Brave New World Revisited

rethinking Britain’s energy system

There was a lovely news interview with Ed Miliband MP in which Britain’s new Secretary of State was asked about Labour’s policy over on-shore wind farms. Ed smiled and said “We’re going to have them”. How many? “Lots”… What a refreshing difference from the previous 14 years.

If there is one person who could rescue the election from the one in which Labour swept into power on a tide of apathy and exasperation and turn it into a sense of genuine inspiration, it is probably Miliband. He constantly spells out the links between clean energy and climate security. Moreover, he grasps how little time we have.

Miliband’s comments could hardly have been more timely. On the day before his interview, the world recorded its hottest ever day in the last 100,000 years: not such a cause for celebration. The next day was even hotter.

The trouble is that Miliband himself is caught within a government confusion about whether the intention is to be transformative or merely decorative.

Whose energy?

Let’s begin with the energy plan. Onshore wind turbines are a great idea, but only if part of a bigger shift in energy thinking. Much of the phraseology currently in Labour’s GB Energy plan suggests it might not be. Ministers talk of ‘community benefit’ but not ‘community ownership’. There’s a world of difference.

To be fair, Labour may have half-grasped this in relation to offshore wind if it plans to copy the Danish model in which the State owns the high voltage cabling to the off-shore hubs that individual turbines connect to. This de-risks the cost to developers and forces down the Contract for Difference (CfD) energy price bids that follow.

Bigger problems emerge once you get the electricity on land. National Grid claims that to do so in line with 2030 decarbonisation targets, requires a pylon building bonanza. Miliband needs reminding that this is how National Grid makes its money. The high voltage grid is its money-tree and it’s not Ed’s job to keep watering it. Other options exist that could avoid much of this controversy. To do so the conversation must shift from pylon routes to systems change.

That debate really begins at the point at which politics, economics and physics meet. So begin with the physics.

Kids at school know that electricity naturally flows to the nearest point of use. Unlike humans, it doesn’t do sightseeing tours or go out clubbing for the night before making a cross-country dash home in the morning. Electricity is entirely local in its inclinations. And so should it’s use be. I say this because it’s what the debate about a pylons invasion ignores.

Beyond the energy motorways

High-voltage electricity ‘motorways’ may not be the best way of thinking about tomorrow’s sustainable grid systems. These are more likely to be devolved, interactive and (if we have any sense) publicly owned. Re-thinking industrial strategies, to locate high-energy users close to the shoreline connections for offshore wind, would also free up capacity in the rest of the existing network.

Miliband inherits a largely privatised energy system, obsessed with centralised generation and the high voltage grid. Other countries have far more devolved (and efficient) systems. The best model for doing so is probably Denmark, where networks are publicly owned and energy defined as a ‘not-for-profit’ service rather than a market. More mixed systems exist in Germany and France. All begin from the notion of localised resilience.

This is where Miliband’s embrace of on-shore wind comes in. Those parts of Europe with decentralised grids are also starting to make energy sharing and storing the norm. With 50% of current UK energy being lost at the power station (70% for nuclear), decentralised systems make huge sense both in terms of efficiency and carbon reduction. What also makes them popular in Germany and Denmark is that local energy can be sold to local communities at local prices. Domestic electricity bills can fall in half.

No less important is that, in Denmark at least, planning permission for local wind turbines can take less than 6 months. This happens where turbines are owned as a community co-op. In effect, by linking community ownership with clean generation and decarbonisation, local accountability rather than corporate power is put at the heart of the energy system.

The elephant in the grid

No one should doubt Ed Miliband’s determination to meet Britain’s Zero Carbon commitments. But nor should we underestimate the challenges of doing so. In broad terms, Carbon Brief set out the ‘trajectory’ of choices he faces. All are daunting.

What each scenario overlooks is that, even if we wanted to, Britain doesn’t have the capacity to rebuild ‘yesterday’s’ grid system in time to meet tomorrow’s targets. We have neither the skill-base nor the industrial infrastructure to do so. This too is a rebuilding and re-skilling process.

Fortunately, the greater opportunity is to build tomorrow’s energy network around more localised, interactive grids. For this, Miliband will have to change the culture of the energy sector as much as its structure.

