What is the single most pressing issue in the debate about decarbonising heat?

The simplest questions are usually the best. By many measures, heating accounts for around half our total energy use. The cost of that energy has gone up significantly in recent years. Less than 5% of our heating is from renewable sources.

We all know the problem, how to get the first two of these measures down and the third one up. So here's where the simple question comes. What is the one thing we should focus on?

It would be tempting to use this opportunity to lobby on the political environment and support mechanisms or to wax lyrically on new technologies but I don't believe that either of these important areas are the one big thing. So what is it? I believe it’s Behaviour. 

Let me explain. The reason why we don't insulate our homes or set our thermostats and time clocks correctly is behavioural or to put in bluntly, we can't be bothered.  The reason why district heating is so hard to get going in the UK is because we all want our own boilers in the corner of our house. The reason that biomethane struggles to make inroads is that we don't regard organic waste as a valuable fuel and just throw it away. The reason we don't install new technology such as heat pumps is because the old ways are easier. 

We don't need more engineers and lobbyists taking part in the heat debate we need behavioural economists, anthropologists, psychologists and sociologists to work out how to get us off our backsides and actually do something.

Top ideas for how business can help combat climate change

Last week when I was idly Googling climate change I came across a list of ten top ten things we can all do to help combat climate change in the Independent. It got me thinking about what the same list would be for businesses so I used the Main Group meeting of Scotland’s 2020 Climate Group to gather ideas. From this bit of crowdsourcing, we came up with a range of ideas, which I have distilled down to 11 and I thought I would share them with you.

1. Know how much energy your business actually uses. This should cover power, heat and transport across all locations and will involve active monitoring. If you don’t measure and monitor you can’t manage.
2.  Work with your supply chain to find collaborative solutions on things like packaging and transport. Optimising across single firms rarely produces the best outcome.
3.  Use digital technology such as video conferencing, Skype and tele conferencing to reduce travel particularly for internal only meetings. In fact try and make these the default choice for in house stuff.
4.  Put all company drivers through a full efficient driving course. Most firms see a 10% to 15% improvement in fuel consumption.
5.  Identify and support climate change/energy champions throughout your business and create a culture of bottom up innovation. Using small groups of committed people is a great way to effect change.
6.  Conduct an energy audit of your entire IT estate including servers and desktops and identify potential improvements and investment opportunities. The IT industry has made good progress on reducing energy consumption in their products but many businesses haven’t kept pace.
7.  Encouraging more efficient commuting patterns for both employees and those in neighbouring SMEs. This could include promoting and incentivising car sharing or the use of public transport.
8.  Integrate energy savings targets into managers key performance indicators with a dedicated budget for energy efficiency projects. This sends a clear message that it matters.
9.  Take a long hard look at lighting both in offices and in other areas such as warehouses, yards, factories etc. This can be a very fruitful area of investment
10. And finally and probably most importantly; its all about leadership. The tone from the top really matters. The Board and senior management team have to lead by example, support proposals and generally champion this whole area.

The Scottish Government has developed 10 key behaviours to highlight the key things households could do to make the biggest impact on climate change. This was quite a big project taking into account a lot of research on carbon emissions reductions.

Instead of producing a top 10 list for businesses, the Scottish Government have published ‘Better Business: How to go greener with staff’ as a performance guide which sets out good practice case studies. We have the opportunity to add a different perspective and I wonder whether our list of 11 is a way to go. Any views welcome…..

More reports and press releases

The UN panel on climate change, which issued its fifth assessment report late last year has followed up with two more reports. The first, published on 31 March, looks at the risks and potential benefits of climate change. The list of potential risk areas is alarming. Here are a few that grabbed my attention.

1. Risk of death, injury, ill health or disrupted livelihoods in low lying areas along coasts and in island states due to storm surges and rising sea levels.
2. Risk of severe ill health and disrupted livelihoods in large urban areas in some regions due to inland flooding.
3. Extreme weather events leading to the breakdown of critical infrastructure.
4. Risk of food insecurity.
5. Loss of ecosystems and biodiversity and therefore the goods and services that we get from them.

