Putting people at the heart of the energy system?

by Blog

In September, Carbon Co-op staff member Emilia Melville attended British Institute of Energy Economics conference in Oxford, speaking at the invitation of Tyndall Centre on the future of community energy organisations. Here’s her report on the panel and the rest of proceedings at a fascinating conference.

The 2018 British Institute of Energy Economics (BIEE) conference had the theme of “People  at the heart of the energy system?”.  It was good to see economists putting people at the heart of their thinking, even with a question mark at the end.  However, many of the participants still had a very narrow economist perspective on what is meant by ‘people’, which was often interchangeable with ‘consumer’.

People, consumers or citizens?

Of course, people (as consumers) are at the heart of the energy system – if people weren’t consuming energy, then why would we have an energy system in the first place? But is it important for people to be engaged?

Some speakers (e.g. Ofgem) assumed that ‘engagement’ meant frequently switching supplier. Their question was whether we should expect people to get more engaged, or whether consumer protection means ensuring that even those who don’t engage get a good deal.

Others (e.g. tech companies) assumed that ‘engagement’ as consumers meant spending hours geeking out about when to use different appliances at home, and getting up at 2am to put the washing machine on – in which case most people won’t ever engage, and would prefer automation. This assumption is challenged by Nicolette Fox’s research with social housing tenants on prepayment meters who received free solar PV, and learned how to really make the most of their solar energy to reduce how much they had to feed the meter

Screenshot from Nicolette Fox’ research

Barbara Hammond of Low Carbon Hub thinks that the word ‘consumer’ should have been left in the 20th century.  I completely agree with her that ‘people’ means so much more than consumer – and that we should have a much richer conception of people as citizens. 

People Don’t Matter – Playing devil’s advocate

In the panel discussion I took part in on the Tuesday afternoon, everyone took this richer interpretation of ‘people’ as more than just consumers. I joined Becky Willis, Ragne Low and Simon Roberts to debate whether people matter: Can we get to a low carbon, secure and affordable system without their engagement? Richard Hoggett, who organised the session, had asked myself and Ragne to play devil’s advocate and present the view that people don’t matter, and that we can instead rely on the market and the state to deliver the energy transition we need. It was quite fun to take on the role of the free marketeer who is sceptical about the impact of the community energy sector. Given that this is the mainstream view, it’s interesting that Richard couldn’t find anyone who would argue this position sincerely!

The role of people as citizens in creating the political context for the low carbon transition is essential. Becky has spent a few years interviewing MPs about climate change, and found that whilst most MPs are concerned about climate change, they are not being asked about climate change by their constituents, which leaves them very little political space to act.

Simon emphasised the importance of meaningful public consent, particularly in the context of local planning decisions on onshore wind. The CSE Future Energy Landscapes approach takes communities through a process of thinking about what they appreciate in the place they live, and starting from a positive question of what they can do to contribute to action on climate change, rather than how they are contributing to climate change. When people get together face to face, they find out that others also care and are prepared to take action together.  However, whilst participants were happy to advocate for local renewable energy generation, they felt that collective action ended at the front door – an interesting challenge for making retrofit happen. Can the Carbon Coop approach of open homes, training and peer support help bridge the private home/public concern about climate change gap?

Ragne argued that the state should take responsibility for the state and for the protection of vulnerable customers, and I argued that the falling cost of renewable energy and smart technology means that the market will take care of everything – but since we were both there as devil’s advocate, the less said about that the better!

The future of Community Energy

The discussion on Wednesday morning explored who would be at the heart of future community energy organisations: consumers, voters, residents or investors? Timothy Braunholtz-Speight from the Tyndall Centre invited us to the conference for this discussion, with Mary Gillie, Maria Sharmina and Jeff Hardy.

Mary told us about the challenges of getting through regulatory hurdles to enable people to share renewable electricity generated within a community. She also emphasised that these rules are here for a reason, and that our national grid provides an excellent and reliable service, which we should not take for granted. Grid solidarity, or shared infrastructure, is an essential element of a democratic energy system  – something we at Carbon Co-op very much agree with.

The importance of grid solidarity

Maria highlighted the differences between Community Energy and private developer business models, particularly the value propositions which provide dispersed social and environmental value, and cannot easily be linked to commercial revenue streams.

Costs and value

The importance of the shared value created by Community Energy was also recognised by Jeff, of Imperial College and formerly Ofgem. I was particularly intrigued by the contradictions between his pro Community Energy stance in this session, and his market-oriented stance in the opening plenary of the day, where he’d argued that energy markets should be ‘normalised’ to be more like other markets such as food.  Jeff made the interesting point that the wider benefits of Community Energy are only relevant to Ofgem decision making in the case of a tie-breaker where the ‘number’ is the same between Community Energy and a commercial project. 

This led to an interesting discussion of ‘cost-reflectiveness’ in the energy system – to be really cost-reflective, the externalities would need to be factored in, e.g. through a carbon tax, rather than just charging people for how much their consumption costs in pure energy infrastructure terms. Could the wider social value of the community energy sector be quantified in a similar way to the BRE study quantifying the costs to the NHS of poor housing?  

The question of which costs should be socialised (i.e. shared throughout society), and which should be paid for directly by those using a service, is an important political question.  It came up in the discussion in relation to who should pay for consumer redress – currently energy suppliers have to contribute to the costs of ombudsman services, which are potentially accessed more frequently by more assertive and wealthier people, whilst the costs are spread across society.  There may be benefits to everyone from supply companies being held accountable by some customers, but is this enough to justify the cost being shared by all?

Creating energy citizenship

Energy citizenship includes getting involved with retrofit projects

I believe that whilst people’s roles as investors, residents, consumers and voters are important, the real value of the Community Energy sector is in creating energy citizenship.  The Community Energy sector can build renewable generation capacity and enable people to retrofit their homes. It does need the ability to close the generation-consumption loop, and sell energy directly to consumers.  There is also a huge amount that voters can do to let their MPs know that climate change should be high on the political agenda (note to self – write to my MP about climate change!).  However, through the direct economic value of social, environmental and local economic benefits, participation in Community Energy provides people with a meaningful avenue for action towards the low carbon transition, unsticking people from climate denial, and psychologically enabling support for strong pro-climate policies.  In this way, Community Energy can play a crucial role in building consent for the low carbon transition, and Community Energy groups should seek to embed energy citizenship into the heart of their strategies.