May you live in interesting times

We are now only a few months away from the UK General Election and, at this stage, it seems to be one of the most unpredictable for a long time, if not ever. In fact, one report that I saw analysed 10 different possible outcomes for who would form the next government covering majority or minority governments for both the larger parties and then a whole raft of different coalitions.

The election is being fought on more predictable grounds with things like the economy and the NHS coming to the fore. Every now and then another topic seems to dominate the media coverage and so far energy hasn’t been one of them. I hope that at some stage in the next few weeks it does get an airing as the new Secretary of State for Energy and Climate Change is going to face some interesting issues in his or her in-tray. I think that the following will be near the top:

1. How is the UK oil and gas industry responding to the low oil price and what can Government do to create a stable and supportive investment climate? This folder will, I imagine, recommend a quick visit to No. 11 Downing Street.
2. What will be the outcome of the complete investigation of retail energy supply and how should the government of the day react given that, since the investigation was launched, competition has increased and prices have decreased?
3. What progress is being made on implementing the recommendations of the Wood report to secure the long term stewardship of the North Sea assets to maximise long term recovery?
4. Is the much vaunted Electricity Market Reform actually going to secure the UK’s security of supply over the next couple of winters, and then put us on the road to decarbonising the electricity sector in the next couple of decades? This brief should recommend a long, hard and rigorous look at the capacity margin in the next two years.

Of course on the climate change side of the department the issues are no less serious as the new government will be taking part in the Conference of the Parties (COP) meeting in Paris later in the year where the subject of an international agreement on emissions reduction is, once again, on the agenda.

Here things seem a bit more positive in that the leaders of the Conservatives, Labour and Liberal Democrats parties have signed a joint pledge. This didn’t get much coverage as it was swamped by a megaphone debate on tax avoidance so I thought I would provide a link to the agreement, see www.green-alliance.org.uk/resources/Leaders_Joint_Climate_Change_Agreement.pdf

When I step back and think about the next few weeks I am reminded of the alleged Chinese proverb “May you live in interesting times”.

On 3 March, the EI will be hosting a pre-election energy question time in London with representatives from the political parties. This debate will provide delegates with the opportunity to engage in the discussion and express your own views on energy policy issues.

Access requires action

I have been reading an excellent report from the Shell Foundation ‘Accelerating Access to Energy’. The statistics are challenging. Here are a few:

1. Low income households in Africa spend up to 40% of their income on energy.

2. 1.2bn people lack any access to reliable and affordable electricity and for another 800 million the grid is unreliable and unpredictable.

3. Half the children in the developing world go to schools that have no electricity.

The Shell Foundation, through many years of experience have adopted what they call the “enterprise based theory of change”. This has involved identifying and tackling market failures, helping create social enterprises, patient and flexible grant funding and business skills development.

They have now refined this into a six stage process that takes between 5 to 10 years to reach maturity. The first three stages are to catalyse, pilot and create pioneers. The major step is number 4; scale. This involves a mixture of grant money and market revenues. It is this stage that we are getting involved with through Scotland Lights up Malawi. There is good evidence from Kenya and Tanzania that the model of distributing solar lights through schools works well and by about year 3 or 4 of the scaling stage the business can be self funding.

So if you haven’t donated to Scotland Lights up Malawi, the 2020 Climate Group's climate justice initiative yet please think about it, access requires action! You can find more details elsewhere on the 2020 group webiste but remember any personal donations are doubled until 5 February by UK Aid Match which matches any public donation pound for pound.

Less haste, more money

Less haste, more money

A few weeks ago I took the FuelGood driving course. It was both easy to do and informative. An Energy Saving Trust approved instructor turned up at my door and we went for a drive around town for about four miles, with me adopting my normal driving style. He then explained what I could do better and more efficiently and then we went on exactly the same course but this time he mentored me on what to do.

The results were impressive. On my first ‘normal’ drive I averaged 31.4 miles to the gallon but on the second it went up to 39.2; an improvement of 25%. My average speed dropped a little from 19.8mph to 18.5mph, so it took me a little longer, but in the grand scheme of things it was only a little longer. The whole thing took about an hour and it has changed my driving styleon an on-going basis.

