Key findings from the EMA Energy Reduction and Decarbonisation Policy survey outcome (Part 1)
Last week, there was a significant focus on the future of the energy landscape, particularly with the establishment of Great British Energy. This initiative is designed to promote clean energy, enhance energy independence, and create job opportunities. The prompt and decisive action taken by the government in introducing GB Energy just three weeks into its term is welcomed by the Energy Managers Association (EMA). However, the success of this launched endeavour will ultimately depend on the government's ability to effectively manage and operate the clean power projects.
It is essential that the government takes into account the insights and expertise of industry professionals as they work towards shaping the future of the energy landscape. Prior to the elections, the EMA gathered the views and ideas of its membership of energy management professionals who drew on their experience and expertise, and shared their perspectives on what they believe the government should make a priority. Here, we present the views and recommendations related to the first two critical priorities:
- Ensuring energy security
- Enhancing Net Zero strategy and decarbonisation goals
Ensuring Energy Security
To improve the UK's energy security, the government should focus on the following actions:
Improve Infrastructure and Research
- Ensure infrastructure upgrades to the grid are quicker
- Improve predicable supply patterns
- Increase pressure on DNOs to improve their systems, or bring DNOs into public ownership, and set them decarbonisation targets which would allow them to procure and develop the capacity they need to balance the grid a lot more easily without risking the balancing system being locked into commercial interests. It would also allow consolidation of a national demand side response system rather than a fragmented and incompatible series of markets and technologies
- Increase research on battery technology, solar cells, heat pumps, geothermal energy
Improve Resilience
- Encourage a significant increase in electricity generating capacity across a range of reliable technologies including nuclear and consistent renewables such as tidal power, whilst retaining significant fossil fuelled capacity until the alternative energy sources have been shown to provide adequate secure supplies
- Increasing interconnectors with neighbouring European countries
- Increase decarbonisation efforts
Invest in the Reduction of Consumption and Energy Efficiency
- Reduce the need for energy consumption. i.e., education, better insulation, accessible technology and solutions
- Improve transport infrastructure, especially in the countryside, so consumers don't have to use own cars to get anywhere, i.e., bike lanes off the road, more public transport that is cheaper than a car and car park
- Collaborate with stakeholders and share resources to accelerate national targets
Commit to Renewables
- Grow the UK renewable sector to be the main source of energy
- Invest in and improve renewable sites
- Re-purpose decommissioned power stations for renewable energy generation where possible
- Ban any new drilling for oil/gas and coal mining
- Make renewable application process simpler and faster
Focus on Skills
- Improve consumer and organisations' skills, incl. supply chain
- Invest in energy management and low carbon education and training schemes
Offer Clear Strategy
- Ensure joined up whole systems thinking and application across government and regulatory bodies
- Ensure a clear strategy for reducing dependency on oil and gas
- Develop existing legislation to strengthen the sustainability measures for all new builds, e.g., compulsory solar PV for all new builds. This will decrease reliance on fossil fuels including reliance on foreign imports
- Reform market mechanisms to eliminate the current market pricing mechanisms that link electricity prices to fossil fuel prices, even when renewables are used
Enhancing Net Zero Strategy and Decarbonisation Goals
To enhance the UK's Net Zero strategy and decarbonisation goals, the government should focus on the following key areas:
Clear Targets
- Lay out a clear plan and goals with certainty
- Stick to targets and succeed/fail on them. Set the target with ANNUAL metrics and KPIs to stay on track and deliver the plan
- Issue mandatory or more stringent targets, policies and penalties to energy providers
- Set clear targets for existing properties, not just new builds
- Start to link the UKNZ with legislation and set more interim targets linked to tax
Coherent and Credible Policy
- Have a wider holistic vision
- Devise a coherent energy and industrial strategy, and supporting policy for the UK, which is currently fragmented and misaligned
- Provide clear long term plans and policy for Net Zero. Net Zero being enshrined in law is not enough to ensure it is delivered
- Focus policy initiatives on the largest carbon generators, i.e., buildings, transport and generation
- Bring coherent cross government and regulator collaboration, application and policies
- Reduce red tape for innovative ideas, greater transparency in who (and why) is getting government grants/ subsidies and firm-up policy to reduce investment uncertainty
- Make decarbonisation credible, deliverable and affordable
Consistency, Clarity and Bold Decisions
- Ensure clarity and consistency of your messaging
- Commit to some longer term stability of policy
- Take bold decisions and do them now. Invest in proven, decarbonisation approaches such as energy efficiency, insulation, controls and small scale solar. Require and fund every public sector organisation to have embedded energy management knowledge and skills, and access to credible advice with ring-fenced budgets
- Set rigid dates for phase out of fossil fuels, fossil fuel cars, fossil fuel heating systems
- Focus on the truth:
- Energy efficiency reduces costs
- Carbon reductions reduce reliance on gas
- Electricity grids need to be minimised in size
- Improve EV charging infrastructure strategy
Greening the Grid
- Bolster the National Grid with balanced generation from a mix of renewables, with strengthened capacity where it's weakest but generation potential is strongest i.e., at the coast
- Promote, speed up and invest in renewables and nuclear: on shore wind, offshore wind, etc
- Make it easier to electrify, improve insulation, and re-evaluate the focus on hydrogen
- Build/deploy a number of small scale, and potentially movable, nuclear power plants
- Allow the development of onshore wind by community led groups, supported by local authorities
- Cancel subsidies for large scale biomass and fossil fuel exploration and exploitation
- Remove all government support for fossil fuels by 2025
Heat Networks
- Promptly invest and develop heat network zoning clusters, create heat network zone coordinators, and provide them with powers to issue tender contracts and regulation enforcement
- Issue nationwide heat network legislation supported by penalties for failure to comply, including the public sector
Operators and Regulator Reforms
- Re-structure OFGEM to make sure they take the view to expedite net zero actions for the benefit of consumers
- Force the DNOs / DSOs to establish 5, 10, 15-year plans to build new substations and reinforce existing ones (GSPs, BSPs, etc) for the increase in electricity demand
- DNOs should be taken into national ownership after the current RIIO period and then allowed to own and co-ordinate their own ancillary services (FFR, STOR, black start etc.) and balancing storage
- Improve connection times and performance of DNOs and ESOs in enabling projects to connect to the grid
- Reform the planning system to reduce delays to retrofit and energy projects
Education
- Refrain from dismissing the importance of climate change and educate people why decarbonisation measures are necessary
- Raise more awareness among those not in the energy industry, stricter legislation on large companies to implement initiatives, and educate on energy and carbon reduction
- Support energy efficiency with a national energy and carbon management training programme
- Reconsider regulations considered for green skills to enable easier routes into jobs, for example heat pump qualifications and the need to train as gas engineers first
Investment and Incentives
- Incentivise/penalise those organisations that are not addressing climate change
- Allow funding mechanisms for long term investment with lower taxes for these types of investment returns
- Create a carbon tax for scope 1 emissions for everyone, including the public sector
- Regulate, scrutinise and audit carbon reporting of scopes 1, 2 and 3 emissions
- Offer more funding besides schemes such as PSDS
- Provide incentives for self generation
- Make sure lenders up the heat retention clauses in home and building works' loans
Taxation
- Announce a date for changes to the tax regime around energy so that taxes are levied on gas as well as electricity - but both should be levied progressively, rising incrementally with consumption
- The fuel duty escalator should be reinstated and VED should be overhauled to penalise larger, more dangerous and less efficient vehicles
- Tax aviation fuel and introduce a frequent flyer levy
If you are interested in giving us your thoughts on the new GB Energy and the future of the UK energy industry, please email us at [email protected].