IPCC Report: Political will essential to deliver on 1.5C Paris target

Today’s stark report on the devastating impacts of climate change should make us all sit up and commit to urgent action.

Politicians need to do the right thing and we must make them, including ensuring a fair and just transition to a zero carbon future.

The warning from the UN Intergovernmental Panel on Climate Change (IPCC) makes it very clear that without urgent and unprecedented changes to energy, transport and land use, the world risks catastrophic temperature rise.

The Guardian report said today: “The world’s leading climate scientists have warned there is only a dozen years for global warming to be kept to a maximum of 1.5C, beyond which even half a degree will significantly worsen the risks of drought, floods, extreme heat and poverty for hundreds of millions of people.”

The good news is that the scientists – including the head of Scotland’s new Just Transition Commission - believe it is affordable and feasible to keep to the 1.5C Paris Agreement target, but they point to the need for political will to make sure that policies are put in place in time.

Top priority in Scotland must be to strengthen the climate change Bill currently going through the Scottish Parliament to a target of net zero greenhouse gas emissions by 2050 at the latest, with 77% by 2030.

It’s good that the Scottish Government will now seek new advice on meeting 1.5C from the UK Committee on Climate Change (CCC), but it’s clear from the IPCC report and the recent CCC report on Scottish progress that we must have a step change in cutting emissions, particularly in transport and agriculture.

UNISON wants to see massive investment in public transport, including renationalisation of rail and reregulation of buses, as part of the move to greener transport - and much greater public ownership of energy, including municipal energy.

We are campaigning with the Stop Climate Chaos Scotland coalition and the Just Transition Partnership (JTP) to strengthen the Climate Change (Emissions Reduction Targets) (Scotland) Bill.

As well as stronger targets, we want Scotland’s new Just Transition Commission to be set in statute in the Bill and to report to Parliament on progress.

The JTP welcomed Environment Secretary Roseanna Cunningham’s appointment last month of Professor Jim Skea as Chair of the Commission.

Dave Moxham, Deputy General Secretary of the STUC and co-chair of the Just Transition Partnership, stressed that Scotland’s trade unions see tackling climate change as a moral, social and economic imperative. However, in meeting emissions reduction targets, we must ensure a just transition for the workforce and communities which currently extract or depend on the use of fossil fuels.

Just transition includes both measures to support retraining and new jobs for those in affected industries, with support for workers and communities, and measures to produce new, green and decent jobs and livelihoods as well as healthy communities. It aims to address environmental, social and economic issues together.

There are clear economic opportunities if we are ahead of the game in building a greener future, but we must ensure no-one is left behind and so climate plans must be integrated with an industrial strategy.

Professor Skea, is co-chair of the working group behind today’s IPCC report. His comments today are reported in the Guardian:

“We have presented governments with pretty hard choices. We have pointed out the enormous benefits of keeping to 1.5C, and also the unprecedented shift in energy systems and transport that would be needed to achieve that.

“We show it can be done within laws of physics and chemistry. Then the final tick box is political will. We cannot answer that. Only our audience can – and that is the governments that receive it.”

That’s where we all come in. There are no jobs on a dead planet.

Let’s make sure Scotland’s politicians continue the unanimous commitment in 2009 of support for world leading legislation. We need them now to agree stronger targets and decisive policy action to protect the planet for future generations, with public sector action crucial in leading the way.

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Welcome energy decisions, but we must be bolder

There is no shortage of activity on energy policy and we haven’t even heard the outcome of the Scottish Government’s energy strategy consultation.

Let’s start with fracking. The Scottish Government has announced that the existing moratorium would continue ‘indefinitely’, which is an effective ban given their planning powers. This follows a similar ban on underground coal gasification. It will be the subject of a vote in the Scottish Parliament, but that should be a formality, as only the Tories support fracking. 

Claudia Beamish MSP still has her members bill which would put in place a stronger legislative ban. The problem with using planning powers is that the moratorium could be overturned very easily, unlike legislation. I suspect the government has decided to go down the moratorium route to avoid compensation claims from INEOS, who now have drilling licences that they can’t use. However, as the minister said, fracking, “cannot and will not take place in Scotland” - and that is the practical effect.

