Ahead of a new report, the Association for Decentralised Energy’s Chief Strategic Advisor Joanne Wade, examines the role of the public sector in leading the energy transition to net-zero
The transition in our energy systems is about decarbonisation, decentralisation and democratisation. The public sector is naturally at the heart of this: it governs our democracy, it is decentralised, and it is setting itself targets for reaching net-zero.
This is why the public sector will be the subject of a new report by the Association of Decentralised Energy, due later this year, which will set out how the sector can and should capitalise on its ability to drive change.
Driving the net-zero transition
In 2019, the sector accounted for around 4% of total UK energy consumption. That may not sound like much, but that relatively small number hides a multitude of ways in which the sector has market power that it can and should use. When central government procures net-zero energy refurbishment of its buildings, it is helping to grow the supply chains that can deliver this. When a hospital contracts for energy services that combine a new, low-carbon energy centre with improved energy efficiency, it sends a signal to the market that these things are in demand. When a university offers buildings on its campus as baseload for a heat network it helps to provide the certainty that sufficiently de-risks the investment.
The sector’s market power extends out beyond its own use of energy. Total public sector spending accounts for around 40% of GDP. About a quarter of this is cash transfers via the welfare system, but this still leaves us with spending of around 30% of GDP that is directly within the control of the public sector. If all capital investment was assessed to make sure it was consistent with the transition to net-zero; if all employment in the public sector included engagement and training to improve carbon literacy; and if all goods and services procured by the sector were bought from suppliers who were committed to the transition, a very large portion of the economy would be moving in the right direction.
Today’s spending can help to build markets for known low carbon technologies and services, and today’s capital investment can ensure that we have the right infrastructure for a net-zero future. And the public sector can also play a part in supporting innovation, be that in the development of nascent elements of the smart energy system, or in the specification of vehicles of the future. Could public sector organisations work with their local Distribution Network Operators, to understand better how they could offer flexibility services that help avoid the need for network reinforcement and hence reduce the cost of energy for everyone in the local area? Could local councils who are committed to decarbonising their vehicle fleets club together as a buyer group and use Forward Commitment Procurement to drive the development of zero-carbon waste collection vehicles?
The role of the public sector
Public sector organisations should also be acting as exemplars and facilitators, making sure that everyone knows what can be achieved and knows how it can be done. Being an exemplar means not only making the changes that should be made, but also telling others what has been achieved and how. Schools can help one another, as they do in Ashden’s ‘Let’s Go Zero’ campaign; local government can help businesses and the community in a local area, as Islington Council does with their Sustainable Energy Partnership. Change in the public sector needs to be at the heart of persuading everyone that, together, we can achieve this transition.
There are many ways in which the public sector is vital in facilitating change for everyone: a new energy system is only possible if the infrastructures that shape our everyday lives enable us to be net-zero. National and local government must make sure that the planning system encourages building refurbishment, heat networks and heat pumps, rather than put barriers in their way; hospitals and leisure centres should actively seek to be base heat loads for new heat networks; metropolitan transport authorities should focus their investment on the streetscapes that are needed to encourage active travel.
That’s a lot of ‘should’ and ‘must’. But this transition can be about doing what is best for public sector organisations, and this is not only about avoiding the worst impacts of global heating. Greater energy efficiency and demand flexibility in the public sector means lower energy costs, which, in turn, means more money to spend on delivering core services. Better buildings and more active travel in the public sector means a happier and healthier workforce, which, in turn, means a more productive workforce. A university at the heart of a smart local energy system demonstrator project is a university with significant potential for innovative research. Investment in local, low carbon energy supply infrastructure means more good jobs for local workers, supporting the development of a vibrant, green local economy.
The sustainable energy system of tomorrow underpins all the pillars of our Industrial Strategy. The current challenges we face, as we aim to recover from the COVID pandemic, only reinforce the need to address the Grand Challenges in that strategy. And they reinforce the central place of a sustainable energy system. As the examples here show, public sector action is vital to ensure that we rise to the challenge.
The urgent need for change
Every public sector organisation can contribute, leading by example. Those tasked with governance must also ensure that the conditions are right for all of us to make the right choices: that energy and other infrastructure supports low carbon living; that financiers back net-zero options; that low carbon innovators can flourish. The need for change is urgent, and a step up in public sector action can help to deliver the pace we need.
Please note: This is a commercial profile
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