Running up the down escalator

Well it continues to be very strange (and of course difficult) times, irrespective of the formal end of lockdown. I am not sure I have worked out what the new normal is yet. But days come and go, and there is definitely lots to do.

On the treadmill

There’s no shortage of energy- and climate-related news to digest and comment on, and most of it continues to be profoundly depressing. Who would have anticipated 100 degree Fahrenheit temperatures in the Arctic, never mind over such a sustained period. This comes on the back of mass wildfires in Australia, Brazil and California last year, and record average temperatures are the norm. After no rain for over a month, we’ve had rain for virtually five days solid.

The political class is beginning to show signs of acknowledging this deterioration. But we remain well-short of a coherent policy response, although the politicians can reasonably claim they have been uniquely distracted by the pandemic. The long-awaited energy white paper seems to have been pushed into mid 2021 at the earliest. And the announcements by the PM on 30 June and the chancellor on 8 July disappointed many of us and do not suggest a commensurate ramping up of net zero policies despite all the rhetoric around a green recovery, and we seem to be stuck back in the old salami slice approach to policy.

The fact remains over a year in from adoption of the net zero carbon target, we have seen few meaningful steps forward domestically. There is the consultation on clean heat and what will replace the Renewable Heat Incentive. There are also more detailed proposals for a UK emissions trading scheme. The £2bn earmarked by the chancellor for domestic energy efficiency is of course welcome, but it falls well-short of a Green New Deal. Compare this with the EU package also unveiled last week on system integration and hydrogen to get a sense of how far we are lagging behind.

We now know when CoP 26 will take place, and I’m sure we are all processing the Climate Change Committee’s latest annual progress report. If anything that has been the policy highlight of the past year, but it poses even more questions to an already long list of questions and comments on limitations of existing policy.

There is, of course, a consensus emerging around the need to “build back better”, and there has been a veritable avalanche of reports and advice on how this might be achieved from environmental campaigners, trade associations and technology advocates, all with their own sectoral spin. How the politicians are processing these pitches is hard to read. What does seem to be gaining traction is a sense that smaller programmes based around the demand side involving energy efficiency, retrofitting and EVs is an important part of the mix. Perhaps this is an emerging new trilemma around job creation, reduced consumption and wider decarbonisation. Let’s hope so.

Anyway, all of this keeps me very busy on social media at @NewAngliaEnergy, which is now close to having 3,000 followers. This is backed up by our daily news feeds on www.newangliaenergy.co.uk. These try to reflect a diversity of coverage of low-carbon developments nationally around energy and innovation but also at the regional level.

On the horizon

I continue to be busy in the early stage work surrounding RIIO-ED2, as part of the UK Power Networks Customer Engagement Group, and it is great having a front-review seat on a key regulatory process at a time when new thinking is needed.

In effect this is the first real attempt at applying negotiated settlement in the GB energy sector – something I have long advocated – tasked with ensuring the consumer perspective is properly reflected in the regulatory price resets. Drop into the mix rapidly changing views of consumers and what they expect from network services, the emergence of the DSO and the new net zero target and how networks can deliver sustainability, and I would suggest there are few more interesting places to be.

Against this background, the draft determinations on the phase 1 gas and transmission determinations landed late last week. I will be reading these with interest over the next few days, but there does not appear to be an abundance of new thinking. Returns to equity and debt are being screwed down and proposed totex awards are well-short of the calls made by the companies. The response from the industry uniformly has not been positive, with as a first step in the negotiation this is not wholly unexpected against a background of loose RIIO1 settlements.

But the devil will be in the detail, and with around 20 building blocks to assimilate so I’d better get my head down.

Up for change

Another of my main focuses – and a new one – has been Hydrogen East. We have made lots of progress over the past two weeks here, and a special thank you to Johnathan Reynolds at Opergy, who is my main fellow traveller with this initiative. We have had positive meetings with the New Anglia LEP and the regional energy committee that it has established with the Norfolk and Suffolk county councils. The way is clear now to move to a public internet-based launch, which is planned for 28 July, where we will be supported by Arup and Bernstein. Details will be posted shortly.

One of the strengths of hydrogen is its versatility both in terms of production across technologies and use by industry and individual, and also its potential as a storage and back up medium at a time when intermittent renewables is increasingly dominating the electricity system. Fold in its application in conjunction with carbon capture in the form of blue hydrogen, as well as the wide-ranging potential impacts as a fuel source for many forms of transport, and there are myriad choices. But set against this are strong sectional views about which sectors are the most beneficial and how quickly costs might fall, and we have a very disparate spectrum of views.

It really is a fascinating area of policy and ambitious plans have been issued at national level by among others Norway and Germany, and of course there was last week’s well constructed strategy paper by the European Commission, which demonstrates how far the debate around hydrogen has come in less than two years in response to tumbling wholesale electricity prices and one where, if rumour is to be believed, we will shortly have a bespoke UK hydrogen strategy.

Another factor here is a regional one. East Anglia is blessed with an abundance of new renewable energy, a dense existing gas import and distribution network that will need repurposing sooner rather than later and ambitious plans for further low-carbon development at Sizewell. And there are many possibilities around hydrogen use in large vehicles, agricultural machines, trains and shipping. In other words, we have all the ingredients for regional leadership. But it is notable that this is one of the few areas nationally that has been passed over for development funding, so we need to lift our game if the regional is to fulfil its undoubted potential.

As a first step we have set up a website at www.hydrogeneast.uk, with regular news backed up by social media, notably a new @HydrogenEast twitter feed, which is now approaching 300 followers. And I am delighted to say we have also taken on our first graduate as part of this enterprise, so welcome to Michael Brown who joins us straight from finishing his degree at UEA.

In the doldrums

Last but far from least, Community Energy Fortnight (CEF) recently ended. There were lots of highlights and as usual a great level of participation across a wide range of local stakeholder groups. The programme was kicked off by the launch of the now established annual Community Energy England (CEE)/Community Energy Wales state of the sector report, which made largely grim reading in the wake of the close down of the FiT regime in April 2019. But at the opening event CEE also issued a very upbeat 2030 “vision” document.

The benefits of hitting this goal are very significant: delivering 5.270MW powering 2.2mn homes, sustaining 8.700 jobs, abating 2.5mn tonnes of CO2, and contributing £1.8bn to the economy annually. But how it moves from the lows of today to over 5GW of community energy in 2030 is anyone’s guess without a clear 33policy framework and concerted action to support local energy.

I said this at somewhat greater length in a blog to coincide with the CEF20 programme that can be found here calling for a community energy strategy with commensurate official support. If you have 10 minutes give it as read; there’s lots in it.

Anyway, stay well and I’ll be back in touch shortly.