The overwhelming majority of people in Scotland will welcome this decision. A staggering 99% of the 60,000 respondents to the consultation supported a ban. Apart from INEOS, we had a grand rant from Jim Sillars, who claimed that people didn’t know about the consultation. Well, 60,000 respondents would indicate that claim is mince, not to mention the noise campaign groups having been making on the issue. Jim also expects trade unions to put pressure on the government to rethink the ban at the STUC. I wouldn’t hold your breath on that Jim, most unions are opposed to fracking. 

And you won’t win us over with nonsense claims about how fracking will end fuel poverty. Scotland’s geology means so little fracked gas could be extracted that its use would be for industrial, not domestic heating. Even if it could be extracted in any quantity, the cost would be prohibitive. That is why the investment is drying up for drilling in England and the companies are going to the UK Government with their begging bowl.

The next big announcement by the FM was the establishment of a state owned national energy company. Details on this are a bit scarce, but the announcement points, at least initially, to a retail operation. This is not exactly an original idea, with operations like Robin Hood Energy in Nottingham, Our Power Energy run by housing associations and the People’s Energy Company based in Musselburgh. 

A national energy company is something UNISON supported in its response to the energy strategy consultation. However, we envisaged a more radical option that involves generation and transmission as well as retail. We also support a big role for municipal energy - generating electricity, managing distribution grids, running energy efficiency schemes as well as retail sales. This is very common across Europe and seriously challenges the ownership model in Scotland, something the Scottish Government has been unwilling to do. The big energy companies’ reaction to the announcement last week, indicates that some modest retail competition doesn’t worry them very much. 

The UK Government’s stop-start efforts to introduce a price cap on energy bills, has once more run into trouble. The minister claimed the cap would be in place this winter, a suggestion that was promptly contradicted by Ofgem. The legislation could take a year and then many months more for Ofgem to implement it. Shambles doesn’t even begin to describe this. 

All the usual suspects have been dragged out to tell us how wonderful the market is - all we need to do is get into switching supplier. Meanwhile, in the real-world consumers are increasingly supporting real public ownership options as set out the Labour manifesto. The TUC joined that call at its recent Congress, unanimously backing a motion that supports returning the energy sector to public ownership and democratic control. The motion also called for a mass programme of energy conservation and efficiency, a just transition strategy and investigating the long-term risks to pension funds from investment in fossil fuels.

The last few weeks have seen some important energy policy decisions that could help reshape our energy strategy. However, that will only happen if we are bolder and resist tinkering around the edges.

Action on energy prices is another damp squib

As widely predicted, UK government action on energy bills has turned out to be another damp squib. Ministers passed the buck yet again to Ofgem who have published plans for a ‘fairer and more competitive’ market. As if we haven’t heard that before! 

As the Editor of Utility Week put it: “If the government is convinced that an absolute energy price cap for 17 million UK households is both expedient and desirable, it should take responsibility for delivering it – and sooner rather than later. The industry is not going to tie a noose around its own neck.”

Despite the abundance of energy supply in the UK, we still pay more than the European average. This Ofgem infographic shows how energy bills are broken down.

We are told the solution is more switching in an allegedly competitive market. However, there has been a warning that more small energy firms could go bust this winter because of increasing price volatility. David Bird of Co-operative Energy said that the regulator needed to set financial stress tests for new market entrants, to reduce the risk of firms folding and customers being left in the lurch.

On a more positive note it looks as if there may be some action on charges for pre-payment meters. 

Santander has recently highlighted how much of our declining pay packets go on largely unavoidable household bills. It looked at bills for gas, electricity, water, etc – and found they have risen far ahead of average wage rises. Since 2006, average pay packets in Britain have gone up by 19%, while the average gas bill has risen by 73% and electricity by 72%.

These are very large real rises, and all the grimmer for families and pensioners on very tight budgets – not to mention public sector workers suffering years of pay restraint. These are must pay bills that leave families with harsh choices about what to cut elsewhere.

