35: How to kick-start community energy?
Community-led energy projects offer a way forward as energy bills spiral and carbon emissions need to be cut. However, community energy in the UK is struggling. How can governments unleash its potential?
Matt and Becky are joined by experts Kayla Ente, Founder of Brighton & Hove Energy Services Co-operative and Nigel Cornwall, Director at Hydrogen East, Net Zero East and New Anglia Energy. Find us at www.localzeropod.com
Episode Transcript:
[Music flourish]
Nigel: Over this period going back to 2008, the supporting infrastructure and supply chains that are needed at the regional level have simply not developed and that is a fundamental problem given the government’s aspirations around net zero.
Kayla: Whereas, in 2014, for example, we might have had ten insulation installers here in the area of Brighton and Hove, now we have none; absolutely none. There is nobody to do the work.
[Music flourish]
Matt: Hello and welcome to Local Zero. You’re listening to Matt and Becky and today, we’re going to be talking about how government can best support community energy.
Rebecca: Yeah, as our governments reach for solutions to tackle spiralling energy bills, stubborn carbon emissions and regional inequalities, community-led energy projects might just offer a way forward but today, unlike in other countries, community energy in the UK is struggling.
Matt: We’re joined by two of the UK’s foremost experts on community energy. The first is Kayla Ente who is Chief Executive and Founder at Brighton & Hove Energy Services Co-operative. She is joined by Nigel Cornwall, Director at Hydrogen East, Net Zero East and New Anglia Energy.
Rebecca: We’ll be talking to them about the prospects of community energy in the context of the energy crisis, net zero and a just transition. We’ll also ask them what’s holding it back and how government could be doing more to help unleash the full potential.
Matt: And as ever, if you haven’t already, go find and follow us @LocalZeroPod on Twitter to get involved with discussions over there. Also, you can email us at LocalZeroPod@gmail.com if you want to share some longer thoughts.
[Music flourish]
Rebecca: So before we get into our discussion today, let’s look back over the past couple of weeks. Matt, how has it been going for you?
Matt: Well, another busy couple of weeks. 2022 is unremitting in its excitement and its levels of stress but it certainly hasn’t been a slow one. I’ve been trying to break the stress, as it were, by doing a load of rewilding in the back garden. I’ve gone full Chris Packham, basically, Becky.
Rebecca: Amazing. I can just imagine you out there in your garden and getting all the tools out, digging it up and all the rest of it. So what new has happened in your garden, Matt?
Matt: Well, very exciting. I had my birthday and so this is a full-blooded mid-life crisis. I received some bird boxes but the crowning glory was a bat box.
Rebecca: A bat box?
Matt: That’s how exciting my life has got, yeah [laughter]. It’s really quite tragic but they’re up and believe it or not, I’m looking out at them and I’m seeing all the birds checking them out. It’s nice and there’ll be a pond. I’m a happy man having done all that. What about you? What have you been up to?
Rebecca: I haven’t been up to anything nearly as exciting as all of that. I’ve had sick children, a sick dog and I sprained my ankle again. Just the fundamentals of life. I wish I’d gotten out in the garden and done a lot more [laughter]. It’s funny you mentioned it actually because I’ve really been missing a lot of that and particularly with my ankle again and not been able to walk much, I’ve been missing being out in nature. I used to go on quite long walks around the local fields and I’d always hear the birds singing and chirping away and it always brightened up my morning. I can just imagine you sitting there, enjoying those sounds and destressing immediately.
Matt: I feel you on the sick kids. I didn’t note that but I could have. The other thing I’ve noticed actually looking outside is the daffodils are almost up. We’re in Glasgow here and everything is slower. There was an article in the paper last week, I think it was, that stuff is coming out... plants, flowers and blossoms are opening up almost a full month earlier which is a real problem.
Rebecca: Yeah, we’ve seen the cherry blossom on some of the local trees and I was thinking, ‘I remember this happening in March.’ I’m sure it was the end of March and we’re only just into February and we’re already starting to see it. There’s a sign of climate change, hey?
Matt: I know. It’s a real problem in terms of pollination. You’ve got to have the insects out at the right time but this is climate change. This is 1.20C and this is why we do this pod because this isn’t okay. This is worrying.
[Music flourish]
But it’s okay because we’ve got some good news stories about climate action and about people doing the right things at the right time. So, Becky, you’ve got a good one.
Rebecca: I do and there’s a personal take on it because I’ve just signed up to participate. Octopus Energy have just started a trial where they are paying customers to delay their power usage or turn down the amount of energy they’re using in their homes during the dirtiest times; so the times when the electricity system is reliant on the dirtier energy like fossil-fuel based energy as opposed to renewables. I’m not entirely sure how it’s going to work. I’m very excited to see because I’ve never participated in a trial like this before. Fundamentally, there are going to be notifications that come up that tell you the time of the day when it’s predicted to be the dirtiest time of the day because obviously, thanks to the great data that we’re now getting and weather forecasts, we can get a bit of insight ahead of time as to when the wind is going to be lagging or when the sun is not going to be shining. To an extent, we can kind of predict a day ahead when those dirty times on the grid are going to be. If you participate in the trial, you need to have a smart meter and obviously, you need to be an Octopus Energy client.
