2022 has seen the price of energy dominate the news, as many grapple with the rising cost of living. How do we make sure Net Zero plans succeed and the switch to renewable energy supports Londoners instead of leaving them behind? Energy for London Director and Chair of Community Energy London Syed Ahmed OBE has the answers.
The past year has seen energy and climate in the news as never before.
Questions about how we deliver a Net Zero energy system have now suddenly crashed into very real concerns about the cost of energy and security of energy supply, both of which will focus politicians minds for some time to come.
This has in turn led to accusations, from some quarters, that it is solely the shift to renewables that has led to the UK being so vulnerable to energy price hikes. A greener energy system has its costs, however it is clear that the global demand for natural gas as economies emerge from the pandemic has been the real driver. This has now been exacerbated by the tragedy that is unfolding in Ukraine. The UK is not alone in feeling these price impacts – they are leading to challenges for all economies across the globe.
As long as the UK is a major user and importer of natural gas we will be sensitive to such price spikes. So – in the context of London – what options are open to us to both achieve the capital’s Net Zero ambitions – as well as helping ensure that Londoners can ride out future energy price shocks?
A key area to be addressed is the decarbonisation of heat supplies. The vast majority of the capital’s buildings are heated via individual gas boilers, and to a lesser extent, connected to gas-fired communal heating schemes. The remainder are mostly heated with electric storage heaters (radiators with ceramic bricks inside that are heated overnight on a cheaper Economy 7 electricity tariff, and then can be controlled to release heat during the day).
The Government set out its future policy direction in this area in its October 2021 Heat and Buildings Strategy (HABS), which proposes a switch from the use of gas boilers to the greater deployment of options such as heat pumps, district heat networks, to greening the gas grid by increasing production of biomethane from anaerobic digestion, to an ambition that potentially significant flows of hydrogen will be become available over the coming decades.
A number of thoughts arise:
- Whichever routes are adopted by Government to decarbonise heating – in all instances – there needs to be a much greater focus on reducing energy demand first through energy efficiency. Whilst the HABS references the need for a ‘fabric first’ approach, it fails to address how to reduce energy consumption of our homes and businesses. Hence, a long term and comprehensive programme on improving the energy efficiency of our existing buildings, to help reduce demand, needs to be set out by Government as soon as possible.
- It is good to see that industry has already set out what such a plan should look like, through the Construction Leadership Council’s National Retrofit Strategy. And in London a Retrofit London Housing Plan was released in October 2021 – and London Councils and the Mayor are continuing this discussion through a joint Summit on 22 February 2022 to look how to introduce measures to ensure wide scale retrofit homes and workplaces.
- We also need to increase the amount of energy data and granularity of detail per home and neighbourhood to ensure we get the right heating and energy efficiency solution in place. This is highly relevant to London, with its broad mix of building-types, including significant numbers of buildings in conservation areas. A transition to Net Zero cannot be delivered by a centralised ‘command and control’ system, but requires the knowledge and action of local government – something the BEIS Select Committee’s Decarbonising Heat study also recently stated. Government therefore needs to place greater responsibility for achieving the Net Zero buildings-goal onto Mayors and councils – transferring over greater regulatory control of policies and the budgets to enable this to happen.
- The shift to greater electrification for heating – and as luck would have it, also transport at the same time – will require greater flows of electricity through the local electricity network. UK Power Networks published their five year Business Plan in December 2021, stating our networks will need to be smarter, innovative and more flexible to help manage these flows. Their plan also highlights that “there is a common appreciation that we will need to move towards greater electrification of heat, the pace and scale of this change is far from clear. We currently have some 27,000 Heat Pump installations across our region, but we forecast the number of installations could grow to anywhere between 150,000 (an annual growth rate of 33%) and 440,000 (an annual growth rate of 59%) by the end of the RIIO-ED2 period. Similarly, the impact of energy efficiency and smart tariffs on peak demand on our networks is not certain.” In contrast the scenario modelling undertaken for the Mayor’s recent Pathways to Net Zero Carbon suggests that up to 2.2 million heat pumps may need to be in place in London by 2030. There remains considerable uncertainty at the present time about how much new technology will be added to our electricity network to support the shift to electrification. To support the transition there needs to be closer collaboration between energy network providers, local government and also, critically, end consumers to understand what the most appropriate solution to install should be.
- Finally, how can London meet more of its own electricity needs? The capital will continue to ‘import’ the vast majority of its power needs from generation plants outside the city (currently at 90%). Reducing electricity-demand needs to be the first plan of action – however there are also opportunities to add new capacity here in London. The Mayor’s Pathway report points to an approximate 10-fold increase in solar capacity, to 1.5GW, by the end of this decade. London’s food waste can support the production of biogas and biomethane. Stationary batteries and Electric Vehicles (EVs) can store power from the grid and release it when needed. Demand Side Response (DSR) tariffs can send price signals to consumers to reduce consumption during peak periods.
The pathway to greater electrification is going to be a huge challenge for London – but supplying the capital’s hunger for energy has always required huge efforts. However, the shift now underway to a more decentralised energy system provides opportunities for London to be become more self-sufficient for its energy needs, deliver a cleaner and greener energy system, and if we do it right, a more affordable and resilient one as well. Let’s go.
Syed Ahmed OBE is Director of Energy for London, an independent research and campaigning organisation working for London to be a low carbon city, and Chair of the community energy group Repowering London. He has over 20 years working in the sustainable energy industry, including time seconded in government, and was awarded an OBE in January 2022.