This bitter pill is made all the less easy to swallow when the boss of one of Scotland’s biggest energy companies has been given a 72% pay rise, soon after arguing against consumers having their bills capped to save them £100 a year. The company also increased the price of its standard variable tariff by 6.9%.

Alistair Phillips-Davies, the chief executive of SSE will be paid £2.92m in 2017 after receiving the maximum possible bonuses for leading a “robust performance” by the supplier last year. The pay rise is even bigger than the 40% rise awarded to the chief executive of the Scottish Gas owner, Centrica.

Former energy minister Brian Wilson is not as convinced as the First Minister that ScottishPower is “an exemplar to our world-leading energy sector” as she opened their new HQ in Glasgow. He argues: “Such testimonials should be tested rather than asserted. Neither ScottishPower nor SSE have built a single power station since privatisation. Scotland has been turned from exporter of electricity to importer. These companies have been the biggest beneficiaries of onshore wind subsidies – without building a single turbine in Scotland. I’m not sure that is such an “exemplar” record, even leaving aside what customers think of them.”

Then we can add energy networks into the mix. They have been accused of exploiting consumers to enjoy a £7.5bn windfall of unjustified “sky high” profits.  Citizen’s Advice reckon the companies that transmit electricity and gas around the UK, including National Grid, were reaping average profit margins of 19% from their monopolies. That compares with the 4% margin that big six suppliers make selling power and gas to householders. They have called for a one-off £285 rebate to every household. Don’t hold your breath on this one, but the companies can expect a tougher price controls next time around.

In a useful analysis of the issues the HofC library argues that the key issue for Parliament will be how to make consumer markets such as energy work effectively. Can consumers be encouraged to find the best deal or does Government need to be more active? 

The simple truth is that markets have failed, not least because consumers have better things to do than spend hours battling the complexity of energy pricing. Government intervention is long overdue.

Draft Scottish Energy Strategy

The Scottish Government has set a 50% renewable energy target in its new draft energy strategy.

The consultation paper highlights the huge huge shifts in electricity generation in recent years, following the closure of Longannet. There has been a big increase in new supply of renewable electricity.  However, that leaves Scotland with a different kind of energy challenge; one where heat and transport take on even greater significance than electricity. 

Choices about the local supply and consumption of energy are broadening, and the patterns of energy use are also changing.  There are opportunities to shape Scotland’s future energy system, and to help tackle the challenges of climate change, affordability of energy, and the efficiency of energy use.

In parliament this afternoon the energy minister, Paul Wheelhouse said: 

"To maintain momentum, a new 2030 all energy renewables target is proposed in our energy strategy, setting an ambitious challenge to deliver the equivalent of half of Scotland's energy requirements for heat, transport and electricity from renewable energy sources. I hope that members will welcome this landmark proposal given the support shown for such an ambition last month in this chamber during the debate on support for Scotland's renewables sector."

The plan aims to deliver:

• a modern, integrated, clean energy system, delivering reliable energy supplies at an affordable price, in a market that treats all consumers fairly; and 
• a strong, low carbon economy – sharing the benefits across our communities, reducing social inequalities and creating a vibrant climate for innovation, investment and high value jobs. 

The ‘whole system’ view seeks to describe where Scotland’s energy comes from and how it is used. Energy efficiency is to be the cornerstone of this through the SEEP programme.

The ‘stable transition’ is driven by the need to further decarbonise the energy system, in line with emissions reduction targets. However, this still involves a ‘strong oil and gas sector’ and a commitment to support carbon capture. That will be challenging given that the UK government made a complete hash of pilot schemes, as highlighted by the National Audit Office recently.

The ‘smarter model of local energy provision’ means moving away from central provision to local innovation. There is considerable opportunity to create decentralised or distributed energy systems, but progress so far has been pretty slow in real community ownership. 35% of Scotland’s electricity generation still comes from our two nuclear power plants. 

The strategy repeats the commitment explore the potential to create a government owned energy company (GOEC) to help the growth of local and community projects – although still no detail. This will include empowering communities to use the income from energy development to support other communities develop their energy potential. They will also explore the creation of a Scottish Renewable Energy bond in order to allow savers to invest in and support Scotland’s renewable energy sector. 