Matt: And you’re lucky, because they’re not taking any more at the moment.
Rebecca: Yeah, I got in last year actually. When I got my electric vehicle, I got on to that. I think this is a really interesting story because in a lot of ways, it’s really good because it’s starting to open up new ways that people can engage with the energy system and benefit by also delivering benefits to the grid by trying to minimise the amount of dirty energy that’s being used.
Matt: Yeah, I agree.
Rebecca: However, if I do this and we’re successful, we’ll see some financial benefit but, of course, I’m only able to participate in this because I have a smart meter and I’m with Octopus. We’ve talked about it time and time again on this pod that oftentimes, the people that are just not able to take advantage of offers like this are the people that probably need to the most. I think it’s great but it also makes me worry about that inclusivity aspect of some of these new tariffs that we’re starting to see emerge.
Matt: Yeah, and it’s an interesting point and a point echoed by a chap called Adam Bell on Twitter who is basically saying it’s an age-old issue that it’s going to be the wealthier households that are able to insulate themselves, either literally, from energy prices or able to do things like you’re talking about... EV time-of-use tariffs or even installing microgen like solar on their roofs. They’ve got the capital to invest and to take power from different sources or different times. I hear you but good luck with it and let me know how it goes.
Rebecca: I will do. I feel like there’s going to be a real mighty education component here because I don’t have solar and I don’t have a battery. I have two young kids and so the washing machine seems to be in an endless cycle of being on. So it will be interesting to see what we can actually do.
Matt: It’s like the fifth member of our family [laughter]. Do let me know how it goes. It will collide with the reality and routine of family life.
[Music flourish]
My good news story is over... not the pond but a smaller pond, over the Irish Sea and looking at Ireland who have really taken some big steps towards retrofitting their homes or at least have started to lay some of the policy groundwork in reaction to the energy crisis. Grants of more than €25,000 for retrofit, whether that’s efficiency or heat pumps – you name it. If it’s going to reduce bills and improve efficiency, it’s there. Their own targets are retrofitting 500,000 homes up to a reasonable efficiency standard by 2030 and installing 400,000 heat pumps. That’s pretty much Glasgow and the environs. There’s lots of other stuff going on here. I think two of the key points to raise is that much of this is being funded by carbon taxes and there will be one-stop shops available there which will hold your hand right through the retrofit process all the way through to delivery. You’re not ringing up various people and doing it all yourself and coordinating it. That’s the really good news.
Rebecca: That piece of it really excites me; the one-stop shop piece of it. Even when you can find access to that finance, as difficult as that may be, there are so many barriers even knowing what you have to do, getting the finance and getting the right people in. To have all of that in one place is really exciting.
Matt: Associated with this and just reflecting... maybe moving into bad, interesting or weird... I don’t know where we are now quite but linked to this is a story that came out from ECIU (Energy & Climate Intelligence Unit) just today or as we’re recording today. They’re saying that in the UK, or England specifically, the poorest quality homes, the most fuel poor and those with the lowest energy efficiency ratings are in the most marginal constituencies. Looking back at that example of Ireland, you’d be expecting the current Conservative Government to be falling over themselves and, indeed, the Labour Opposition making the case for policies to reduce bills and increase efficiency in these marginal seats, mostly in the North of England and the Midlands of England.
Rebecca: Where it’s absolutely desperately needed.
Matt: It is and I think votes will count on this. It will be interesting to see how this is going to play out. Are we going to see efficiency climb up the agenda in terms of manifestos or if we’re going to see other initiatives led by Steve Baker and Co in terms of Net Zero Watch and aiming to reduce subsidies for these efforts in order to cut bills and attacking the virtues of net zero? It’s all to play for going forward for the election and whether efficiency is in or is out.
Rebecca: I think the energy crisis seems to pull us in so many different ways, doesn’t it, Matt? Looking at what you were just talking about, are we doing the short-term policy thinking? Can we reduce immediately or are we thinking more long term? Efficiency is a no-brainer. We’re never going to get to net zero without efficiency. We’re never going to reduce our bills and tackle some of the key issues, particularly around fuel poverty and warmth in homes without doing it. To me, it seems absolutely nuts to be pulling it off the table but it wouldn’t be the first time we’ve seen short-term thinking in policy, would it?
Matt: Are you self-segueing into your bad news story here, Becky? [Laughter]
Rebecca: Oh, I feel like I might be. It wasn’t intentional but, as I said, the energy crisis seems to tie it all together. I’m almost a little bit sick of the number of stories I see which ask if this is a result of our net-zero policies and levies to support that kind of net-zero agenda. There’s a really lovely piece of analysis that Sky News put out by Ed Conway from the Sky News Team. Matt, you would love this story because I think there are four or five graphs in it.
