04/07/2019: The week that was (w/c 24 June)

Without doubt the highlight of last week was the passage onto the statute book of the 2050 net zero target. The House of Commons voted to approve the amending order on Monday and the Lords followed on Wednesday. The Climate Change Act 2008 (2050 Target Amendment) Order 2019 duly came into force on Thursday, less than a month after the government announced its intention to accept the recommendations of the Climate Change Committee, which is remarkable all things considered. Alongside this, Prime Minister Theresa May made a statement to the House to update on the UK’s progress in encouraging other EU members to follow suit, which the French have already done.

BEIS statistics released last week showed that renewables’ share of electricity generation rose to 35.8% in Q119, compared with 30.5% in Q118, as we embarked on another record coal-free run, but of course the hard work has only just begun. The levels of transformation required across all sectors of the economy is immense. The technological landscape is changing fast, but behaviours and consumption decisions need to follow, and there remain a lot of gaps in the policy toolbox.

Community activists pulled together as Community Energy Fortnight kicked off with an annual conference in Sheffield and a wide range of local events throughout England and Wales. With the withdrawal of subsidy for low-carbon micro-gen earlier this year, Community Energy England’s third annual sector report, which was a key focus of the event, painted a bleak picture of both recent developments and immediate prospects. Nevertheless, enthusiasm levels of local activists remain high, and a number of important projects continue to be scoped, including our own Smarter Norwich project, which will have its official launch next week (3 July). The event came on the back of an ICM poll that showed eight in 10 (82%) believe that the government should be doing more to help local communities generate their own energy.

But much less positive was another vote in The House of Commons to approve the Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019 by 247 to 209. This amends the scope of the reduced rate of 5% VAT for energy-saving materials “to ensure that UK legislation complies with EU law”. This will further raise barriers to PV and battery storage developments at a time we should be looking to support supply chains, not further undermine them.

After four years of consultation Ofgem finally got around to proposing changes to the electricity generation licence to add the definitions ‘electricity storage’ and ‘electricity storage facility’ to standard licence condition one. Community developers shouldn’t get too excited by this as the generation licence only kicks in at 100MW, and even then class exemptions can be sought above 50MW. The treatment of behind the meter battery storage remains a mess.

The issue of a just transition to net zero is rightly rising up the agenda. The Committee on Fuel Poverty, which advises the Westminster government on fuel poverty and vulnerability in the energy sector, published a new Challenge Fund proposal for the period 2020-22. This aims to bring renewed focus on household energy efficiency to ensure the 2020 fuel poverty milestone is met. The fund would be mostly aimed at assisting to upgrade the energy efficiency of privately-owned properties with low EPC ratings, while also aiming to achieve other objectives such as reducing the cost of energy efficiency programmes and identifying potential success programmes to the Energy Company Obligation beyond 2022. An excellent initiative, but how will the Treasury respond?

On the transport front Roads Minister Michael Ellis announced that all charge points backed by the government’s Electric Vehicle Homecharge Scheme must be smart and able to be remotely accessed. The Scottish government also announced further funding of £20.6mn to support the uptake of electric vehicles.

In addition to preparing for our Norwich launch, I have been busy getting the message across about removing barriers to local markets. You will also now see a steady flow of sectoral low carbon and innovation news on the https://newangliaenergy.co.uk website, much of it locally focussed.

A personal highlight was the presentation I gave at the Association for Distributed Energy’s Smart 2019 conference hosted by Osborne Clarke, and the debate around it. The immediate focus was my P379 proposal for meter splitting, which is currently undergoing electricity industry assessment, and other measures needed to encourage community-based energy initiatives. I will be amplifying these themes in next week’s comment. As for P379 itself, this was debated recently by the BSC Panel, who noted progress and the issues and implications flowing from it. But there remains a long way to go.