It is important to emphasise that this is an energy strategy, not just an electricity generation plan. So heat and transport use are also important issues.

On jobs, the paper claims the renewable energy industry employs 14,000 people, with up to 43,000 in the wider low carbon and renewable energy economy. To put that in context, 125,000 are employed in oil and gas production.

There is a separate consultation published today on unconventional gas (fracking), so no decision. The paper places considerable emphasis on new energy sources and it is very difficult to see how dirty fuel from fracking fits into this strategy.

Overall, the ambition in the strategy will certainly be welcomed, although there will be some concern that the new strategy is no clearer than the old one on how it will be achieved. In particular, there is no detailed breakdown of what the future energy mix will actually be. Much of Scotland’s energy policy also remains reserved, and the strategy, predictably, if largely fairly, highlights a number of damaging decisions.

There will be a four month consultation closing on 30 May 2017.

Tackling fuel poverty

There has been a welcome drop in the number of households in fuel poverty in Scotland. However, it’s still a long way from the eradication that was supposed to happen this year and still higher than the first year statistics were collected in 1996.

 

Some key points from the report:

 

• Between 2014 and 2015 the rate of fuel poverty declined by 4%. In 2015 there were around 748,000 fuel poor households representing 30.7% of all households. 

 

• Around 203,000 households, or 8.3% were living in extreme fuel poverty in 2015.

 

• Just over half of the reduction in fuel poverty rates can be attributed to the drop in energy prices and around a third to improvements in energy efficiency

 

• On average the private and the social housing sector have similar rates of fuel poverty: 30 and 33% respectively. There is more noticeable decline in fuel poverty in the social sector, reducing the social-private gap which was seen in the SHCS sample for 2014.
   
• In 2015 37% of Scottish homes were in EPC band C or better and half had an energy efficiency rating of 65 or higher (SAP 2012). This is similar to 2014.

 

Norman Kerr, Director of Energy Action Scotland said:

 

“Just last month the statutory duty under the Housing (Scotland) Act 2001 for the Scottish Government to eradicate fuel poverty expired and the target was missed.  Two working groups were tasked to advise Scottish Ministers on their next steps and they have made over 100 recommendations.  It is now vital that the Scottish Government uses this advice to develop a new strategy, set a new fuel poverty target and increase funding for its programmes in the upcoming Budget Statement. The progress to date on solving the problem of cold, damp and unaffordable to heat homes must not be lost, but can and should be built upon.”

 

With energy prices remaining relatively low, spending on energy efficiency remains an important element of a fuel poverty strategy. Twenty businesses have written a letter, with the backing of the Existing Homes Alliance, calling on ministers to increase spending on energy efficiency in next year’s budget to £190m. They say this would allow for existing schemes to be expanded and provide confidence to the sector at the start of the new Scotland’s Energy Efficiency Programme (SEEP).In the longer term, the alliance wants spending to be ramped up to an average of £450m a year over ten years.

Another measure that would help with eliminating fuel poverty is ending the price differential between pre-payment meters and direct debit. Prepayment customers represent just 15% of the domestic market, but account for over 30% of all fuel poor households.

 

A recent UK analysis shows that removing the price disparity between tariffs could lift between 95,000 (12%) and 181,000 (23%) of fuel poor prepayment customers out of fuel poverty and reduce the gap for the remainder.  The widespread adoption of SMETS2 smart prepayment meters (Smart PPM) could deliver real competition in the prepayment market, driving down prices towards parity with direct debit payment. 

 

The reduction in fuel poverty in Scotland is welcome, but there is still much to do when nearly a third of households remain in fuel poverty. This is the time to develop a new strategy and invest in energy efficiency.

We need a clean energy future - not fracking

A busy week for the fracking debate in Scotland, but a decision still looks some way off.

There was some speculation ahead of today's publication of the research sponsored by the Scottish Government that the minister would announce a bill on fracking. Instead he announced a public consultation will be launched in January, before any decision is made on whether to allow fracking. At the same time, the government will publish its climate change plan and a full strategic environmental assessment. In the meantime the moratorium remains in place.