Being an accountant at heart I decided to do some maths. Let’s say that I drive 500 miles in and around town each month – how much money would I save and how much extra time would I be behind the wheel? By my back of the envelope calculations, I would be over £18 better off having spent slightly more than an extra three minutes behind the wheel, each day. Not a bad trade off and the driving style is also safer and less stressful. An hour well spent.

Find out more about FuelGood here.o

When Grumpy saw the future

Scotland’s 2020 Climate Group got its name from the interim targets in Scotland’s Climate Change Act. But they are interim targets. The transition to a low carbon world will take longer and the real hard targets in the Act are for 2050. I will be 59 in 2020 and my time as a senior figure will be drawing to a close (about time, I hear many of you say!) but it is today’s 23 year olds who will be 59 in 2050. It is people in their twenties who will be the leaders running up to 2050. We recognised that reality, a year ago, by setting up a 2050 sub-group for those future leaders and on 26//11/14 they held their first conference.

They kindly invited a grumpy old man like me to give a keynote talk. Faced with over 200 committed and enthusiastic members and guests of the 2050 Group I felt compelled to apologise for my generation. We have lived through an era of unsustainable and unparalleled growth. In my lifetime:

-the world’s population has more than doubled from 3bn to 7.25bn.

-the number of cars on the roads in the UK alone has more than doubled to 32m.

-global oil consumption has nearly tripled to 90million barrels a day.

- we have gone from using about half the earth’s ecological capacity to support the whole of mankind to needing 1.5 earths.

This last point is really alarming because the last time I lookedthere is only one earth. We are, as a species, living beyond our means each and every year. All this combines to mean that ,global emissions of CO₂ have gone up from around 10bn tonnes a year when I was born, to 36bn now. At this rate we will use up the atmospheres capacity to absorb carbon without triggering changes that will undermine human wellbeing in around 20 years.We have a lot to say sorry for.

I also made the point that my generation struggles with new technology. We thought that texting wouldn’t take off, that the internet would get in the way of work, that Twitter was a passing phase and that selfies were pointless. We are either still living in an analogue world or are digital converts. People in their twenties are digital natives.

The challenge to the generation of young leaders is not to make the same mistakes as we have, to embrace technology and put us back on a path to sustainable living. As was said by Chris, the Chair of the 2050 Group, it started out as a sub-group of the 2020 Climate Group but has to become a movement in its own right.

I left the conference a lot less grumpy than when I arrived as I caught a glimpse of the future and was truly impressed.

CEOs, POWER AND SUSTAINABILITY

An article I saw in the Guardian entitled “6 Reasons CEOs feel powerless to drive sustainability into their companies” was bound to attract my attention.

I thought I would give the six reasons quoted and my response to each of them.

1.  PEER PRESSURE. The article says “CEOs are fearful of sticking their necks out in public when the vast majority of their peers, even those with sustainability programmes in place, remain in denial about the scale of the dangers from climate change, resource scarcity, growing inequality and the decimation of biodiversity” Frankly, I find the idea that CEOs can be excused because they are frightened of their peers, pathetic. CEOs are appointed, generally because they are seen as leaders and have drive and determination. I thought fear of peers was for the playground not the Boardroom.
2. LACK OF BOARD SUPPORT. I am a bit more sympathetic to this, but only a bit. CEOs are expected to provide strategic leadership and addressing issues of sustainability is highly strategic. CEOs need to spend time understanding the issues and gathering the evidence and then should be able to win the board around.
3. LACK OF INVESTOR SUPPORT. Again if I can quote the article “Even harder than changing the mind sets of their own directors is convincing shareholders of the need to stop their obsessive focus on short-term profits and consider long-term sustainability.” I found that most shareholders did have a relatively short term focus, maybe a year or two. However, I can also confirm what the article says about Unilever. “CEO Paul Polman has tried to get around this by actively seeking out investors who can take a longer view and asking them to invest in the company.” There are funds out there with a sustainable focus, probably over €15bn managed in the UK’s alone.
4. STASIS IN MIDDLE MANAGEMENT. The treacle layer of management is a well known phenomena but CEOs have to find ways around it. I used a blog posted on the Intranet to get my messages across to everyone. When pressure comes from above and below then things start to happen.
5. COMPLEXITY OF THE GLOBAL ECONOMIC SYSTEM.  It is true that even the leaders of large organisations can feel overwhelmed by the sheer scale of the global challenge. However, I don’t accept the premise that this means you don’t do anything. All change starts with action by small groups of people and the best time to start is always now.
6. LACK OF POLITICAL AND REGULATORY SUPPORT. Finally this is a reason I have some sympathy with. However, some companies seem to encourage an unhelpful regime as they think it suits their own short term agendas.

