New Thinking: Local energy, multi-level change, and governance
Richard Hoggett, IGov Team, 25th June 2016
I recently went to a Westminster Energy Environment & Transport Forum on the Next Steps for Localised Energy Projects and Community Energy. These type of events are great for hearing a range of perspectives on how the energy system is changing and getting insights into how different actors are doing different things. It can be easy to forget how much has happened over recent decades and years in terms of generation, transmission and distribution and how things that felt like tomorrow’s world 5 years ago are now becoming the norm. It can also be easy to lose sight of how much further we have to go, and how quickly that needs to happen, in terms of system decarbonisation – especially with respect to the heat and transport sectors.
The meeting provided me with three big takeaways, all of which have been central to the work we have been doing in the IGov project over the last 6 years in terms of system innovation and governance.
- Firstly, the need for much greater effort to engage and work with people in the system, in their multiple roles as consumers, customers and citizens.
- Secondly, the growing importance of place and looking at change from the bottom up, top down and middle out – and the new actors that this brings into the system at these multiple levels.
- Thirdly, how can change be coordinated across these different levels to ensure that we are able to decarbonise at pace; securely, affordably and equitably.
Starting with people, there was consensus on the importance that people will play in the future system. This is partly because many of the changes that are occurring in the energy system are closer to people and the demand side (be that in their homes or places of work or in terms of new infrastructure within their locality). There is however a wider issue. From a people perspective, decarbonisation to date has been fairly easy and mostly out of sight – progress has happened upstream in the power sector, mainly through the dash for gas and more recently a shift out of coal. This hasn’t required much from the public in terms of consent or action. However, we are now moving into a much harder phase in the transition – decarbonising transport and even more complex, decarbonising heat. This is much closer to people in terms of lifestyle choices and behaviour and the buildings we live in, work in and move between. Can we realistically decarbonise power, heat and transport without the active engagement of people? Few people working in energy system change think so – people need to be put into the centre of the system, a research area IGov is currently working on.
This then raises the question – how can we do that? Community energy projects are a well-established route that offer tangible ways for people to engage in the system. They can also secure ownership, control and local benefits of projects and the processes by which they come about; often delivering a range of economic, social and environmental benefits. They already bring considerable value and they have the potential to bridge important gaps as the energy system becomes more local. However, how to engage the wider public, or at least those that have not engaged to date, is a key issue. Some think that smart meters, behind the meter technologies and automation will allow and enable people to become more engaged. Some feel that the complexities of getting value in the system by flexing demand at home may mean that many people would seek a trusted intermediary to do all of that for them, based on a financial reward and more general shift in companies away from selling energy to selling services. There remains a lot of uncertainty about how all of this will play out. As yet there is limited effort to try and start a conversation with people at a national level, or even move beyond seeing them as simply consumers – something other countries are well ahead on.
The second area at the event was the growing role of actors below the national level. Many commented on the importance of regional actors as a new level of governance within the system and many talked about the importance of local authorities in being an enabler of change in local areas, although this was recognised to vary across the country, with budget and officer constraints a growing issue for many. To this extent, UKERC produced a very useful analysis on what we know about local authority engagement in the UK energy system recently. One of the arguments we have been developing in the IGov project is that we need a fit for purpose energy governance framework for the UK energy system; and part of that is that we need to align governance from the top down, bottom up and middle out in order to optimise the system. You can’t look at one part in isolation from a whole systems perspective. Moreover, focusing on one area (for example, top down) de facto privileges that area over the others.
The third area was coordination. It is important to recognise that change is happening anyway, and in some respects is unstoppable. This raises questions about what this means for a national approach to a low carbon future. This not only about people and/or communities taking action, but also about bigger strategic infrastructure decisions on transport, air quality, big generation projects etc; as well as the work that DNOs, gas networks and National Grid are doing. The role of policy and regulation within all of this was also recognised as important. Few felt that there was much coordination currently.
Given that the system is changing quickly and involving multiple actors, across different vectors, with a variety of technologies at different scales, a key question which seemed to emerge for me was: where is the oversight and coordination in all of this? How can change be coordinated to ensure that the ‘right’ sort of changes are taking place, or at least how can it be coordinated to ensure that the ‘wrong’ options; options that could cost more and hinder change don’t come forward.
IGov has put forward its own ideas on the need for coordination and it is a central theme of our current work that includes a proposed governance framework for system change at the national level. We are now looking at local and regional governance frameworks and how these can feed into a national framework so that together, coordination is at the heart of the governance framework.
It seems to me that local energy system thinking and change is central to cost effective decarbonisation, as change should be based on place – it’s at this level that the best options for demand and supply can be understood and optimised. However, understanding how local energy in any area links to, and interacts with, neighbouring areas is vital; as is understanding how this bottom up approach relates to regional approaches and feeds into the national picture. It is clear to me that the energy future is increasingly about multi-level governance and coordination because it seems that this is the best means of optimising the whole system – and it’s the area of work IGov is now focusing on.
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