The independent research published today covers the following issues in relation to UOG:

Public health impacts

Economic impacts

Climate change impacts

Understanding and monitoring induced seismic activity

Understanding and mitigating community level impacts from transportation

Decommissioning, site restoration and aftercare.

The Minister for Business, Innovation and Energy Paul Wheelhouse said: “The extensive package of research published today will ensure the public has access to a comprehensive evidence base on the potential health, economic and environment impacts of UOG."

FoE head of campaigns Mary Church said: "The economic case for pursuing an unconventional gas industry in Scotland simply doesn't stand up, while the risks of doing so could be utterly devastating for communities and the environment. No state has had a moratorium on fracking, looked at the evidence and decided it's a good idea."

These are initial reactions and it will take all the interested parties some time to digest this research. Meanwhile, other studies will add to concerns over fracking. In particular, a report in TheFerret highlights a new study by scientists at Yale University that indicates chemical contamination from the fracking industry could increase the risk of childhood leukaemia.

Scottish Labour is keeping up the pressure on the Scottish Government by lodging a Holyrood member's bill aiming to "change the law to ban fracking in Scotland". Labour MSP Claudia Beamish has launched a public consultation as part of her bid to have fracking banned in Scotland. This follows a vote in the Scottish Parliament last June, in favour of an outright ban. 

Her Bill has a focus on the climate change implications of fracking. She said: "Scotland relying on fracking for our energy needs will lock us into an energy infrastructure based on fossil fuels long after our country needs to have moved to clean energy. SNP ministers now face an urgent choice - they can work with Labour to ban fracking, or they can work with the Tories to allow drilling under family homes in parts of central Scotland."

Climate change is certainly the right focus for a fracking ban. For me there are three key arguments against lifting the moratorium.

Firstly, we rightly follow the precautionary principle in terms of safety. Something our industrial heritage has taught us - just ask anyone suffering from asbestosis or other industrial diseases. Fracking in the wide open spaces of the USA has highlighted significant safety concerns. In Scotland fracking will take place under people's homes in a densely populated area.

Secondly, there is considerable doubt that gas from fracking is even economically viable. Many experts doubted the financial case, even before the falling price of gas. As for jobs, well, we have seen fanciful claims for other energy sources and few have delivered what was promised.

Thirdly, we don't need it. We should not compromise Scotland's climate change targets, or the UK's broader commitment to limiting global climate change to two degrees. Scotland should be leading the world in moving to clean renewable power, not aiming to extract ever more inaccessible fossil fuels. The risk is that shale gas doesn't just replace imported gas - it replaces renewables.

The third reason alone is reason enough to ban fracking in Scotland. Launching a consultation alongside the climate action plan is therefore a helpful juxtaposition. At the very least the Scottish Government's position is significantly less gung-ho than the UK government. However, an outright ban is now the way ahead, so we can concentrate on a clean energy future.

Municipal Energy - Time for radical action

Despite the best efforts of successive governments to create an energy market, it remains notoriously uncompetitive. In Europe, municipal energy is commonplace and growing - we should do the same in Scotland.

 

The so called market is dominated by the big six utility companies, whose pricing practices have been criticised by the competition watchdog. Consumer trust in the market is low and they are reluctant to switch suppliers for a better deal given the hassle of switching. In fairness, the Big Six are often unfairly criticised and new entrants have been guilty of some pretty poor practices as well. The fault is in the system.

 

The IPPR, has made a convincing case for local authorities to set up municipally-owned energy companies that can supply electricity and gas at competitive prices and don’t have to distribute profits to private shareholders. By targeting those on low incomes, they can also help tackle fuel poverty. The local authority “brand” may also encourage otherwise reluctant low-income households to switch suppliers and save money. Nottingham and Bristol have followed this model and London, under a new Labour Mayor, looks likely to follow.

 

In Scotland a slightly different model is being adopted. Our Power is a community benefit society established and owned by a number of local authorities and housing associations. It too aims to tackle fuel poverty through the supply of affordable energy, focusing on social housing tenants, and seeks to buy a minimum of 30% of its energy from renewable sources. The Scottish Government is also at least considering setting up its own energy company, although details are limited.