The report also highlights a moral issue when it says “risks are unevenly distributed and are generally greater for disadvantaged people and communities at all levels of development”. It makes two rather obvious but powerful points as a summary. Firstly, “increasing magnitudes of warming increase the likelihood of severe, pervasive and irreversible impacts” and secondly, “the overall risks of climate change impacts can be reduced by limiting the rate and magnitude of climate change”. This second point serves as a good introduction to the latter of the two reports.

This second (third actually published but the second I am looking at now if you get my drift) covers mitigation: what we could do to slow down the effects we are causing. At its basic level the report describes mitigation as “a human intervention to reduce the sources or enhances the sinks of greenhouse gases” which for an academic report is remarkably concise. It goes on to say that sustainable development is a good basis for mitigation and that issues of “equity, justice and fairness” can arise. Although the report is mainly about mitigation it does have a couple of good stats in it:

• CO2 emissions from fossil fuel combustion and industrial processes contributed 78% of the total GHG emissions increase from 1970 to 2010 which shows where our attention should be focused.
• About half of the cumulative man made CO2 emissions between 1750 and 2010 have occurred in the last 40 years so it really is our fault.

The academics have looked at about 900 mitigation scenarios in preparing the report. Their basic conclusions are that if we want a better than evens chance of restricting the rise in global temperature to 2 degrees we need to do more, quicker than we are. When they start reaching conclusions on what needs to be done the message is actually fairly clear as promising scenarios “show large scale changes in the energy supply sector” and “energy enhancements and behavioural changes, in order to reduce energy demand compared to baseline scenarios without compromising development, are a key mitigation strategy”.

Looking at electricity supply specifically here is probably the key sentence. “In the majority of low stabilization scenarios, the share of low carbon electricity supply (comprising renewable energy, nuclear and Carbon Capture and Storage) increases from the current share of approximately 30% to more than 80% by 2050.” The last few pages of the report (23 to 29) contain a good summary of what the global community needs to considering the areas to electricity, transport,  buildings, industry agriculture and land use, and in a final category of human settlements, infrastructure and spatial planning by which they mean smart cities.

In response to the second report the UK’s Secretary of State for Energy and Climate Change, Ed Davey, said; “I call for international leaders to work together with enforced vigour to reduce carbon emissions and secure an ambitious legally binding global agreement in 2015.” I am not sure what ‘enforced vigour’ is but I do know that it is not only ‘world leaders’ who have a responsibility to act but the whole of society particularly in pressurising those ‘world leaders’ to actually achieve something more than good reports and nicely worded press releases.

Better growth: better climate

I have been reading an interesting report called ‘Better Growth: Better Climate’ which was recently published by the Global Commission on the Economy and Climate. It was kicked off in 2013 by a coalition of seven governments; the UK, Colombia, Ethiopia, Indonesia, Norway, South Korea and Sweden (an interesting mix, I must say!)

They effectively identified three key systems; energy, land use and cities and three drivers of change across the systems; raising resource efficiency, investment in infrastructure and stimulating innovation. Whilst these are not comprehensive they do, I believe, set out clearly priority areas that reflect closely on what we are trying to do in the 2020 Climate Group. They then go onto outline a 10 point action plan. I won’t list them all as you can access the report through the above link but I would highlight one. They recommend that climate should be integrated in key economic decisions. I would add that I believe this has to be a both government and individual organisation and business level.

I will let the report’s conclusion speak for itself….

countries at all levels of income now have the opportunity to build lasting economic growth at the same time as reducing the immense risks of climate change. This is made possible by structural and technological changes unfolding in the global economy and opportunities for greater economic efficiency. The capital for the necessary investments is available, and the potential for innovation is vast. What is needed is strong political leadership and credible, consistent policies.

Lighting up education

On our second day in Kenya one of our hosts, Vincenzo, took us to a school in Tinderet. It was a three hour drive into the country on roads that will mean I will never complain about Edinburgh potholes ever again. The school is in the middle of a tea plantation and schools are one of Sunny Money's main channels. They tend to work through the headmaster and offer special school prices. We went to this particular school as this was one of the trials of a new product but more of that later. 