Historically, Britain’s obsession with the high voltage grid gave the Big 6 energy companies colossal power over access to the system. They effectively wrote Ofgem’s rules and gave themselves priority access to grid connections. It put local authorities, local communities and independent generators at the back of a very long queue for grid connections. No amount of government commitments to new estates or new towns gets past this queue.

Beyond National Grid a regional network of 6 Distribution Network Operators (DNOs) then sits on cosy regional monopolies controlling the wiring systems servicing towns and cities. These have now joined National Grid in running elaborate ‘community consultations’ that deliver zero change rather than zero carbon. Repeated requests for local energy pilot grids have gone unanswered. Only Bethesda’s Energy Local ‘community-hydro’ Co-op has broken the mould.

The challenge facing Labour is how to replace systems inertia with dynamic decentralisation. The key probably lies in statutory carbon reduction duties.

Planning a cake, baking a cake

All the community consultations under the sun won’t hit the UK’s 2030 ‘Zero Carbon’ targets. Looser planning rules won’t do so either. A study by Civitas looked at the gap between planning approvals and house building starts and came to awkward conclusions.

There’s always a time-lag between approvals and starts. More perplexing is that the gap has widened. A large proportion of the 2 million houses granted planning permission over the last decade have faced sizeable delays in even starting. The Times put the delayed-start figure at one third of all approvals over the last 5 years.

Some part of this is down to speculators building up land-banks that they hope to make shed loads of money on at some point. Another part is down to developers themselves, often reluctant to complete until property prices guarantee the financial return they are looking for. Either way, the public interest comes last.

Meeting both new housing and zero carbon targets requires a different approach; one that delivers devolved powers and duties along with sustainable housing standards.

Home Zones?

In 2000 NEA, the national fuel poverty charity, set up a pilot programme called ‘Warm Zones’. This recognised that individualised energy efficiency programmes were remarkably inefficient. All ran through separate energy companies, often doing piecemeal work on similar streets, but with no overall plan. Warm Zones brought local authorities, local communities and energy installer companies into single frameworks, each delivering ‘integrated’ energy upgrades. Sometimes these were headed up by local authorities, sometimes an energy installer took the lead. What mattered was that there was an area plan rather than a randomised set of upgrades.

Today, it would be a good idea for Ed Miliband and Angela Raynor to gang up and do the same for climate compatible housing programmes. ‘Home Zones’ would need fast-track powers of land acquisition and grid connection entitlements. These would apply even if the land sale income reverts to the initial owner at the point of sale. It simply ends the right of speculators to hold the public to ransom.

In reality, such statutory powers should probably be given to regional Mayors and the best organised local authorities. Competence and clarity is the key. But the real challenge would come in the incorporation of carbon reduction obligations.

If National Grid (and energy companies) had a statutory duty to deliver a 10% annual carbon reduction in their operations it would transform their approach to market economics. Such a duty would need to be a prerequisite before any dividend payments were allowed. Network operators, with no energy generating responsibilities, would need to devise a wider operational remit. This would see them co-investing with local authorities in energy saving programmes, (clean) energy generation, storage and local grids. It would give Miliband the impetus he needs to turn his ethical commitments into practical realities…If only we had a Labour government.

Transformation moment

But we do! And a world of genuinely transformative possibilities exists if Labour seizes this moment to make the changes. This would also transform climate politics.

Climate optimists used to say that all we had to do was dream big and speak out. Climate realists said it wasn’t enough and that we’d need to stand up and be counted. Climate pessimists replied that, under a corporately corrupted government, only direct confrontation with fossil fuel interests would change anything. But now there is another possibility…that a Climate Minister could open the gates to a new form of climate governance.

In 2008, when Ed Miliband was first appointed as the Climate Secretary in DECC, he looked round for advisors to help steer him into this space. Entrenched Downing Street interests blocked such transformations, turning Ed’s mentors into his tormentors. Today’s climate emergency presents him with different challenges. The moment may have shifted in favour of the climate optimists.

If a different form of climate leadership is still possible we shouldn’t miss out on being the ones to call for it.

Alan Simpson

August 2024