 

The problem with these models is that they are simply playing the failed market and are relying on the same wholesalers. An alternative approach is for councils to establish genuine energy companies that generate renewable electricity and help households to install energy efficiency measures, funded from the long-term savings in their energy bills.

The APSE research paper, 'Municipal Energy: Ensuring councils plan, manage and deliver on local energy’, found that:

• For every £1 invested in renewable energy schemes there is a further £2.90 in cashable benefits
• 17 jobs can be created from every £1 million in energy saving measures on building
• Energy efficiency and renewable energy can create 10 times more jobs per unit of electricity generated than fossil fuels
• The local government sector annual energy bill of £750 million could be reduced by up to half by leveraging in spending power and using readily available and low cost technologies existing buildings.

Fife Council has done some of this with its £1.3 million turbine at the council’s recycling and resource recovery facility near Ladybank. This is expected to generate enough electricity to power 200 homes. They also generate clean energy from garden and food waste at the council's anaerobic digester and from landfill gas. Aberdeen has similar projects as well as the city's district heating scheme. A number of councils use solar photovoltaic panels.

 

Glasgow City Council is in the process of setting up an energy services company which will oversee the creation of renewables and low carbon projects in the city. It has mapped sites, but progress has been slow.

 

A more radical plan for the city has been proposed by Jim Metcalfe, based on research carried out by the Energy Saving Trust. This would involve the creation of a locally-owned company which would be able to reinvest profits from power generation on improving building insulation and reducing fuel poverty. The council should be leading on this, using council bonds, available at historically low levels, to finance the plan.

 

While electricity generation is important, we also need to make progress on heating homes. This is where district heating schemes come in. The Energy and Climate Change Select Committee heard in January that the £300 million government scheme to develop district heat projects needs a “regulatory investment framework” during this parliament to support future growth. District heating is a 50-80 year long investment and so you want to attract the lowest possible cost of capital to ensure the lowest cost for consumers. Councils are again in the best position to do this. In Scotland, work has begun on tapping into geo-thermal heat from disused mine workings.

Governments could help more by making energy efficiency a national infrastructure project. In Norway, the introduction of legislation to support district heating has shown a 150% increase in the installed capacity over the last 10 years. This has helped make it possible for the city of Drammen to create a district heating network that supplies several thousand homes and businesses with clean, affordable heat. This system didn’t rely on Scandinavian engineering, but the expertise of Glasgow-based Star Renewables.

 

There are a number of interesting municipal energy projects in Scotland and the rest of the U.K. However, they are patchy, small scale and not nearly radical enough. We need councils to take the lead, establishing full scale energy companies that can provide energy efficient homes with cheaper electricity and heat. They would also generate desperately needed revenues.

This would be municipal enterprise of the sort councils in the 19th Century created to revitalise our towns and cities. We now need 21st Century municipal leadership to take this forward.

Future Energy Scenarios

Keeping the lights on at a reasonable price and meeting decarbonisation targets is a complex  business and not without controversy. 

The Future Energy Scenarios (FES), launched today, is National Grid's view of plausible and credible pathways to 2050. This drives planning and investment decisions in the system. It's also probably the best look at where the energy industry is going in the foreseeable future.

FES uses four scenarios to model changes to the edgy system. They start with the optimistic 'Gone Green' which assumes high prosperity and high green ambition, with carbon targets met through investment and innovation. Then 'Slow Progression' which assumes a still ambitious, but a less prosperous economy, with compromises on carbon targets and less investment. Next is 'Consumer Power', still a prosperous economy but one driven by consumer desire for innovation, with high levels of distributed generation and storage. The worst scenario is 'No Progression' in which business as usual prevails with low growth and limited innovation.

Scenarios are not about predicting the future. Just as well, because the track record of energy scenarios since the 1970's is not great. They are about giving us some numbers under different economic and policy circumstances. More a planning tool than a crystal ball.

Given past forecasts, it is surprising that all the scenarios now assume a continued reduction in electricity demand until around 2025. Partly due to the slow climb out of recession, but also due to more efficient appliances and the collapse of heavy industry. However, demand starts to rise again under the more prosperous scenarios. Gas demand, after an initial fall, looks likely to maintain a significant part of the mix. The prosperous scenarios assume moving away from carbon intensive sources and/or more local generation.