Matt: Love a graph.
Rebecca: But ultimately, what this is trying to get at is whether the energy crisis that we are currently going through is fundamentally down to our net zero and environmental policies. It is a far more complex story than we first might think about because we could just look at it from the kind of levies perspective and how much they add on to the bills but again, that’s not really getting at the full story. That’s also taking a very short-term perspective. What it comes down to are a couple of things. One is that there is an increasing demand globally for natural gas. China is increasing its use of natural gas but simply having more demand for it means that there is less of it to go around [laughter].
Matt: Supply and demand. Prices rising.
Rebecca: Exactly but that is not everything because another big aspect is looking at the extent to which countries around the world have been investing in primary energy production.
Matt: What do you mean by primary energy production?
Rebecca: That is a very good question [laughter]. So I guess what we’re ultimately getting at here is the amount of energy that is being spent on these infrastructure projects to produce energy. I guess in the old days, that would have been things like coal-powered plants but now we’re talking a lot more about renewables. Actually, if we’re really serious about replacing our fossil fuels with renewables, that requires a lot of renewable projects to be developed and a lot of renewables to be built.
Matt: So to lower bills, we need to be building more renewables.
Rebecca: Exactly and do you know what? We are just not. Before 2015, the investment in this kind of energy infrastructure was on a trend on the way up but it’s kind of levelled off since then. Basically, our governments are just not investing as much as they need to be. Countries around the world are under-investing in energy supply. What this actually means is that we’re probably not just facing a blip in terms of this energy crisis but it is going to go on longer term because, of course, it will take time to be able to build up the supply.
Matt: Again, if we’re electrifying everything from your car to your cooker, then that’s going to increase demand and if we don’t have supply there at the right times, then that’s going to create pinch points that the market price is going to reflect. Yeah, absolutely. This carries forward. Before we bring the guests in, we’ve got time for a weird one.
Rebecca: Definitely and this certainly links to what we’ve been talking about. We’re all in an energy crisis and we’re all freezing in our homes. Carys, our producer, is sat with a woolly hat on but not a jacket on today [laughter].
Matt: She’s in Spain, for goodness sake! [Laughter]
Rebecca: Absolutely.
Matt: We’re north of the wall all the way up here. Yeah, I say it’s a weird one. I chuckled when I read it and then I got sad and then I got angry. Those were the three phases of reaction to this. I wrote an article on The Conversation called Energy Discounts are a Sticking Plaster. It’s basically saying that Rishi Sunak’s plan to reduce bills by a £200 repayable discount and other bits and bobs around that are a sticking plaster. They’re not dealing with energy efficiency. They’re not dealing with the root cause of the problem. What I wasn’t expecting was the flood of comments to come in on this piece. I think there were about 50 or 60 comments on this and some were really wide-ranging. I won’t name the individual but one of them triggered a series of other responses and they basically said – I’ll quote – ‘a month ago, we bought top-to-toe ski suits which we wear with woolly hats and warm boots for about the same cost as our winter fuel payment of £100 each.’ They go on to explain that they live in these insulated onesies with thick boots on. This has been a response to try to cut their central heating hours from 17 hours a day down to just two in response to cutting bills. The number of comments that came in on the back of this was people saying, ‘Yeah, we’re doing this too. We don’t really have much scope for insulation (depending on the housing stock they’re in). We’re so reliant on gas, electricity or oil and we’re doing other stuff.’ The two key reactions were to wear more stuff and burn wood or coal.
Rebecca: Having lived in New Zealand for five years, where the homes are pretty poor quality and huge swathes of the population on the South Island are living in what would classify as fuel poverty if they actually heated their homes up to World Health Organisation standards, it was not uncommon. I’m pretty sure I remember seeing articles and adverts for effectively sleeping bags that had arms and legs... the same sort of concept. In fact, I remember one of my colleagues, when I was working there, was looking at how some of this played out in organisations. She was interviewing factory workers and these factory workers, when they got their welcome induction package, it included woollen underwear to keep them warm [laughter].
Matt: That’s unbelievable.
Rebecca: Yeah, absolutely shocking.
Matt: But that’s where we’re at. I say I chuckled initially but the couple here were in their mid-70s, so older than my folks but I did chuckle because I did imagine my mum and dad just shuffling around the house in their old skiing gear [laughter]. Anyway, we are running out of time and our guests are knocking at the proverbial door. I think we ought to pause there, Becky, and welcome them in.
Rebecca: Absolutely.
[Music flourish]
Kayla: I’m Kayla Ente. I’m the Founder and CEO of Brighton & Hove Energy Service Co-operative.
Nigel: I’m Nigel Cornwall. I currently run Hydrogen East and Net Zero East and have been an active consultant and commentator on the sector for the greater part of four decades.
