What Will They Find Under the Tree This Year?
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Volume 34 Number 3 Investor Confidence – Dr Steven Fawkes & Matt Golden December 2017 House of Lords Annual Dinner BEIS Clean Growth Strategy & Helm Cost of Energy Review Energy Policy Priorities for 2018 onwards ENERGY FOCUS What will they find under the tree this year? This is not an official publication of the House of Commons or the House of Lords. It has not been approved by either House or its committees. All-Party Parliamentary Groups are informal groups of Members of both Houses with a common interest in particular issues. The views expressed in Energy Focus are those of the individual organisations and contributors and do not necessarily represent the views held by the All-Party Parliamentary Group for Energy Studies. The journal of The All-Party Parliamentary Group for Energy Studies Established in 1980, the Parliamentary Group for Energy Studies remains the only All-Party Parliamentary Group representing the entire energy industry. We champion cross-sector energy research and development. The Group’s membership is comprised of over 100 parliamentarians, 100 associate bodies from the private, public and CHAIRMAN’S charity sectors and a range of individual members. Published three times a year, Energy Focus records the Group’s activities, tracks key energy and environmental developments through parliament, presents articles from leading industry contributors and provides insight into the views and interests of both parliamentarians and officials. FOREWORD Executive Council Chairman Ian Liddell-Grainger MP Officers James Heappey MP | Rt Hon Lord Hunt of Kings Heath OBE | Ian Lavery MP Lord O’Neill of Clackmannan | Lord Oxburgh | Neil Parish MP | Lord Redesdale | Lord Skelmersdale European Officer Ian Duncan MEP Membership Lead Robert Lane CBE Executive Council Christopher Chope OBE MP | Julie Elliott MP | Martin Fry | Ian Graves Dr Simon Harrison | Louise Kingham OBE | Joan MacNaughton CB | Paul Needley | Albert Owen MP | Michael Roberts OBE Ruth Thompson OBE | Stephen Vaughan | Barbara Vest | Simon Virley | Graham Ward CBE | John Wybrew OBE Disclaimer: The views expressed in Energy Focus are those of individual organisations and contributors and do not necessarily represent the views held by members of the All-Party Parliamentary Group for Energy Studies. I am always slightly relieved when the Autumn session draws to a close, as the smooth running Contents of Parliament is interrupted by party conferences and a break in November. However, for the All-Party Parliamentary Group for Energy Studies, it is always a busy session and we try to avoid Foreword 3 losing dates to the short recesses. Ian Liddell–Grainger MP, Chairman of PGES The tectonic plates of politics are still moving against each other, as the German Chancellor Making The Demand Side More Investable 4 struggles to form a government after their last election and, as I write, both Jean-Claud Juncker Steven Fawkes - Managing Partner, EnergyPro Ltd and Donald Tusk have made announcements that the Brexit process is proceeding immediately to the second stage, that of trade agreements. Meanwhile, President Trump announced that the US Efficiency – A Distributed Energy Resource 6 recognises Jerusalem as the capital of Israel and would move its Embassy there, but immediately Matt Golden, CEO Open Energy Efficiency signed a waiver to defer that for 6 months. House of Lords Annual Dinner 8 In Energy Focus, you will find the reports from our activities, which included presentations Energy Policy Workshop 10 from the Investor Confidence project and BEIS, a House of Lords Dinner and an Energy Policy December Speaker Meeting Workshop. Externally, there was a Clean Growth Strategy White Paper, an Independent Review on the Cost of Energy by Professor Dieter Helm and a Budget Statement, although we were spared Cost of Energy Review 12 too much impact from it, as there was no reference to energy. Professor Dieter Helm CBE You may have noticed that the focus for this Parliament has been preparations and negotiations for Clean Growth Strategy White Paper 14 the cessation of the UK membership of the European Union. PGES has its established preferred Key Policies And Proposals Energy Policy Priorities which were presented to the Minister of State for Business, Energy and Industrial Strategy, in the last Parliament. Our recent workshop has refined these in front of a Parliamentary Record 17 Select Committees, oral questions, debates and legislation panel of MPs and Peers from all of the major parties. For the next session of Parliament, we should have a clear run, with meetings in January, February and March. Details of these are already posted on our website, which is worth checking regularly www.pges.org.uk. I look forward to being able to welcome you to these meetings. The New Year will undoubtedly bring us more surprises, I am sure, but to conclude, as ever, whatever the future may hold for UK energy, I am still confident that the Parliamentary Group for Energy Studies, along with its members, will be leading policy discussion. ISSN 0265-1734 For non-members, annual subscription rate is £65.00, single copies £27.00 Ian Liddell-Grainger MP Members receive a complimentary copy as part of membership to the Group Chairman, PGES Copyright 2016 An All-Party Parliamentary Group Parliamentary Group for Energy Studies. All rights reserved. None of the articles or addresses in this publication may be reproduced, stored in a retrieval system or transmitted in any form, by any means., electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the 2 Copyright owner. 