Transformation Moment
4. Towns and cities; joining the big 600 million.
The real drivers of today’s change are as likely to be found outside national governments as inside. The largest of these movements is the recently formed Global Covenant; an agreement signed by the Leaders of over 7,100 of the world’s major towns and cities.[61] As Michael Bloomberg said at its launch in June 2016,
“Today, the two biggest coalitions of cities in the world – the EU-based Covenant of Mayors and the UN-backed Compact of Mayors – are forming an alliance to link more than 600 million city dwellers in the fight against climate change.
Cities are key to solving the climate change challenge. They account for most of the world’s carbon emissions, and mayors often have control over the largest sources. Just as importantly, mayors have strong incentives to attack those sources because steps that reduce carbon also improve public health and strengthen local economies.”[62]
Europe already has a strong EnergyCities movement of over 1,000 localities, with several leading the race within a “POst-CArbon CIties of TOmorrow” project.[63]
The excitement contained within this movement brings its own challenges, not least the challenge of leadership. The local is losing patience with the national. The most visionary leadership increasingly emerges from towns and cities with little interest in the constraints of yesterday’s technologies and yesterday’s politics. The scene is set for numerous conflicts both between Big Society and big business, and between the local and the national. Even now, you can see this being played out.
“One example of the growing friction: Oslo, where left-wing authorities are at odds with Norway’s right-wing government over their push to more than halve the capital’s greenhouse gas emissions within four years, to about 600,000 tonnes – one of the most radical carbon reduction intentions in the world.
The plan for the city of 640,000 people includes car-free zones, ‘fossil-fuel-free building sites’, high road tolls and capturing greenhouse gases from the city’s waste incinerator.
In a sign of city power, a 2016 study projected that climate plans by cities and regions could cut an extra 500 million tonnes of annual greenhouse gas emissions by 2030 – equivalent to the emissions of France – beyond cuts pledged by governments.”[64]
Globally, all the energy market ground rules are set to change. The market influence of 600 million city dwellers makes this a certainty. They will be joined by millions more, in rural and off-grid communities, in both industrial and developing nations of the world. What needs to be addressed is how best to shape this transformation ‘in the public interest’.
Britain’s towns and cities could also provide the leadership parliament currently lacks. A UK ‘right of local supply’ would offer immediate connection to Global Covenant transformations that other city leaders are able to promise. It is a leadership that begins and ends in ‘clean’.
For a long time London looked to have taken the ‘local supply’ lead, with proposals for a License Lite shell company. This was to allow Londoners (or at least London Underground) to buy back clean electricity they produced for themselves. The gestation period for License Lite, however, has tested the patience of even its most ardent supporters. The new Mayor promises to turn this into something real and transformative. Londoners hold their breath.
One municipal energy company, however, did make it through the bureaucratic nightmare of Britain’s regulatory processes. This was the Robin Hood Energy Company in Nottingham[65].
Robin Hood Energy is the first, not-for-profit, municipal energy company to be formed in Britain since 1948. It still has to offer 4 tariff rates (an Ofgem requirement), but the lowest of these tariffs is specifically for those who live within Nottingham itself.
Robin Hood offers a lower local rate by keeping overheads down and reinvesting all surplus revenue back into the company. Its 40 staff members do not receive bonuses and its directors are not paid a salary.
Robin Hood has its drawbacks. It is not a ‘clean’ energy company and has no network of renewable energy suppliers. But is is ‘local’, and its business model – as a not-for-profit, municipal energy company – may provide the breakthrough Britain has been looking for.
Already, cities like Manchester, Leeds, Liverpool, and Newcastle, with their own ambitious transformation plans, are looking at the Nottingham model to see if it can be borrowed, copied or ‘white labelled’. This may be the easiest way for other localities to join the energy game. But what follows must be Robin Hood ‘plus’ – ‘plus’ being the right to take clean energy before dirty, the right to save, store and share locally, and a duty to reduce overall energy and carbon consumption.
In this journey, Robin hasn’t been alone. Merry Bands of men and women have been working on it all around Britain’s ‘energy’ forests.
In Wadebridge, North Cornwall, – where 1 in 10 homes already have solar roofs[66] – a pioneering partnership between WREN (Wadebridge Renewable Energy Network), the consistently innovative RegenSW, electricity supplier Tempus Energy, and Western Power Distribution, has launched a unique project in Great Britain.
WREN offers cheap electricity, at fixed times every day, 
when solar power drives down electricity wholesale costs.