[Music flourish]
Matt: Kayla and Nigel, welcome. This is a subject close to my heart and one I’ve been desperate to get you both on the pod to discuss which is about community energy, the trials and tribulations it faces, what the future might look like and crucially, what government could do to unlock the potential we have in the UK. Now I wanted to begin, Kayla, with the organisation that you are intimately familiar with. You are the founder and you are the chief executive of Brighton & Hove Energy Services Co-operative. This is a fantastic story of a community organisation which is doing some fantastic things in Brighton and Hove. So for our listeners, could you please explain a little bit about what BHESCo is, what it does and the type of value it provides to the community?
Kayla: BHESCo develops projects across Sussex and now we have a project in Kent. We started our first projects in 2015. I founded BHESCo in 2012. It took me three years to get everything going but actually, it had been a dream of mine for about 20 years before that [laughter], so it’s been a long time in the making. It was always meant to be an energy services provider but when I moved to Brighton to set it up, I was doing some work for the local authority. It was helping people who were getting energy work done on their homes. I saw, for the first time in my life, the impacts of fuel poverty and people who were really suffering with being unable to pay their fuel bills and the impact that it had on their confidence and their ability to make a contribution to society and even productively live their own lives. My original idea of developing and removing the barriers to the uptake of renewable energy transformed into the idea of how can we make contribution to reducing fuel poverty through the uptake of renewable energy and energy efficiency which seemed to make enormous sense to me since once you put the measures in, people are using less energy and if you have renewable energy, then they’re generating it for free from natural resources like the wind and the sun. In Brighton and Hove, we do a lot of fuel poverty work. We’re the main organisation that rolls out fuel poverty programmes for the council because they’ve recognised that we can do it cheaper than they can do it themselves and we give a better service because we go and do home visits. We give our people a tremendous amount of attention. We develop projects across Sussex and Kent. We’ve now done 57 projects and those are all renewable energy and energy efficiency projects and we’re now moving into decarbonisation of heat in rural communities. We have worked on one community in the past and we’re working on two now and we’re really starting to see what a difference we can make with innovative finance and our knowledge of energy efficiency and heat pump technology.
Rebecca: Well, it’s clear how passionate you are about this. Was it a labour of love? Did you have to put in a lot of blood, sweat and tears to get it set up? Did you find that you were well-placed because of your background or were there key challenges that you encountered as you were going on this journey of getting what seems to be a very exciting and innovative organisation established?
Kayla: In 1998, I won an award for financing renewable energy projects. I was working for a Dutch energy supplier called NUON. It was at that time that I became really obsessed with financing renewable energy because the main problem is that the returns are over a longer period of time and people want short-term payback. It seemed elementary to me that if you matched the finance to the payback that you could get from the technology, you had a winner. That was the fundamental principle behind BHESCo. That was in 1998. It took me, basically, 14 years to get that going. I tried to do a similar thing in London but it didn’t work. I didn’t have the community cohesion that I needed. It wasn’t until I moved to Brighton that I had enough of a community to really start the idea and for the first three years, I didn’t get paid. It was a lot of blood, sweat and tears and a lot of dedication but it was something that I wanted to do. It’s like a lifetime legacy. It’s something that I can leave behind.
Matt: Obviously, BHESCo has been in existing for ten years and in that decade, I just wanted you to reflect on what have been the major successes but also, as any entrepreneur knows, things don’t go right, whether they’re somebody else’s fault or a lesson that you’ve learnt. I just wanted you to reflect on the successes and failures over that ten year period. What are you most proud of and what are the things that got away and you wish had been done differently?
Kayla: I set up BHESCo as a consumer co-operative because our customers are our top priority. It’s also a social enterprise which means that we are most concerned about carbon emission reductions and least concerned about making a profit. Our customers come back to us time and time again and I think that’s a tribute to our business. This one customer was one of our first customers and we installed a heat pump, underfloor heating and 27 kilowatts of solar at their school in Framfield. They were emitting about 120 tons of carbon emissions a year when we started and they were on oil heating. We’ve just finished a project last year where we installed a ground-source heat pump. We have removed their oil boiler and they’re emitting about 20 tons of carbon emissions a year. We’ve been able to reduce their carbon emissions by 100 tons a year. They’re continuing to work with us and we’re working on heating controls for them now. It’s a long-term relationship and I think that this is really where the quality and the customer service comes in because for renewable energy and energy efficiency, you really do have to be there for the customer. I hear so many stories about failing solar arrays and problems that happen and the customer knows they can just call us and we’ll fix it for them. That’s really invaluable in our industry. The first failure was not a failure. It was just disappointing [laughter].
Matt: I’m at a school of entrepreneurship. The first lesson is there’s no such thing as failure. There are just lessons [laughter]. Let’s get that out of the way.
Kayla: We did a heat network for four buildings and it was a biomass boiler that we put in. It was my first project and it was the first customer that wanted to work with us and I was just so keen to have a customer because I knew that once I got my first customer, we would get more people on board because we had a track record. We put in this biomass boiler and this heat network. It was quite a large investment for us at the time. It’s just been a catalogue of problem solving since then. Biomass is fairly difficult to balance because of the problems with heat load, the problems with the fuel, the efficiency of burning the fuel and so many elements that I made certain estimates on in the financial model and we’re losing money on that project. Hopefully, we’re going to win it back because it’s a relatively long contract but that’s been a struggle for me and also because the customer has gone through quite a lot. Although they’re still happy, they’re working with us and they see the dedication, you want to really do the best you can for your customers.
