Gas Ofgem Spring Statement Solar Steps

New Power REPORT APRIL 2019 ‘We are going to be doing a crowdfunding in the next few weeks and that’s really exciting. We want people in the industry to be able to own it’ Sarah Merrick, Ripple Energy OFGEM SOLAR Independent STEPS regulation faces More power to some existential local authorities questions SPRING STATEMENT Heat decarbonisation on the agenda ‘Ofgem should have more ‘sandboxes’ and they GAS PRIVATE should not be stuck at the Less or more? demonstration level’ Polly Billington, director, UK100 ‘We believe Ofgem could up its V game, and send a clearer signal PUBLIC on low-carbon to the companies Ownership it regulates’ Judith Ward, Sustainability First questions Expert information for all those invested in the UK’s energy future INTERVIEW The New Power Interview POLLY BILLINGTON, UK100 Members of the UK100 network of local authorities have pledged to convert to using 100% green energy by 2050. Janet Wood spoke to the network’s director, Polly Billington, about taking a local approach to energy K100 came out of the Paris agree- likely to win on your deep retroft if you are talking ment in 2014, explains director Polly about saving people money and creating warm and Billington. A large number of compa- healthy homes, than you are if you talk about saving nies made a commitment to 100% the planet.” clean energy at the time but she says: The network has connected leaders and built con- “I have been around enough cam- sensus, and at the same time “created a bit of city Upaigning to understand that if you are not careful a rivalry that has enabled us to escalate upwards”, political commitment like that can get put in a bottom she says. “Local leaders rarely leave the place that drawer and nothing happens.” She sourced funding they represent because they are very committed for a network of UK local authorities, who would repli- to it, so we have realised you have to meet them cate the Paris Agreement’s C40 network of ‘megaci- ties’ committed to addressing climate change. BIOGRAPHY From the original 66 UK100 members, the network has grown to 94 (Bath and East Somerset Polly Billington took a postgraduate diploma in Broadcast signed up in March) which is about a ffth of UK Journalism at the department of Journalism, Media and local authorities. “The more connections you make Communication, University of Central Lancashire. between people who are elected to make these She was a BBC reporter including for the Today decisions, the more you can increase not only their programme and the Politics Show. ambition but also their ability to deliver,” says Billing- She became a special adviser to Ed Miliband in 2007 ton. Local leaders are better placed to do some of and was the Labour Party’s parliamentary candidate these diffcult things because “they are committed for Thurrock at the 2015 general election and a Labour to their communities, they have good relationships Party offcial. She was head of communications and with local business and they are very connected”. campaigns at Citizens Advice between 2013 and 2015. Climate change is a huge motivator for some peo- Since December 2016, Billington has been director of ple, she explains, but for others it comes alongside UK100. This network of local government leaders “seeks other practicalities, like deep retroftting social hous- to devise and implement plans for the transition to clean ing, or understanding and engaging with the energy energy that are ambitious, cost effective and take the sector. “Those things are the bread and butter of public and business with them”. It supports decision- local authorities and although these are not particu- makers in UK towns and cities in their transition to larly sexy, they are also things that deliver co-bene- 100% clean energy by 2050. fts that local leaders can talk about. You are more 28 NEW POWER / ISSUE 122 / APRIL 2019 INTERVIEW where they are already. We convene at party con- and other funding that has supported solar panels ferences and local meetings and that’s where you and storage on social housing. So they are trying a see this competition and learning from each other… whole lot of ways of transforming a city,” she says. it’s almost always the need to say ‘we are doing Given recent failures, I ask about the view of the something better than someone else’, and that’s supply company as less problematic and Billington the nature of politics.” explains: “It’s not so much that the regulations are easier, as the attractiveness of being able to badge ENABLE OR REGULATE? it as your local energy supply. Being able to be seen How can local authorities best engage with the to provide a good deal for your local residents often energy industry? Billington says UK100 sees a high looks like a good way into the energy market.” level of ambition among its members but “there is a But on energy generation: “They have very high long way to go for local leaders in understanding the ambition – but the regulatory systems don’t work in rapidly changing energy landscape and how they many peoples’ favour.” can formally engage with it”. Regulatory structures Nevertheless, Billington sees a need to invest and at the moment don’t favour the rapid decarbonisa- that extends to dense cities that cannot follow the tion of energy and heat most popular local authority option of solar farms: and transport required, “It’s being driven by austerity, let’s be honest, they Engaging with she says. need to fnd other ways of generating income.” But The important thing they are developing an ‘enabler’ role – Leeds has Ofgem and the about local leaders is that invested £17 million into a district heating scheme DNOs is so “they have levers across providing systems ahead of need. “That’s hard, challenging for all their vectors” in deliv- Ofgem doesn’t like you doing it, but they said: ‘If we ering local services, she are going to have system commercially the market local authorities says, so, even if they don’t will never provide, so we have to do it if we want to have control over transport, decarbonise our city.’” they still have control over plan- Do cities have the understanding – and the free- ning – where and how you put car charging points in. dom – to make such investments commonplace? On heat they have levers in the social housing and the Billington admires government’s approach to heat. private rented sector, and “you have planning regula- “There is a lot of work to be done on the fnancial tory powers to say you can’t build houses unless they side and that’s why they [BEIS] have the Heat Net- meet high energy standards”. work Development Unit. District heating won’t hap- Local authorities have become energy suppliers pen without a certain amount of upfront develop- and many “are still attracted to following the lead ment capital provided by government,” she says. of Bristol Energy and Robin Hood Energy in saying More broadly: “You need to make sure that the we can shift towards a cleaner energy offer through regulatory environment is one where the fnances creating an energy company ... it means they can stack up. That’s why Ofgem and the shift from DNOs provide for the residents to DSOs are so important. They have to understand in a better way than the the local authorities as partners, not just customers, You need to big players in the mar- and that the fexibility market can be quite important.” make sure that ket,” Billington says. Generally, electricity generation locally is diffcult The attraction of the and that puts local authorities off, she says. First, the regulatory supplier space is, she “they are not instinctively entrepreneurial”, and environment is says, “partly because second, they are in a Catch 22: authorities borrow one where the engaging with Ofgem money at a low interest rate from the Public Works and the DNOs is so chal- Loan Board (PWLB), but that body will not lend to fnances stack up lenging for local authori- “interesting” projects supported by the sustainabil- ties. There are signifcant ity team – those with higher risk. “The fnance team barriers to [authorities] doing pushes the project back towards PWLB to save what is really necessary.” borrowing costs ‘and you get a ‘business as usual’ Her ideal approach would be comprehensive: development,” says Billington. generating power, facilitating storage, creating the To break out of that cycle, UK100 members “have environment for smart EV infrastructure, having to fnd other forms of development capital and reas- high levels of energy effcient homes and generat- sure their fnance team that this is worth taking a ing electricity to be able to cross-subsidise retro- slight hit on the cost, or fnding cheaper capital”, she fts. Supply can lead that and “some of the most says interesting things that Nottingham is doing might be related to Robin Hood Energy but include com- WHAT CAN BE DONE? munity energy, retrofts on the Energisprong model I ask if it is about building a pipeline of projects and 29 NEW POWER / ISSUE 122 / APRIL 2019 INTERVIEW Billington says that is where UK100 can help. elsewhere, too. Land Securities, for example, joined In a recent meeting, UK100 brought investors, with Oxford City Council and came up with a set of developers and local authorities together so they sustainability criteria for a shopping centre. “They could start to replicate projects and exchange have created a template that can be applied to their notes on what works.

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