Conference Summary: Energy Governance – New ideas, new institutions, new people

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Conference Summary: Energy Governance – New ideas, new institutions, new people

Energy Governance: New ideas, new institutions, new people

Summary of the Day

You can view the final agenda here

You can view the speaker and delegate list is here

The IGov framework that shaped the format for the day is available here

 

1. Welcome and Introduction

Catherine Mitchell’s slides introducing the conference can be downloaded here.

 

2. GB Energy Governance – Issues & opportunities

This session, chaired by Simon Roberts from the Centre for Sustainable Energy, had two keynote speakers who provided perspectives on the issues and opportunities that exist within the current governance framework that shapes GB’s energy system.

Sara Bell from Tempus Energy slides are available here: Keynote_Bell

The slides from researcher Rebecca Willis are available here: Keynote_Willis and there is a blog to accompany the presentation here: Yes, but… tales from the frontline of energy policy 

 

3. Principles for Energy Governance Change

This set out an overview of the IGov framework for institutional change, discussed the challenges that need to be met and a number of specific problems to solve. It then set out some principles for institutional reform and how these could be implemented.

Catherine’s presentation on the principles for energy governance change can be downloaded here.

The IGov Paper that this presentation was based on can also be downloaded: Governing for Innovation, Sustainability and Affordability – An institutional framework

 

4. Parallel Session One

GB Political Stability, Transparency and Legitimacy

The Political Stability session was chaired by Caroline Kuzemko from the University of Warwick and included talks from:

 

Ideas put forward during this session included a recognition that although there can be cross party agreement on long term goals such as that contained within the Climate Change Act, there is much less agreement on shorter term policy goals. Options for addressing the problems that this causes, include: delegating decisions to a technocratic body such as the CCC; finding new ways to create cross party consensus in a first-past-the-post political system; and/or using political and social feedback processes, such as those created within Energiewende. However, it was also recognised that political stability is difficult to achieve and that it might actually hinder progress when technological change is extremely rapid. A current problem was felt to be the weakness of democracy and a strong business lobby and overcoming this requires better quality governance with proportional representation and the use of positive visions. In respect of transparency it was also suggested that this solution could be a useful antidote to post-truth politics and media.

In the wider discussion the pros and cons of proportional representation were discussed. Many felt that public engagement and discussion was required to give transformational legitimacy and that continually repeating messages is important for maintaining legitimacy. In terms of leadership, participants discussed the idea that rather than democracy, the general public may just be looking for a charismatic leader.

 

Local Energy Markets (LEMs)

The Local Energy Markets session was chaired by Ben Eyre-White from BEIS and included talks from:

 

It was felt during this session that the rapid changes occurring in the energy system would intensify in the coming years – driven by falling costs for solar and storage, increased digitalisation of the system and access to much more granular data. This will further drive a need for change at the distribution level, including the role of DNOs which are expected to increasingly move towards becoming DSOs but which could go further if they became DSPs (Distribution Service Providers) which are incentivised to facilitate local system change. Issues remain for these shifts, not least the centralised design for the system – physically and in terms of the current rules, regulations and codes.

Local markets were seen to have a central role within this changing system, although governance would need to change for them to be recognised within the current system. It was felt that their emergence, which will be much closer to consumers, would help to build more trust in the system, given they would be locally based and could allow people to see the possibility for change and new ways of doing things. Some felt that the changing role of DNOs could also help create trust if they become more visible to consumers. However, there were also concerns that incumbents could take the initial lead in developing local markets and this might hinder innovation.

In respect to consumers, there was a feeling that more needs to be done to create excitement about energy at a local level and a similar level of excitement was also needed for policy makers, the regulator, etc. Work needs to be done to help people engage with the system and LEMs could help with this. There is also a need to reduce the complexity of the market and this could be done by local government, the incumbent, or social media, etc. One challenge is that local projects can remain isolated, so an issue is how to shift an excited group into an outwards movement that can share learning and enthusiasm for LEMs and energy system change.

 

The Importance of Data

The session on data was chaired by Sarah Darby from Oxford University and included talks from:

 

The presentations and follow up discussions on the importance of data fell under a number of themes:

Opportunities and barriers – data is becoming increasingly important in the energy transition, and will provide new opportunities for consumers, such as providing valuable information for them, enabling new roles to be adopted, and realising public interest issues. It also provides system opportunities by virtue of the creation of more accurate information about supply and demand, improving system efficiency, and opening up new markets. Use of big data has potential to emancipate the consumer. Barriers however include privacy/confidentiality concerns, security, and data management.

Lack of data culture – data collection and sharing within energy is limited, e.g. data on new generation connections is not shared between NG and DNOs, which has implications for planning/strategy/operation. We aren’t currently able to match gas with electricity supply data at household level. Designing data management within this ‘old world’ may mean that smart meter rollout will represent huge missed opportunity in terms of realising potential benefits.

Data and information – shouldn’t assume that data-information-knowledge-wisdom follow one another. We are focused on digital information, but other forms of information will also be important.