Rebecca: When you were telling us about your successes and you said you’d cut 100 tons of CO2, I thought, ‘Gosh, that sounds like a lot but what is that?’ I was trying to get my head around it [laughter] and Google has very nicely informed me that that’s equivalent to 260 economy flights from Amsterdam to Rome. There are lots of other comparisons but that’s huge! I mean that is unbelievable.
Matt: Wow! That’s a school trip [laughter].
Kayla: To be fair, the biomass does the same. The carbon emission reductions are about 100 tons. They’re not burning oil to heat those four buildings and they’re saving a lot of money. In a way, it’s good for them all around. We’re losing money. I suppose it’s growing pains for us but the important thing is we’re meeting our goal of the carbon emission reductions.
Matt: And also schools are a fantastic focus for education in terms of these types of projects. I’m guessing, Kayla, you’ve had this ability to see these projects taking place in schools and the kids being able to learn more about what these projects entail, how they’re delivered and what they do.
Kayla: Yeah, I go around talking to kids at schools quite a bit. I was just at a school today and the kids are just so behind all of this. They get very excited about the idea of an energy co-op that is working to improve society and cut carbon emissions. It’s a dual-pronged goal. We want to improve people’s lives and do something for the environment at the same time.
Rebecca: It sounds absolutely brilliant what you’re doing and hitting a lot of the goals that are also on the government’s agenda. We have these very clear net-zero targets and it sounds like the work that you and BHESCo are doing is really helping to deliver on that. Are you getting support from government to do any of this? Has it helped you out or has it been a bit insufficient?
Kayla: Well, since about 2014, the government has consistently taken away benefits to businesses like ours who are working very hard to make a change in the energy industry. The first was the cut in the Feed-In Tariff and the abandonment of the Green Deal which ended up costing, I think, something like £250 million. Maybe Nigel knows this better than I do. I think the fact that the whole Green Deal programme failed, which mostly paid the solicitors who set it up on behalf of the government, meant that we lost a lot of our suppliers as well because suppliers were required to pay money to join the procurement lists of many local authorities. They lost money and the industry was really decimated. Whereas in 2014, for example, we might have had ten insulation installers here in the area of Brighton and Hove, now we have none; absolutely none. There’s nobody to do the work. We have so many customers because we do energy surveys and people really want to do the work but we don’t have the people to do the work.
Matt: So there’s the consumer demand for the surveys but just nobody to deliver them.
Kayla: Yes, absolutely and we saw that with the failure of the Green Voucher Scheme because we had so many people... the phone was ringing off the hook of people who wanted energy surveys, energy plans and work done. It was incredible the amount of demand that was generated by the Green Voucher Scheme. That was another complete failure where 25% of the government’s budget was spent on administration.
Matt: Yeah, and consultancy fees. I can see that Nigel has been sitting there quietly, extremely well-behaved and nodding ferociously to much of this [laughter]. Nigel, your experience covers across the whole sector and, as you say, for many years, you’ve worked in this space. Just reflecting on what Kayla has said about some of the failures, I just wanted to get a sense from you about what kind of support has been in place from government for community energy, how that’s evolved and is it fit for purpose at the moment?
Nigel: I think the simple answer is absolutely not. I think just listening to Kayla, who’s done an absolutely splendid job over a very, very long time and extraordinarily well-regarded in the sector as a consequence, if you flip back to 2014, I think many of us thought we were due to turn a corner. We had a community energy strategy. There seemed to be real interest to learn from failures like the Green Deal but somewhere in the telling of the tale, something has gone very badly wrong. There is range of reasons why government seems to have changed its mind on quite important issues. It’s obviously withdrawn the Feed-In Tariff which was very, very important. We’ll probably pick that up again later in terms of how do you kick-start activity but it’s taken away so many incentives around local production and consumption of energy that the gap between what the policy says and how it is delivered is huge and it is widening even today, despite the net-zero strategy. I think this is very timely this debate. Something has to be done. It’s very difficult to get consensus on what that might be. I guess it’s a very congested space with suppliers, regional stakeholders and increasingly local authorities and it is very, very difficult to pick your way through this.
Rebecca: Nigel, picking up on one of the things that Kayla brought up around the demand for this; obviously, there is a financial element in here around the incentives. You mentioned the Feed-In Tariff and, of course, the Renewable Heat Incentive and lots of other things like the Green Homes Grant. There were all of these things that appeared for various periods of time and are no longer or are changing shape. Another part of it seems to be the lack of installers. I’m just wondering if it’s also partly due to the uncertainty around the policy and that it’s not just about finance but there’s an element of building the supply chains. Do you think that that’s to do with the longevity of these policies?