Even though it was still the school holidays we were greeted by about 40 children who were all polite and stood up when we entered the classroom. The headmaster led a question session with both the children and some of their parents. About half of the kids said they were using solar lights and assured me that this allowed them to study longer at home. I said that they were just saying this to impress the headmaster but the research that Solar Aid and Sunny Money have done says that on average children spend an hour a day longer studying with solar compared to kerosene. The headmaster also stressed the safety aspects telling us that lots of small children get burned from kerosene lamps. After the formal session the children clustered around us making us feel like minor celebrities. They seem fascinated by our long, straight hair and my ipad. 

Back to the new product. Mobile phones have completely changed the face of African communications and solar has the potential to do the same for energy. The new product links the two. Sunny Money have launched a pay as you go solar lamp that is available for a down payment of around $2. The light is fitted with a timer that is unlocked by a smart phone app held by the headmaster and after five payments then the light is completely free to use. The payments have been set to be about the same as the weekly kerosene bill. It was clear that this product was very popular. Vincent, the headmaster, said he had already sold 72 lights in two months and 54 of them had been fully paid for. Some of the parents were already asking for more and bigger lights. 

It was great to see how solar lighting was making a real difference to the lives of children in some of the poorest parts of the world. In fact, I will leave the last word to Vincent, the headmaster who said "whoever thought of these solar lights obviously cares about ordinary Kenyans".

Sent from my iPad

Business can make a difference

I am fortunate to have been to Africa a few times but this time was different. I spent a couple of days with Solar Aid visiting their Sunny Money operation. This is the organisation we are working with to implement phase 1 of Scotland Lights up Malawi. I spent some time in one of the more mature markets, Kenya, in a city called Eldoret. Sunny Money sells solar lights at affordable prices through a variety of different channels using donations to build the overall market, pay for product development and fund working capital. It is a social enterprise and one way of thinking of donations is that they are like the provision of the equity of the business. 

We were taken to four different vendors by the country sales manager, Lameck. We drove past the most basic, a freelance street stall, before stopping at the shop of an agent, Sara. When I say shop I should clarify that it was three different businesses sharing what was effectively a small space about the size of one of our garages. Sara's main business is selling solar lights to both general customers and schools and each month she sells about 1500 units. Her sales are equally split between men and women and the basic product retails at around $10 with a bigger model complete with phone charger adaptor at $25. These products are transformational for many Kenyan families freeing them from dependence on Kerosene. The payback between the upfront cost of a solar light is only about 6 to 7 weeks of  kerosene bills, it is a better quality of light and is much safer. I heard that living in a room lit by kerosene is like passive smoking 40 cigarettes a day.

After Sara,  we saw the next level of dealer, a shop called Highland Electronics. It was wall to wall stocked with all sorts of electrical products and solar lights were only one of these. The owner was interested in one of Sunny Money's development products. A solar powered TV! The final stop was to a supermarket which was in reality a small department store selling 1000s of different goods from school textbooks and shampoo to saucepans and, of course, solar lights. The owner is Moses Kiptanui, the famous athlete who won World championship gold medals for the 3000 metre steeplechase. When we told him we came from Edinburgh he mentioned that in the 1986 Commonwealth Games he was the second last carrier of the Queens baton before passing it to a swimmer who I assured him would have been David Wilkie. It was good to see that he is now a successful businessman in his home region and he was proud that he now employs over 70 people. He is ambitious and wants to open more stores so Tesco and Sainsburys better watch out as he is well used to clearing hurdles!

I found it  encouraging to see how solar lighting was not only changing people's lives but also stimulating grass root level economic activity. John, the operations director for the whole of Africa told me that after three years in Kenya, Sunny Money has sold around 500,000 lights and will be close to break even this year. If all goes well it should be profitable next year  which will allow Sunny Money to reduce its dependence on aid and mean it can stimulate solar in other countries. An illuminating day that shows how aid has created a business that is making a real difference. 

Sara, in front of her shop

A world class athlete, the solar aid team and yours truly.

Sent from my iPad

Leadership matters

Over the last few months there has been a great deal of debate about what kind of future we want for Scotland. Indeed this debate is continuing despite the fact that the referendum is done and dusted. That debate is now focussed on constitutional issues but has ranged over economic questions, social justice, public services and many other areas. However, one thing that has been notably absent is any thought about leadership. In most walks of life we know that leadership matters, be it the latest football manager sacking or the new CEO at a large company. This is also true for Scotland as a whole. All too often our politics is trivialised and personalised when we need to be focussed on the characteristics we need in our leaders.