So I guess you can say that I don’t think the case for inactivity is, in any sense, made. The business case for embracing sustainability is strong but as the article says “It can feel very lonely if you are a CEO who recognises the need for system change, but we need to see courageous leadership” You can only lead if someone follows so if you know someone in the position of leadership who wants to make change happen then help them build unstoppable momentum. 

Turning Energy into Ecosystem. An Article from the New Statesman

What do we do about energy? It’s a question that politicians and policy makers ask regularly. How do we make sure we have enough, and that it’s cleaner, safer and more afford- able? How do we finance investment, and what about regulation, pricing and infrastructure? What technologies do we use, and what new energy sources do we prioritise? To frack, or not to frack? These and many other questions make energy a vast, complex subject with few straight- forward answers.

This is part of the problem. Energy’s complexity is driven by the way we think about it. We see the “energy ques- tion” as a list of dilemmas to answer, a series of challenges to be met; bits and pieces rather than a whole. Instead, we should think of it as an ecosystem – as a full and living picture with each part influencing the other. In nature’s eco- systems, water, air, plants and animals impact each other and survival depends on recognising this interdependence. This holds true for energy too: invest- ment, taxation, regulation, policy inter- vention, infrastructure, supply, demand, technology, consumers and producers are also parts of an interdependent system.

To encourage this eco-system ap- proach, this summer the Energy Institute (EI), the leading professional body dedi- cated to developing skills, knowledge and good practice within the energy in- dustry, brought together leading figures from our sector and from academia to consider how the energy system needs to be transformed. The event concluded with specific recommendations that provide precious consideration for

policy makers grappling with this subject. A central theme emerged: that peo- ple must be put at the heart of energy. Citizens, consumers and producers – the people that need it, provide access to it and also pay for it – should have a say in the way the system is shaped. A clear and honest discussion about the benefits and costs of changes would be a valuable ex- ercise. We need more education about the interrelationships between the various elements of the energy system and the

real world trade-offs the industry faces. The energy debate often focuses on international risks, at the expense of at- tention to national risks. What happens if Russia turns off the gas tap, for exam- ple? A silo mentality has historically per- vaded the energy industry, where policy

Planning for our energy future requires input from outside the sector, too

divisions between oil and gas, transport fuel, electricity, and heat production are commonplace. Isolated and fragmented policy interventions pose obstacles to market investment and project financ- ing. Integrated, long-term energy poli- cies are needed to break down these silos and allow energy and utility companies to plan for the long term with assured investment. If the lights go out in the UK, will it be the fault of UK policy or of global events?

Planning for a future energy system will also require the involvement of in- stitutions outside of the energy sector.

For example, more effective forecasting tools will be needed to design an inte- grated policy framework. Data is central to economic and social development, and energy is no different. Information must be collected, processed, analysed, stored and shared – and to do this successfully, data collection and storage institutions will have to play their part.

For example, we know that district heating systems are an efficient solution to domestic heat and power needs, and yet we still believe that every house has to have its own localised boiler.

We tend to focus on meeting energy demand efficiently, when we should be taking a step back and asking whether de- mand itself is for the best. The cheapest energy is the kind that is not consumed, and the cheapest power station is the one that doesn’t need to be built. With that in mind, when considering smart grids, demand-side management must be em- bedded from the beginning. We need to think about cities: they consume two thirds of energy and pose a key challenge around climate change. Cities can pro- mote green and resilient energy systems and adapt more rapidly than nations. But to do this, urban communities must be engaged, and heat, transport, electricity and other services need to be considered together in municipal planning.

The energy system is a vast single eco- system, not a series of silos. If we consid- er it in its entirety, we can implement the ideas, create the policies, and apply the regulations that will turn our many ques- tions into innovative answers. l 

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.