Kayla: Most definitely because in order to build the supply chains, you have to demonstrate demand and if there’s no incentive to create demand, then people won’t go into that industry because you don’t have a consistent revenue flow. The other thing I wanted to say is that the RHI (Renewable Heat Incentive) has been extremely helpful in decarbonising heat and now that’s going to end at the end of March. We’re constantly trading in an environment where the playing field is changing all the time. It’s very, very difficult to be flexible enough to operate within this changing playing field.
Matt: So it’s changing and some of it has changed because there was the conclusion was drawn fairly quickly that some of these policies didn’t work; whereas, some policies were halted because they were too successful and I’ll suggest that the Feed-In Tariff is an example there. Nigel, reflecting on this, is a bad policy worse than no policy? I’m thinking of the Green Home Grants as an example here. At the moment, we’re kind of in a position where there aren’t really any policies from the UK government or there are very few that are directly focused on community energy. There are other policies that communities can leverage but we’re kind of in a position where there’s an absence of focused policy. Is this preferable over rushed policy like the Green Home Grants?
Nigel: No, we can’t be accused of rushing to anything. We’ve spent the greater part of the period since 2008, in my opinion, searching for perfect answers within a very fragmented government process and most of the interventions have not been given time to work through. I think you’re absolutely right that the Feed-In Tariff did what it said on the tin. We should have been looking at extending that into other areas around heat and transport rather than take it away. We didn’t just take away the incentive. We completely changed the legal framework within which people like Kayla’s organisation can actually get routes to market. The one good thing about the Feed-In Tariff was that you knew you could get a firm export rate for the life of a project and that’s why it was so successful. Arguably, it was too successful and I don’t know enough about Sussex but you ended up with schemes in the wrong places. People went on a bit of a feeding frenzy but, nevertheless, it pulled through renewable generation and has achieved significant systemic carbon abatement which is what I thought we were all trying to achieve. We need policies. We’ve tried various things, particularly on the heat side. I’m permanently baffled by where we are in the policy formation process but if you just rewind to the net-zero strategy that appeared in October, there was absolutely nothing around community energy and what the role of local authorities should be. Clearly, they need to work together but there are no mechanisms for achieving that. I think there are two policies that were clearly signposted. One is the Rural Community Energy Fund which, if you’re lucky, you might get £40,000 to test a project if you are in a qualifying area and that has to be defined as fewer than 10,000 people. Its coverage is very, very limited and it’s administered by the energy hubs who have still got a lot to learn in my opinion. There was something, which I still don’t understand, about having access to monies in the Voluntary Redress Fund. This feels as if somebody is trying very hard to show that they’re doing something without really understanding what the outcome is. So it’s tactical interventions that don’t work together that confuse people and over this period, going back to 2008, the supporting infrastructure and supply chains that are needed at the regional level have simply not developed and that is a fundamental problem given the government’s aspirations around net zero.
Rebecca: I’m glad you brought up the net-zero strategy because I remember reading through it at the tail end of last year and being excited at first when I saw the mention of these local aspirations and not just around the local authorities but community groups as well but then there was absolutely nothing in there seemingly to support the delivery of that. There was no devolved responsibility and no funding schemes. It was very stark in an area where I’d hoped to see more. If we’re thinking about this and we’re two years into our decade of action where we’ve really got to make significant headway if we’re going to deliver net zero... I guess that maybe some people would say the ‘if’ probably isn’t there but I like to be hopeful and still hope that we might be able to do it but if we are and if we need that strong leadership through some of these policies, Nigel, what would you like to see? What policies do you think are absolutely critical for us to be able to get moving in this space and moving fast?
Nigel: My personal view is that something is needed through using local authorities as enablers. They have a place-shaping role. Their brand, for want of a better term, is usually quite good and they themselves start to need to deliver changes that will reduce their own carbon footprints. They’re doing it to differing degrees. We’re working with a couple of local authorities up here who are looking at net zero by 2030. Everybody needs an aspiration but they also need the toolkit to deliver it. There is a further point, which I’ve occasionally mentioned, which is that there tends to be an official view that net zero is something that’s done to people and communities and building the engagement and working out what works in one place but not another is very, very important. There’s a very long way to go down that road. At the moment, the position that we’re finding ourselves in is that government has increased its expenditure on net zero quite dramatically between 2019-2021. I think it was £70 million to over a billion. These are streams of funding that are put out at short notice and which many local authorities, particularly more remote and rural communities, struggle to participate in and the money is being routed into a number of trophy schemes in repeat places which is good for those who can qualify for it but we need a much broader push across all types of local authorities and communities.
Matt: So, Kayla, obviously you work very closely with the local authority and you’ve said that you’re one of their preferred delivery partners for issues around energy efficiency and fuel poverty. I think there are two points that Nigel raised... well, I’m going to pull two out. One is how communities can benefit by policies that support local authority delivery or local delivery and the second there was policies that require some degree of place-based citizen engagement to understand what it is that those communities want and want to engage with themselves. So reflecting on BHESCo in Brighton and Hove...