In all walks of life our leaders need to be visionary, excellent communicators and master tacticians but I believe there are two attributes that we should expect from our political leaders but which are rare commodities. Firstly, in our modern, complex world no one person can be expected to be omnipotent. Leaders have to be team players who can both put the right leadership team together and then get the best out of them. That requires a rare attribute, humility. It was the US President, Harry S Truman who said "It is amazing what you can accomplish if you do not care who gets the credit".

The second characteristic we should expect of our political leaders is what the noted management guru, Jim Collins, calls Level 5 leadership although others have called it servant leadership. Collins says of these leaders that "their ambition has to be for the greatness of the work and the company rather than for themselves". For company you could read country. In terms of personal characteristics he says that "Level 5 leaders are a study in duality: modest and wilful, humble and fearless". We should value these characteristics over the ability to come up with a smart sound bite or to score points over the opposition.

As Scotland faces a challenging future with more powers our leaders will have more responsiblity and we, as citizens, should make sure we get the leaders we need and deserve.

Energy and the Scottish Referendum- do we know the result yet?

Energy has always played a key role in the Scottish economy. In the 18th and 19th centuries it was coal; in the 1950s and 60s it was hydro electricty and power from the glens; from the 1970s onwards North Sea oil has loomed large and made Aberdeen one of the worlds premier energy cities. Finally in this century Scotland has played a leading role in the low carbon revolution both in all types of renewables and in carbon capture and storage. With this rich heritage it is no surprise that energy loomed large as one of the key discussion topics leading up to the September referendum. The energy issues raised have, however, not been really settled by the vote and this would have been the case regardless of the outcome.

There are two issues worthy of further comment. Firstly, there is the debate over the level of recoverable reserves in the North Sea. I have seen figures ranging from 15bn barrels to 24bn. I suspect that even the bottom end with require really significant investment and technological advances but we have to get the regulatory and fiscal regimes right and stable to even get close to this range. There was momentum behind implementing the recommendations of the Wood Report earlier this year and I hope that momentum is regained now the big constitutional issue is behind us.

Secondly, the low carbon revolution I mentioned earlier is stuttering. There are many causes behind this but political uncertainty is certainly one of the biggest. The refendum created a large shadow over investment and innovation in the renewable industry in Scotland and I sincerely hope that good progress can be made before the UK general election creates its own shadow. We need to see projects, both large and smaller community owned ones, reach financial close and we need to see the climate of innovation and entrepreneurship return to both the corporate and education sectors.

The Scottish referendum has opened the Pandora's box that is the UK constitution and as the debate about things like devo max and home rule continue I am sure energy issues will emerge that have to be sorted. These need to be addressed quickly, clearly and rationally if we are to avoid further delay and disruption, or to use a good Scottish word, a guddle, in the two halves of the energy industry that are so important to the Scottish economy.

Energy and war; intertwined then and now

Given that it is the 100th anniversary of the start of the First World War there has been a lot of focus on 1914. This was the same year that the Energy Institute, of which am President, was founded. The Energy Institute century seems such a small event in comparison to the Great War but it does provide an interesting context. In the August 1914 issue of 'The Petroleum Review' it said "The review has never taken sides politically...yet it always recognises the incalculable harm which must result to the petroleum industry from such periods of unrest between nations. We can only hope that such counsels will prevail as will render the recourse to arms quite outside the question" Of course these hopes were dashed soon after. The same article goes on to say 'It is at such times as these that interest in the petroleum industry sinks into insignificance". This was also inaccurate. As Daniel Yergin says in his major book on the oil industry, The Prize  "For in the course of the first World War, oil and the internal combustion engine changed every dimension of warfare, even the very meaning of mobility on land and sea and in the air'. Whether it was Royal Navy ships recently converted to oil, taxis being mobilised to defend Paris or the introduction of tanks and aircraft to the battlefield, combat was radically changed in the years after 1914. Indeed by 1916 shortage of oil was starting to emerge as a major strategic theme. At the end of the war Lord Curzon declared "The Allied cause had floated to victory upon a wave of oil'

Military matters and energy have remained intertwined ever since as we are reminded on a regular basis and I suspect they will be for the next hundred years as well.