Energy Capital event brings key energy innovators together

The global energy transition depends almost entirely on government, business, start-ups AND universities working together to create local markets and solutions for clean energy.

The ENERGY CAPITAL CONFERENCE in Birmingham, UK, on the 27th November 2018 was all about understanding how these different energy players can collaborate more effectively to bring clean energy forward more quickly in the UK – and the rest of the world.

The event was hosted by Energy Capital – the region’s energy-focused innovation partnership, which aims to make the region the most attractive place in the world to build and grow clean energy companies.

Mayor of the West Midlands Andy Street highlighted progress since the launch of Energy Capital in February 2017, including:

• The West Midlands Regional Energy Policy Commission – headed by Sir David King – published a report which called for the creation of four pilot Energy Innovation Zones (EIZs) in the region: Powering West Midlands Growth: A Regional Approach to Clean Energy Innovation.
• These four EIZs have now been established. It was announced that a fifth EIZ will be established in Rugeley to look at sustainable housing.
• The region is also establishing three funds: infrastructure; energy efficiency; and communities and innovation, and is bidding for government money to get them off the ground.

Skills for a new climate economy

Street noted that the West Midlands has the best growth outside London since 2010, a turnaround from the worst regional growth before 2010. Energy transition is a key driver of this economic renaissance.

The region’s energy ambitions are geared towards clean, local and affordable energy for transport, housing and industry. Success or failure will also impact growth, skills, fuel poverty, health, inclusion and air quality.

Recent ONS figures show 50,000 energy sector jobs were created in the West Midlands in the past year. But challenges remain for the region, and skills is first among them. Many new energy jobs demand higher skills, whilst lower skilled jobs, which account for 50% of the region’s workforce, are declining rapidly. The region faces a major challenge in meeting this changing need.

Democratising access to clean air

Air quantity and associated health problems are another challenge linked to energy transition, with people in the poorer parts of the region living 7.4 (men) or 9 (women) years less than those in the more affluent.

The regulatory environment

A key challenge of place-based energy transition is how to work with a centralised energy regulator, which was set up to deal with a national level energy supply.

Chris Brown, Head of Core and Emerging Policy and Energy Systems Integration at Ofgem provided the regulator’s perspective at the event.

Ofgem, said Brown, recognises many of the challenges facing regions – subsidy-free renewables, falling energy storage prices, new business models and demand-side response represent a major challenge to the existing order. They will mean more distributed systems, more intermittent supply, and a less flexible power network.

The regulator needs to keep up, but also needs to protect customers by designing the right incentives.

Brown outlined some of the investigations and experiements Ofgem is engaged in:

• Innovation: Ofgem is inviting innovators to come forward with ideas and test them with the regulator. This allows Ofgem to learn about how regulation creates barriers to useful innovation, and assess whether and how those should be changed.
• Dealing with increased loads: Changing energy use and EV charging will mean different loads and peaks. Ofgem wants to hear about new ways to generate energy, absorb load and change consumer behaviour.
• Decarbonising heat: This a huge issue and Ofgem is still to take a decision on how to support it. They are looking at how generation (eg waste-to-heat) and distribution networks will evolve, and what fuels will play a part, including hydrogen. They are considering how to create a system that promotes competition whilst keeping bills fair.
• Reviewing supply licence to sell energy: These licences include social obligations to support consumers, which Ofgem recognises can be hard to meet for small energy innovators. They are undertaking a large-scale piece of work to explore better models for the modern electricity distribution challenge.

Learning from others

The conference also heard from several other cities with lessons for the West Midlands.

• Creating an Energy Market in Cornwall:  Stuart Fowler, DNO Commercial Manager at Centrica, discussed the trial of a platform in Cornwall which allows buyers and sellers to come together in a local market for energy – an ‘Amazon of energy’.
• The District Heating Scheme in Copenhagen:  Andres Dyrelund of Ramboll, a Danish consultancy, talked about a 180-kilometre hot water transmission system which supplies heat to 21 distribution networks in 21 local authorities. In the two largest municipalities, Copenhagen and Frederiksberg, 99% of all buildings are supplied with district heating.
• Sustainable Housing in London:  George Sims from the Greater London Authority discussed London’s integrated environment strategy which sets out aspirations for its energy transition, including becoming zero carbon by 2050. London has higher building emissions, but lower transport emissions, than the West Midlands, so has a big focus on this area. London also has specific challenges; building density means less room for local generation. Most homes are flats, and many are in conservation areas, making retrofit challenging.

NEXT STEPS

EIT Climate-KIC is working closely with partners in the West Midlands to support the emergence of a strong climate innovation ecosystem in the region, through a set of co-ordinated programmes and innovation grants.

Find out more about the Energy Capital partnership.

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