Kayla: Well, Nigel was absolutely spot on in that these opportunities for local authorities to apply for various funds is very short notice and a very quick turnaround. Our local authority can’t make those deadlines. Their administrative processes are, by their nature, too long to be able to accommodate the short deadlines. We haven’t been able to engage with our local authority on getting any of these programmes going because the policy of the local authority is that contracts over a certain amount need to go out for procurement and we would have to go through a rigorous procurement process in order to be able to win any contracts. We’ve tried with a local authority to get on their procurement register which was one outside of Brighton & Hove and because we’re relatively small, we didn’t win the tender process. I’m not necessarily picking on the Swaffham Prior project which is very famous now because they’re taking on revolutionary action to decarbonise heat in their community which is really laudable but the issue is that the latest result was that it’s going to be £13 million to perhaps provide heating to 40 homes. That’s £325,000 per home for heating provision. Now I don’t know if that’s because it was run by a local authority and a lot of money was thrown into that with expensive consultancy. I’ve got a project for a village of 330 and we’re working with the parish council there and we think we could get heat networks in there for everyone in the village. Some can’t be on a heat network because it just doesn’t make a lot of sense but we’re talking about combining energy efficiency with either ground-source or air-source heat pumps for a total cost of £11 million for 330 homes. There has to be some kind of requirement that the local authorities work with the community energy groups to bring in a comprehensive approach and bring in best practice.
Rebecca: It sounds like a no-brainer to me but how can we make government sit up and listen? How do we sell this to government if it’s so important? Kayla, have you had any experience of trying to do that or any successes for making people sit up and realise the benefits of this?
Kayla: We campaign all the time about this. We’ve written our own ten-point plan because we’re not in agreement with the government and its approach to creating clean, affordable energy which is really what we should be aspiring to as a nation. We also have Community Energy England which is the voice for community energy groups across the country of which there are over 300. I’m not sure off the top of my head how many there are but most communities have a group of interested people who really want to make a difference to the people living there. We’re working on two rural community energy funds with people who are completely engaged, very hardworking and trying to make something work. It’s this combination of local energy and working with experts that could really transform communities but the point is that government funding needs to be made available. Government can’t look at these pet projects, like Nigel was saying, that are not going to deliver value for money. We have to be very targeted in what we do and we have to have a concrete and well-executable strategy for rolling it out. I’m not saying community energy is the answer. I think that it’s part of the answer. The answer is larger.
Matt: That’s really important and I’m going to come directly to Nigel on this. Nigel, you work very closely, as I understand it, advising government and industry on a whole range of matters relating to local and community energy. What is your sales pitch or if you were to develop one, what would it be? How are you positioning community energy and the contribution it can make to, I guess, three things? One is the energy crisis, the second is net zero and the third is a just transition which are, in one form or another, on the table or the in-tray of energy ministers across the UK at the moment. What does community energy do and how do we sell the idea?
Nigel: I think it needs to be done in two very different ways. You’ll be familiar with all the discussions going on around the Local Electricity Bill at the moment which I think actually is a little bit of a distraction.
Matt: I just wonder whether you could unpack that a bit, Nigel, just for listeners about what the bill is and why it’s important please.
Nigel: I’m not sure what it is now. It was a Private Members’ Bill but it’s a different sort of piece of legislation. It was rolled over from the last parliament. Previously, Peter Aldous was one of the backers and now Wera Hobhouse is and one or two other new MPs but basically, it’s seeking to create a right to a local electricity supply but doesn’t actually say how you can do it. This really takes you right back into the guts of one of the real problems that overhangs all decentralised activity in this market which is a very centralised electricity supply market where everybody has to be a licensed supplier. The costs of being a supplier, from a compliance perspective, are high and they’re even higher now because of all the costs of the good policies that are being pushed out to consumers like FITs (Feed-In Tariffs), ROCs (Renewables Obligation Certificates) and the Energy Company Obligation. So a lot of the things that Kayla is involved with on the ground... the historic legacy costs of policy flow through to suppliers and the government is very concerned, as is our regulator Ofgem, that in some way, this will lead to free-riding on the system and people avoiding costs. I think it’s a lot more complicated than that and I think there are some levers that could be pulled but the fundamental issue is we have a national supply market with very large scale players who aren’t particularly interested in what happens at the local level. I think there are some exceptions to that, like Octopus, who are doing some good stuff around Energy Local and schemes like that but with the recent turbulence in the supply market, a lot of the other people who are looking at what I would call unconventional supply offers or innovative supply offers have failed. That is a particular issue for the government around not just doing something but doing something today. The positive point I would make is that if people are seeing average bills of £2,000 a family per household, that really does make people focus on the things that they can control. Fuel poverty is going to be the huge issue next winter. We’re going to see another rise in the price cap in October and typical tariffs over £2,100 maybe. I think, to answer your original question, there needs to be a means of persuading politicians that not only is this the right direction to allow people to help themselves, it is not going to create a lump of costs that are just going to be smeared over everybody else.
