Smaller-scale generation can meet UK’s power need, says Andy Kerr
AMID the political and media frenzy about renewables in recent years, we are in danger of missing a more profound change in our energy system.
Whisper it quietly, but the old certainties of energy provision – through regulated markets dominated by the Big Six energy companies – are collapsing. This is not, as some would assert, because of an interfering government, but because the utility business model is being challenged by fast-changing developments in technology and social and business expectations. These include rapid changes in the costs of energy technologies; the understanding that large, distant energy companies rarely provide the best solution to localised problems of energy wastage; and the critical need to address long-running UK problems of fuel poverty and delivery of secure and more sustainable forms of energy.
In the recent past, the UK has evolved a model of centralised power generation within an electricity grid that was first connected in 1938. The coal-fired stations are now over 40 years old and desperately inefficient, while the last nuclear power station was built in the 1980s. Since the liberalisation of electricity markets 25 years ago, gas-fired power stations have been the norm, along with the more recent increase in renewable sources.
Conversely, to heat homes and businesses, we have evolved a model of individualised, micro-generation, with the Big Six supplying the fuel to a boiler located in the house or business.
These models of delivering energy have evolved from an odd mix of legacy regional development, for example locating power stations close to coal mines, as well as incumbent institutional arrangements and cultural preferences. There is nothing immutable about these models. Their success depends on continuing to meet the energy needs of society, and their failures are becoming increasingly apparent.
At the root of today’s challenge is the profound lack of trust in energy companies. Surveys in recent years have highlighted that energy companies are trusted less even than politicians or bankers. People have long stopped believing the energy system works to support their needs.
What is the alternative? Around the world other, local models for delivering energy exist. This has being enabled by both rapid changes in energy and building technologies, and by the increasing awareness of the social and environmental benefits of local ownership of affordable energy systems. The evidence from a recent University of Edinburgh review of all 434 local authorities across the UK suggests that almost one third are actively planning, and investing in, energy productivity and provision. The leading local authority proponents of local energy systems cite the economic, financial and social benefits. For householders, this means more affordable warmth and potential to reduce debt. For the council, it means improved revenues and durability of housing stock; and reduced council energy bills.
It is clear that no one specific energy model works everywhere. In Aberdeen, the focus was on social objectives of affordable warmth. The not-for-profit company, Aberdeen Heat and Power, was set up in 2002 to address major fuel poverty issues. It now generates energy for nearly 2000 households and 13 public buildings. Heating costs for tenants have been reduced by 50 per cent. It has now set up a “for-profit” subsidiary in order to connect private householders to these local energy networks.
In Edinburgh, the city Council is considering the business case for a wholly owned energy company, through which major changes in the local energy system can be enacted.
This includes retrofitting of large public buildings in the city to reduce energy costs and potentially joint ventures with local developers to develop local energy systems.
Housing associations have also taken an increasingly active role in energy generation and use. Similarly, civic institutions such as universities are also investing in energy generation and demand management. The University of Edinburgh has now invested more than £20 million in four separate energy generation networks across its campuses,.
These rapid changes in energy provision, towards more localised and responsive systems that can harness social and environmental benefits, appear to take us closer to that elusive UK goal of delivering a resilient, sustainable energy systems, at an acceptable cost. As one of the leading UK regions for local energy systems, Scotland has much to build on and much to offer. Let us take that opportunity.
• Andy Kerr is the executive director of the Edinburgh Centre for Carbon Innovation, www.edinburghcentre.org