Their ‘Sunshine tariff’ offers daytime electricity at as little as 5p/kWh, but higher rates (18p/kWh) for later use; looking to by-pass the Grid ‘lock out’, get more (low cost) renewables into the system, and pass the benefits on to consumers. [67]
Bristol, after forming its own local energy company[68], is funding a series of community solar programmes to boost the City’s generation of clean, socially-owned, energy.[69]
Exeter, Stoke, Hull, Salford and Southampton all have ambitious ‘whole city’ plans of their own, and Swindon have used a ‘Green ISA’ to finance a solar farm, able to supply 100% of their domestic electricity needs by 2020.[70]
Bethesda, in Wales, is trying to do the same on a smaller scale; supplying themselves with electricity (at 7p/kWh) from a community hydro scheme (Ynni Ogwen)[71] and looking at 
a ‘virtual’ net metering system that allows preferential charging for the whole local community.
By clubbing together, 100 households in the Gwynedd village are able to purchase the power generated by a local hydro scheme for half the retail price of electricity.[72]
Glasgow plans to become the centre of an energy revolution that could radically alter how cities power homes and businesses. It’s ambitious proposals involve establishing a community-owned company to convert derelict land or buildings into renewables hubs; weaning the city off its reliance on the national grid.[73]
If there was a UK prize for joined-up policy making Scotland would currently run away with it. Scotland already boasts a 39.5% reduction in greenhouse gas emissions, making it the second best performer across the whole of Europe[74]. It also has one of the most ambitious clean-energy programmes.
‘Our Power’, Scotland – a new energy supply company established by Scottish social housing providers – aims to reduce heat and fuel costs to 200,000 homes across Scotland; passing on the energy sector savings directly to local communities; not paying dividends to shareholders but reinvesting profits to the benefit of customers. And Our Power will buy a minimum of 30% of its energy from renewable sources.
“Our Power entered the market at the end of 2015 as an Ofgem licenced supplier of gas and electricity. It plans to be selling heat and power to tenants in 200,000 homes across Scotland by 2020. It expects to save its members up to ten per cent on their household utility bills compared to standard commercial tariffs. Over the next five years, this could see up to £11 million of savings for households in some of the most disadvantaged communities across the country. In the future, Our Power hopes to develop renewable energy projects as part of its business for the benefit of local communities. Our Power is backed by £2.5m from the Scottish government and another £1m from Social Investment Scotland.”[75]
Scotland’s plans run much further. The Scottish Climate Change Delivery Plan sets out four major transformational outcomes:
• A largely decarbonised electricity generation sector by 2030.
• A largely decarbonised heat sector by 2050 (with significant progress by 2030).
• Almost complete decarbonisation of road transport by 2050 (also with significant progress by 2030).
• A comprehensive approach to ensure that carbon (including the cost of carbon) is
fully factored into strategic and local decisions about rural land use.[76]
Under the Climate Change (Scotland) Act 2009 public sector bodies, including local authorities require Carbon Management Plans for tackling climate change; reducing carbon emissions from local authority operations and estate. Moreover, many of these plans were being translated into local action through the Covenant of Mayors.
Signatories to the Covenant in Scotland currently include Aberdeen, Aberdeenshire, Dumfries and Galloway, Edinburgh, Glasgow, and North Ayrshire.
In Wales, the policy is heading in the same direction. The Environment and Sustainability Committee of the Welsh Assembly urged the new Welsh Government to form a public, not-for-profit energy company – along Robin Hood lines – to serve the whole of Wales.[77]
Ahead of the 2015 Paris Climate Summit, over 50 Labour local authorities pledged to run on 100% renewable energy by 2050.[78] To this should be added similar interests from a string of Conservative controlled councils, including Peterborough, Woking, Bournemouth, Swindon, Suffolk, St Albans and Northamptonshire; the point being that the biggest existential challenge of out lifetime is being addressed beyond party political boundaries … and beyond the gates of Parliament.
This is the dawning of ‘the Age of Clean’, and with it will come the democratisation of energy itself. Britain may have led the way in the last 2 energy revolutions, but it must play catch-up in the current one. As the Guardian pointed out –
“…in some countries, like Germany, there is a long tradition of local companies taking care of electricity and gas networks, telecoms, waste and water. We are witnessing a revival of locally integrated network companies partly motivated by smart city initiatives supported by local governments.”[79]
In ‘post-Trump’ USA, a host of towns, cities and States are heading down the same path. Twenty five cities have already committed to becoming ‘100% renewable-energy cities’.[80] Major cities, including New York and San Francisco have set ambitious plans (and budgets) to radically accelerate their own shift into renewable energy. Whole States are doing the same.
