch concerns not money but energy, the energy needed to heat our houses, run our cars and power our factories.

We have already seen the first example of what is likely to be a big, across the board rise in domestic fuel bills caused, according to power suppliers, by the soaring cost of energy on the wholesale markets.

Meanwhile, speculators in the US are already betting on a $200 a barrel oil price, twice the level that is already causing motorists such pain at the petrol pumps.

Let’s all hope those speculators are wrong, but even a modest rise on the current price will be deeply unpleasant for consumers and businesses alike.

All in all, 2008 could be the year of power pain. But if the source of that pain is ‘conventional’ energy sources – namely oil, gas and their derivatives – could it also spell an opportunity for the technologies with the potential to ease that discomfort.

Whether it is an alternative fuel or generation system, a technology to improve the efficiency of power consumption or a way to monitor and regulate how much energy is being used, innovations in this area are likely to prove more attractive than ever before. Indications from the financial markets already suggest that serious investors have never been better disposed towards companies with potential answers to the big questions facing us over energy production and consumption.

So if 2008 is the year we get the energy jitters, it could also mark the moment we begin to take the alternatives seriously.

Andrew Lee