On reflection, understanding the long view always matters.
Our preparations for Talk Power 2013 have got me thinking about a key theme of last year’s conference – the enduring need to keep one eye on the long term even when tackling short term turmoil.
As ever the Talk Power 2012 conference looked to the future: how do we “power on” through the current economic turbulence and invest to achieve the economic growth and sustainable future at both a national and individual business level.
It was inspiring to hear real, tangible examples – in particular from the Olympic Delivery Authority (ODA), Harrods and a little known energy efficiency exemplar, APS Salads – of how a longer term view of investing in infrastructure and investing in energy efficiency can be real practical drivers of cost reduction, new customers and competitiveness today. It’s definitely worth learning from their successes.
The value of maintaining a long term view in times of turmoil was also addressed in the opening addresses from the keynote speakers – EDF Energy’s CEO, Vincent de Rivaz, and Lord Sassoon, Commercial Secretary at the UK Treasury. (You can watch their talks in full here.)
During his opening remarks, Vincent de Rivaz remarked how the financial crisis of recent years has highlighted the importance of living within our means. Some of the problems society is facing today have come from too great a focus on maximising short term returns without properly considering our future needs, risks and opportunities, and how to answer them.
He argued that therefore we must be more forward thinking and commit to investing in the future we want to create today.
Thinking long term doesn’t eliminate the need to invest to meet short term demands. That was abundantly clear as he explained how over £1 billion is being invested to maintain and extend the life of our current nuclear fleet, maintain our two coal fired power stations, bring our new high efficiency gas fired power station on stream, and double the amount of our renewable generation capacity in operation by the middle of 2013.
But the more forward thinking investments in a new generation of nuclear power stations would bring both short and long term benefits. Short term with skilled job creation in engineering, construction and manufacturing. Long term with secure supplies of low carbon energy that are affordable and can underpin the competiveness of UK businesses as well as leaving a legacy of skills development.
With £100m committed to preparing the site for Hinkley Point Cand £15m committed to building a world class training centre at Bridgewater College, the investment is beginning to trickle through. The real prize though, is the resulting infrastructure and skills that deliver a long lasting benefit.
Lord Sassoon also argued in favour of the benefits of taking the longer term view, and how remaining resolute to tackling the important long term issues helps reduce the buffeting by short term issues that can lead to decisions driven by today’s headlines rather than tomorrow’s realities.
Speaking just minutes after the announcement of official GDP figures that placed the UK back in recession actually helped underline the importance of that kind of commitment.
He explained how the Government’s priority to tackle the deficit is about creating the conditions for sustainable growth:
ensuring UK’s credit rating is maintained
building confidence in the stability of our economy and policies
helping attract the investment needed in theUK’s transport and energy infrastructure.
It seems results are filtering through. Lord Sassoon explained how in the short term 4000 construction jobs are expected from the government kick starting 16 projects to build 8GW of new electricity generation that had been caught up in planning. In the longer term, the government’s recent agreement with the UK’s leading pension funds would unlock £20bn of new investment in infrastructure projects.
To draw a conclusion on what this means for energy professionals in British businesses: we really should be moving on from the annual procurement cycle and isolated short term energy efficiency initiatives. It’s clear that long term strategies for both energy procurement and energy management will deliver far larger and longer lasting rewards for business.
Chatting to delegates at the conference gave me the distinct impression that a sure and steady change of emphasis towards longer term perspectives was underway amongst the business community concerning. Something feels rather good about that.