The leader of the pack is undoubtably San Diego; the one major city (so far) with a legally binding commitment to 100% renewable energy by 2035 – not just renewable electricity, but their entire power and transport systems too.[81] Not far behind comes the Canadian city of Vancouver, with the same pledge of 100% renewable energy by 2050.[82]
There is now an international (unstoppable) dimension to this movement, from which Britain’s major political parties have remained sadly detached. What the UK needs is to give the same delegated powers to towns, cities and communities across the land.
But real ‘climate’ leadership requires something more.
4.1 Après Paris: the carbon connection.
The Paris Summit put the world on notice. Whatever Donald Trump thinks, climate duties will have to underpin all mainstream economic policies …including any right of local energy supply. If it were to grasp this, Britain could become a genuine leader in the energy transformation process.
Localities, looking for the right to deliver their own energy security, will need to work within a framework of climate security, and climate security will become inseparable from rapid reduction of our carbon footprint. It is a process that will re-define economics itself.
For the UK the simplest approach would be via one of the recommendations of the government’s Climate Change Committee. At the end of 2013, the CCC noted that –
“… decarbonising the power sector to an average grid intensity of around 50 gCO2/kWh remained an appropriate objective for 2030.”[83]
This must be turned into a statutory duty.
Elsewhere, the same message is beginning to sink in. Parts of the United States are already doing so. State/regional governments have been able to place climate/carbon consumption obligations on their distribution network operators. Network operators (DNOs) then discover there are more productive (energy saving) collaborations to be found with cities and housing providers than in supply contracts with power stations.
This will be the shape of any sustainable ‘post-Paris’ world; one that will place carbon-reduction duties on distribution grids, set demand reduction targets on localities and put an increasing reliance on clean energy.
In Germany, national targets are deemed to be local duties. Sustainability, accountability and security become the pillars of a quite different ‘competitive’ energy market. 
What keeps the German momentum on track has been a public, self-critical appraisal of how much more they might do[84]… and a willingness to use every step as the basis of raising targets even further.
Moreover, Germany turned this into benefit rather than a cost.
‘Transformation’ brings with it a host of practical challenges – grid balancing, the management of peaks and troughs in demand, the means of 
local infrastructure investment, the mechanisms for taking clean energy before dirty, and how to prioritise the consumption of ‘less’. But two central trends are emerging –
new ‘smart’ technologies are making answers to Grid balancing problems much simpler to find, and
the switch into energy markets that consume ‘less’ is opening up new ways of simultaneously tackling climate change, fuel poverty and economic wellbeing.
4.2 Joining up the dots
If Britain is looking for fresh visions of joined up policy making, beyond European shores, there are plenty it can draw on.
California scheming. Just before midnight on 12 September 2015 the California State legislature rushed through
“…a package of 12 bills addressing environmental and health concerns, such as off-shore drilling, divestment of investment funding from coal companies, water quality, energy efficiency in disadvantaged communities, and increased public transportation.”[85] …
“The most far-reaching climate change goals of the climate bill package were enshrined in SB 350. The proposed Bill … called for a 50% reduction in petroleum use in cars and trucks, a 50% increase in energy efficiency in buildings, and for 50% of the state’s utility power to be derived from renewable energy, all by 2030; termed the “50-50-50” formula.”[86]
Intense lobbying from the fossil fuel industry subsequently forced the targets for reduced petrol use in cars to be dropped – though the Governor insists these will be met through other means – but the energy saving and clean energy commitments remain. Moreover, the California Energy Commission (CEC) has been given new duties to drive these changes through.
Not to be outdone, in January 2016, New York State Governor, Andrew Cuomo, launched a $5bn Clean Energy Fund to drive the City’s clean energy economy. Central to this was the commitment
“… to accelerate the growth of New York’s clean energy economy, address climate change, strengthen resiliency in the face of extreme weather and lower energy bills for New Yorkers … starting this year.”[87]
Other U.S. States have been taking a different approach; placing grid-performance/carbon reduction duties on electricity network operators. The result is to open up new strategic partnerships with localities – investing in energy efficiency upgrading of existing buildings as the most direct way of delivering demand reduction and carbon saving.
In Canada, the State of Ontario launched a $7bn, 4 year, radical Climate Action Plan, in which
Ontario will begin phasing out natural gas for heating, provide incentives to retrofit buildings and give rebates to drivers who buy electric vehicles. It will also require that gasoline sold in the province contain less carbon, bring in building code rules requiring all new homes by 2030 to be heated with electricity or geothermal systems, and set a target for 12 per cent of all new vehicle sales to be electric by 2025.[88]
In each case, the key has been the adoption of challenging carbon reduction duties, which themselves lead to integrated energy efficiency programmes across different sectors. This turns joined-up thinking into joined-up doing. But it begins from a binding duty to do so… and energy saving is the key.