Matt: Instead of us talking about what we need to do to convince government, do we think the energy crisis might just be convincing citizens to act like communities again in terms of organising themselves, as you say Nigel, to control what they can control and do something about this mess by setting up their own community energy organisations that can implement efficiency measures, drive down costs and decentralise generation or whatever it might be? Might this energy crisis spur some communities into action?
Kayla: I’m really looking forward to that opportunity. My dream is that communities generate their own energy locally and can control their own pricing. Nigel is absolutely spot on that Octopus is a leader in this area and we do work with them fairly closely. I think that community energy groups could be a route to market for the energy suppliers and there is a big opportunity for community energy groups to do the work on the ground to help generate not only customers but local generation and control more of our own costs. That’s where the difference really comes in.
Nigel: I think the rising cost of energy will make people focus. I think that’s going to be more important in the short run than aspirations about net zero but I think if government was being smart, it would link the two because it is all about empowering communities to adopt solutions that work for them. It will differ from one place to another.
Rebecca: It’s an interesting question that you pose, Matt, and it’s making me think as well. I’d love to see the energy crisis prompt the establishment of more community groups that do similar work to what BHESCo is doing but reflecting back to where this story started - the 12 years that it took to get stuff set up; the blood, sweat and tears and the knowledge that you need to have of legal structures; the finance sector that’s changing constantly – what worries me is that we’ll end up with a very uneven landscape here. I think there are some real challenges but I guess this really brings me to where I’d like to end our discussion which is on the much more practical side. We are Local Zero and we are all about local action to drive net zero, whether that’s action in our communities, action as citizens or action as consumers. We have all sorts of different roles we can play in this. Maybe you can share some thoughts about what we can actually take away from this and how we might be able to do things differently as individuals or as communities to support the growth of community energy organisations like BHESCo and others and start to tackle some of these serious issues.
Nigel: Yeah, I guess I should introduce a point I should have started with which is I’m operating in a community energy desert in East Anglia. It’s one of the reasons why I’m trying to lift the profile of the issues. We have none of these 330 groups that Kayla referred to, so there’s a very long way to go. I think there is an uplift of awareness of the need to take control locally. There’s a long way to go. Many of you will be very familiar with this concept of local area energy planning which has gained some momentum. That may or may not be a way to build understanding and understand what local needs are. We are, through Net Zero East, trying to do something very different. I think Matt is familiar with a little bit of this which is we’re taking eight representative, whatever you mean by representative, market towns in this part of the world and looking at what is there, what the challenges are, what the fuel poverty levels, what the energy assets are and trying to come up with strategies or recommendations that suggest how they might move forward. I think something facilitated like that is very necessary, even in areas like the South which has got a lot more richness around the debate on community energy than we have here in East Anglia. Somewhere in this, we have to not only show people what good looks like but allow them to embrace that and then take ownership at the local level across the energy spectrum.
Matt: Kayla, you have the final word. What do we do? What’s the answer?
Kayla: Part of my dream is that we become highly experienced in all these areas and then I could go out to talk to other groups and help them. That’s part of what I would like to start doing as BHESCo becomes more and more independent and can just do its own thing. I was a peer mentor. The Centre for Sustainable Energy ran a peer mentoring programme for other community energy groups. A lot of times, these people are volunteers and they don’t have all of the time that one would like to be able to devote to solving this kind of problem. I think that the local authorities should work more closely with the people in their local communities. Local authorities have the advantage because they have access to very low-interest funding, if not zero-interest funding. They are the target of a lot of central government funding now. I think that if there are people in the local community who can help, like Nigel says, identify the areas where local generation is possible... people have ideas. I go to communities all the time and talk to them and see what the possibilities are. I think there are two fundamental problems. One is that people feel a little bit helpless, they don’t know what to do, they don’t understand the technology and they’re afraid of it. I don’t think that they really recognise that energy prices are now going to continue to rise. I think people who have oil heating – and I know this because we’re engaging with these people – think that it’s going to be okay and they’re going to continue to pay £0.60 a litre and it’s all going to be fine but that’s just not the case. Also, the other thing is that we have a lot of people who are used to having energy delivered to them in a certain way and don’t want to change. They don’t want to invest in the change that we need.
[Music flourish]
We need people raising awareness of the change that is needed and we need leadership to drive that change.
Matt: I couldn’t have said it better myself. Kayla and Nigel, thank you very much for your time and your wisdom. It’s been an absolute pleasure having you along and hopefully, one day soon, we’ll get you back on but I’m afraid that’s all we have time for. To the listeners, if you want to engage any more in the debate here, please do find us @LocalZeroPod on Twitter and engage in the debate there. Let us know your thoughts and feelings on what we’ve discussed but until then, we look forward to hearing more from you by email or on Twitter and thank you once again to our guests. Until then, goodbye.
Rebecca: Bye.
Kayla: Thank you, Matt. Bye.
Nigel: Goodbye.
[Music flourish]
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