There is a little more regional analysis this year, something National Grid is weak on. They map the regional sources of generation and identify some regional differences in demand.

The key message for me from this year's FES is that energy supply is becoming increasingly diverse. Fossil fuels will continue to decline with an extra 5GW closing by 2016. Potentially 18GW of additional storage could be available by 2040. The constraints appear to be more market and regulatory than technological, although this is still more about short term storage than addressing seasonal imbalances. They assume a big increase in imported electricity and gas, from 4GW at present to 23GW by 2040. 54% of gas could come from alternative sources by 2040, including shale, biomethane and bio-substitute natural gas.

More action is needed in the next decade if the UK is too achieve the 2050 carbon reduction target.  None of the scenarios indicate that the UK will meet the 2020 target of 15% of energy coming from renewable sources. Progress is reliant on key technologies, nuclear, renewables and CCS. It can be done without one of these, but becomes more challenging. In practice two of them are looking dodgy and renewables suffer from investor uncertainty. However, it is heating and transport that needs to do much more.

Gas is seen as vital to facilitate decarbonisation. It's flexibility can be used to balance the system and they assume there will be 11GW of CCS enabled gas plant by 2040. It will still be important in heating homes, with 70% of households still using gas in 2030. Hopefully district heating will play a bigger role, although heat pump take up so far is slower than anticipated. While shale gas has been delayed, they are still assuming it will play an important role, in particular under the consumer power scenario. The was some scepticism about this amongst today's audience, many of whom doubt the economic viability, never mind political and environmental factors.

With the greatest minds in the energy industry present at the conference, only a handful, on a show of hands, thought we would meet 2050 decarbonisation targets! That doesn't mean it isn't desirable, but it does reflect scepticism about government taking the necessary actions. It certainly looks challenging. National Grid are rightly also concerned about security of supply and keeping energy bills down, so balancing objectives is an additional complexity.

The external speaker, Professor Jim Watson, emphasised the importance of doing more on energy efficiency, something we should be aware of in Scotland as we will miss the statutory fuel poverty elimination target this year. He was also not convinced that shale gas will be economically viable or the case for gas bridging the gap on carbon reduction. Relying on CCS when the UK government has pulled the plug on funding seems pretty optimistic as well. He also made the important point that we need to look more carefully at the distributional impact of scenarios on different income groups. National Grid can be a bit fixated on technology rather than people.

Some wonder if there is a disconnect between the scenarios and the market mechanisms that will be needed to deliver them - my own view is that they never will. National Grid take the view that they will change to meet demand. Unsurprisingly, they are not keen on an independent system operator as recommended by the Commons Energy Committee. They don't think there is a significant conflict of interest, or if there is, they can manage them. They claim their scenarios are not driven by commercial interest of National Grid, but they do use them for their business planning.

The elephant in the room today was of course Brexit. How it will impact on the energy industry depends on your view of the economic and political impact of leaving the EU. If you think it will mean lower/higher growth and less/more green ambition, then this will impact on the energy scenarios. In particular, the big assumptions of additional electricity import capacity may depend on staying in the EU energy system. With the U.K. voice gone from the table, it remains to be seen what impact that will have on EU policy. Maybe less market oriented?

While some of the assumptions made in FES may be controversial, it remains the the most comprehensive study of future energy planning for the UK. There is lots of detail in the documents that can downloaded. Perhaps one to dip into, rather than a bedtime read!

Power to the People

Local energy production offers some real opportunities for local authorities to raise much needed finance, to improve the lives of citizens through lower energy costs and to meet climate change targets. Lots of municipal authorities round the world are moving back into energy supply. The IPPR’s new report City Energy lays out recommendations to encourage and support UK authorities down this road. The report focuses on engaging in the energy supply market and raising finance for investment in low carbon infrastructure particular for generation.