3 Printed in Great Britain by First Colour Ltd, London. can be originated from anywhere, In Europe ICP has built a network financial institutions in scaling MAKING THE DEMAND clients, consultants, ESCOs or of more than 200 Allies. Amongst up the deployment of capital into others. To qualify for IREETM that we have built an Investor energy efficiency by: certification a project developer Network with more than 30 - helping financial institutions to has to be credentialed by ICP investors and banks globally SIDE MORE INVESTABLE better understand and evaluate meaning they have to have been with more than Ð4 billion looking value and risks trained in the ICP process and to invest into energy efficiency. demonstrated a suitable level of Some of them recognise ICP - providing a common framework Steven Fawkes - Managing Partner, EnergyPro Ltd experience. Furthermore the projects by offering lower due for evaluating energy efficiency Senior Advisor, Investor Confidence Project project has to have been checked diligence costs and even lower investments by an ICP Quality Assurance cost of capital. The network - helping developers and owners [email protected] Professional to ensure it has been of ICP Project Developers and develop projects in a way that developed to the ICP standards. Quality Assurance Professionals better addresses the needs of The IREETM certification happens is also growing across Europe. financial institutions SEPTEMBER SPEAKER MEETING during the underwriting period - fostering common language i.e. when the investment decision The UK has been leading the between project developers, is being made. adoption of ICP in Europe. The project owners and financial project was brought to Europe by institutions. ICP has developed IREETM for UK consultancy EnergyPro. The TM To achieve the cleaner, more project finance), building large- buildings, both apartment first ever IREE project in Europe If we are to massively scale up flexible, more distributed energy scale pipelines, standardization blocks and tertiary buildings, was an NHS project in Liverpool. investment into demand side system we want and we need, and building capacity in the and this is being rolled out in Other projects, programmes and technologies including energy we need to significantly ramp up supply side, the demand-side the US and across Europe. We investors across Europe are now efficiency, demand response the investment into the demand end-users and the financial are now developing the system adopting ICP. and storage we need to address side: energy efficiency, demand community. Here I am going finance for a wind farm. In the for industrial energy efficiency many problems but chief amongst response and of course storage. to focus on standardization and wind sector standardization was projects, street light projects and Another major problem in those is making the demand The IEA estimate that globally to capacity building by looking at driven by the rise of subsidies district energy projects in Europe the demand side is a lack of side as investable as the supply achieve a “66%, 2oC” scenario three important projects, the and the consequent prospect of and aim to have these sectors understanding of the risks. The side. One essential aspect investment into energy efficiency Investor Confidence Project and large-scale investment. On the ready to be rolled out early in 2018. results of demand side projects of doing that is the need for the average annual investment the Energy Efficiency Financial demand side we have had to build are rarely analysed and there TM standardisation – this is where into energy efficiency between Institutions Group’s (EEFIG) a large coalition of the much IREE brings advantages to is a paucity of data on project the Investor Confidence Project now and 2050 will have to be DEEP platform and Underwriting more diverse efficiency industry, all parties involved in energy performance. The EEFIG’s is so important. Now the system c.$1 trillion a year, about 5 x the Toolkit. banks and investors, government efficiency projects. For building Derisking Energy Efficiency exists it can be used anywhere current level of investment. and local programmes to and facility owners it can bring Platform (DEEP) seeks to address in the US and Europe and is The lack of standardization in support the development of the greater confidence in the project this by providing an open-source being developed in other regions.