Rollout –  question over whether rolling out potentially obsolete technologies is necessarily a problem, especially given accepted obsolescence in mobile phones, although it was accepted that excessive costs should be avoided. Inertia in consumers (who may opt neither in nor out of data consent) means that suppliers aren’t incentivised to invest in high-resolution data. There is no business case at present. Some concern over whether DCC is fit for purpose: if successful it may be an innovative model for replication elsewhere; on the other hand it may raise barriers to entry if difficult for third sector organisations to register. A lot will depend on whether it can be innovative in terms of how data is made accessible and how date can be used (and by who).

Data as a social or private good – there was discussion over whether customer should have sole rights to data, or should social benefits of data access mean that consumer opt-out shouldn’t be allowed? It was argued that the potential opportunities of the ‘data universe’ are such that it should be regarded as critical infrastructure. Some felt that privacy concerns may be out of proportion given how many of us consent to use of data from smart phones (privacy culture may be a generational issue). The latter represents the ‘new world’ model whereby organisations (e.g. Google) provide data infrastructure for free.

 

5. Lessons from the Energiewende

Barbara Praetorius from Agora provided a detail overview on the progress that has been made and the current status of the Energiewende in Germany. Barbara’s slides can be downloaded here: IGov_Praetorius

Craig Morris from the Institute for Advanced Sustainability Studies IASS in Potsdam provide an overview of the view of the energy sector within society. Craig’s slides can be downloaded here: Morris

 

6. Parallel Session Two

Creating a people centred energy system

The session on people within the energy system was chaired by Simon Roberts from the Centre for Sustainable Energy and included talks from:

 

The presentations and follow up discussions on the role of people within energy systems came together under of a number of themes:

Definitions – what we mean by people-centred will be determined by aligning system with the experience that people are looking for. For change to be legitimate this should start from local level, from conversations about place (rather than just energy-specific needs). What does a ‘purely economic’ regulator mean, given that value judgements are inherent to the design of markets?

Rationales – need to get to the bottom of rationale for ‘meaningful engagement’. Is it tokenistic? We need to start the ‘should’ conversation with society (normative assumptions of engagement). Can we learn anything from history in terms of times when the energy system was more people-centred, i.e. ecology-centred communities?

Current system – current regulatory framework doesn’t recognise wider benefits. On paper, Ofgem good at citizen engagement, but this often doesn’t translate down into decision-making. Current regulatory system designed to be stable and predictable.

Approaches – learning from engagement/consultation approaches, for example those trialled by CSE may be useful in developing democratic processes. Emergent local politics around key (local) issues, e.g. shale gas, transmission lines, open up channels for people to engage with decision-making at local level. Not just about giving people chance to oppose, support, but to engage (meaningfully) about possible/alternative futures.

Visions – important for visions to be created locally, but embedded within national vision. Local conversations built around principle of subsidiarity. Governance framework should be reflective of speed of change within system, including changing roles of actors.

 

System Coordination

The System Coordination session was chaired by Adam Cooper from the National Infrastructure Commission and included talks from:

 

The discussions in this session focussed around four main areas. 1) There was a feeling from many that there is a growing need for an independent system operator and/or an ‘Energy Agency’ to act as a system architect, who could advise on codes and regulations and a restructuring of EMR. 2) That DNOs have a changing role and they could work more closely with local authorities to create a local system operator role, although that approach also needs centralized coordination 3) that distribution and transmission for heat and power will need to work more closely together 4) National Grid’s role needs to change, but it was also suggested that they could accommodate change and that change could be achieved more swiftly by working through the current system operator.

How to Fund Change

The session on how to fund change was chaired by Nicky Dean from Nature Energy and included talks from:

 

Three main ideas were put forward and discussed during the session. The first, based on the IGov framework for institutional reform and the likely cost implications of it. The feeling was that was it would not be costly to realign institutions along the guidelines set out within the framework, which would better suit the changes that are happening to the energy system. The second was based on the importance of energy efficiency within the energy system. This was framed as the efficiency first principle and it was argued that this should be adopted by policy makers because if it is cheaper, why wouldn’t you choose demand rather than supply. Whilst there was agreement there was a strong case for ensuring policy makers put efficiency first, it was less clear within the discussions how you get the political support for this. It was also suggested that the principle could be incorporated into the IGov framework. Thirdly the idea and merits of using local banking systems to fund energy system change were discussed.

7. The Energy Den

The conference ended with the Energy Den, where a range of people pitched (to a panel of energy ‘dragons’ ) their own personal vision for the future of the energy system, why it was important and what governance changes would be needed to realise that vision. Our dragons for the event were: Katy Roliech from Leeds University, Jeff Hardy from Imperial College and Carly McLachlan from  Manchester University. The pitches included:

  • Nicola Waters from Primrosesolar who pitched a new service to help people navigate the increasingly complex actor networks and regulations of the smart energy world.
  • Alice Owen from Leeds University who asked for particular types of support for the construction industry’s role in the decarbonisation in buildings. Alice’ slides are available here: Den_owen
  • Ralitsa Hiteva from Sussex University who argued for a new means of public engagement about the future infrastructure needs of a sustainable energy system.
  • Felicity Jones from Everoze – who put forward the winning pitch for a series of reforms to the available value of storage within the current system and a new service to help the storage sector provide ancillary services and flexibility within both the current and future energy systems.
  • Jan Rosenow from RAP who pitched for support for the idea of efficiency first, a new paradigm for the UK energy system.

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