Britain’s energy crisis
• Low income consumers are being overcharged
• Crisis of trust in energy companies
• Green finance gap
• UK economy is not benefiting from low-carbon subsidies
• Local energy generation is being held back
Cities account for two thirds of the world’s energy consumption and 70% of global CO2 emissions. Local authorities are well placed to make a substantial impact on the above challenges through producing and selling electricity to their citizens. Munich has a target to supply the whole municipality of one million people with renewable electricity by 2025 and have invested €900m in renewable projects. Energy production offers a much needed source of finance for local authorities in the long term.
Some of Britain’s cities are already have an innovative role in our energy market and local authority pension funds are investing in low carbon projects: Lancashire’s County Pension Fund has committed £200m to low carbon projects. Aberdeen is planning to use hydrogen as a vehicle fuel source which is produced by excess power from offshore wind farms. Bristol has a city solar project where local communities groups can invest in solar installations on council premises.
Business model options for cities
Fully licensed supplier: city authority sets up and delivers electricity Nottingham is pursuing this option
Joint venture: city authority works with third parties to set up and run an independent supplier
Licence lite: city authority becomes junior supplier taking responsibility for some aspects of supply and licensing while senior supplier deals with the rest GLA going down this road
Partnership: city authority works with existing supplier
White label: city authority licences use of its brand to existing suppler who markets to customers in that area.
Potential impact
Done properly local authorities could keep its and citizen’s energy bills low, reduce carbon emissions and ensure energy security. Beyond that there is huge potential for creating and maintaining highly skilled jobs with the many benefits they bring to local economies.
Engaging in the energy supply and targeting low income households with improved tariffs local authorities could make a huge leap in reducing fuel poverty. The report offers three ways that local authorities could invest in carbon reduction: municipal bonds, pension funds and the Green Investment Bank
Key Recommendations:
• Cities should consider engaging in the energy supply market where this promotes local generation and tackling energy affordability
• Cities should explore opportunities for investing in low carbon energy developments through municipal bonds, local authority pension funds and the Green Investment Bank
The report also calls for central government to
• Set up a local authority energy unit
• Encourage all pension funds to adopt the Principles for Responsible Investment
• Design fiscal rules to ensure capital debt from local authority bonds or green municipal bonds do not count against targets for cutting debt
• Give immediate borrowing powers to Green Investment Bank
The report also givens and up to date overview of what local authorities current role and the plans they are developing. Local energy production via city authorities has a substantial potential to improve lives and reduce carbon production. Hopefully we can see a rapid expansion of projects soon.

Putting the public back into Scotland's energy future

The case for public ownership in the Scottish energy industry is persuasively set out in the latest Reid Foundation publication, 'Repossessing the Future'. 

They argue that existing UK energy policy is failing and Scotland, under independence or greater devolution, needs a much greater level of state intervention and public participation. 

I covered similar ground in the energy chapter of the 'Red Paper on Scotland 2014' and at last weekend's Morning Star conference on public ownership.

They rightly point to the issue of ownership, something that has been given too little attention in the referendum debate. The UK and Scottish government's appear relaxed about our renewable developments being dominated by overseas owners and large companies. While fuel poverty is rising, large landowners are some of the largest gainers from the subsidy regime.

The report points to the Nordic social model of energy production "to emphasise the importance of policies framed around the common good and benefiting the ‘whole of society’ as opposed to private appropriation". These models engage local authorities and communities in energy generation, not just big business. However, a key element is control of the grid and the report makes the case for renationalisation. 

Finally, the report develops an alternative set of proposals for Scotland’s energy resources that prioritises long-term objectives and the common good (e.g. social justice over private profit). They suggest the following key principles:

resources should be commonly owned to benefit the whole of society rather than vested interests;

resources should be geared to social need rather than private economic return;

respecting the rights of future generations and the planet, resources should be used sustainably and geared towards tackling climate change and developing a post-carbon economy;

Scotland’s energy system should be planned by public bodies to achieve security of supply as a priority policy concern;

public policy should be informed by collective decision-making and public deliberation (rather than faux consultation).

While UNISON Scotland might disagree with aspects of the proposed energy policy, that is more about what you do with a new approach. The focus in this report is rightly on the importance of structures and they should put new forms of public ownership at the heart of Scotland's energy future.