What role should local governments play in heat transitions? Lessons from the Netherland and England

by Anna Devenish

This blog was originally posted on the ‘Going Dutch?’ project website on 30/11/2022.

Russia’s invasion of Ukraine has led to a dramatic increase in natural gas prices and an unprecedented energy crisis in the European Union and the United Kingdom. The longer-term goal of reducing dependence on natural gas for domestic heating has become more urgent.

England and the Netherlands have committed to the goal of heat decarbonisation and natural gas phase-out in the residential sector by 2050. Both countries are looking at the same range of technologies, including heat pumps, heat networks, biogas, and potentially green hydrogen. 

Two very different approaches

However, the two countries have chosen different governance approaches to achieve this goal. (In our research, we make a further distinction between Scotland and the rest of the UK). Both countries are relying on a mix of both market mechanisms and state intervention to decarbonise heat, but our research suggests that the Dutch governance approach has involved a larger role for state coordination and delivery than in England. The Dutch approach to heat transitions can also be characterised as a planning-led (learning-by-doingapproach supported by the state’s governance capacity. England, in contrast, has prioritised a market-led (waiting-and-seeing) approach that focuses on cost reductions. 

A heat transition vision for every municipality 

One example is the mandate and funding given to local government for heat planning. According to the Climate Agreement, each Dutch municipality is required to develop and subsequently implement a heat transition vision specifying the timeframe and sustainable heating solutions for each neighbourhood in the municipality. The Dutch government has made €2.6bn available over the period 2022-2026 for local authorities and other government agencies for planning and implementation activities (across all climate sectors). 

A lack of formal powers  

In England, there is a considerable amount of activity by local authorities in local energy planning and piloting, but there is a lack of formal powers or statutory responsibilities for local authorities for heat transition planning and implementation.

Gas-free neighbourhoods 

The Dutch national government has also funded and managed a Programma Aardgasvrije Wijken, or natural gas-free neighbourhoods programme, that provided grants to municipalities to pilot heat transitions at the neighbourhood level. The pilots tested the overall approach to heat decarbonisation in a particular locality. The pilots explored a number of issues, including management and administration challenges, cost reduction, selection of technologies, the impact of existing laws and regulations, effective citizen engagement strategies, and the use of heat transitions to improve neighbourhoods’ overall wellbeing. 

Not-for-profits in the driving seat

In contrast, the approach to heat transition piloting in England has been to link innovation and piloting support to the development of specific technologies and fuels rather than localities. For example, the UK Department for Business, Energy & Industrial Strategy funded an Electrification of Heat Decarbonisation Project to install and monitor the performance of heat pumps in a representative range of UK homes (about 750 in total). A consortium led by the not-for-profit organisation Energy Systems Catapult with Delta Energy and Environment and Oxford Computer Consultants are managing the project. 

In-house or outsourced?

Other examples include a knowledge sharing framework for municipalities created by the Dutch government, and the provision of consistent technical guidance to the local actors. These efforts relied on the national government agencies’ in-house capacity. In contrast, in England we found evidence of a tendency to use external consultants at the national level as opposed to programmes run by government agencies. 

The spectre of privatisation

Differences in the wider institutional context in these countries can account for the divergence in governance choices. One such contrast concerns how far the UK and the Netherlands have respectively embraced privatisation and contracting out in solving public policy problems. 

The UK took a decisive turn to market liberalisation in the 1980s. Privatisation, liberalisation, and deregulation became key focal points of this paradigm change. The goals of public spending reduction and improvement of government efficiency led to the rise of New Public Management (NPM) ideas for the provision of public services in the 1980s, which prioritised contractual relationships and outsourcing. Thoroughgoing adoption of neoliberalism and NPM eroded the capacity of and belief in the efficacy of state action in markets and provision.

Although many countries adopted neoliberal and NPM reforms, the degree to which these ideas spread varied. Countries with majoritarian political systems became more committed to marketising the public sector, while in continental Europe this shift did not radically transform the role of the state in facilitating solutions to public problems. The shift to the neoliberal paradigm and NPM ideas was swift in the Netherlands in the 1980s but was ‘relatively superficial and non-committal’ and was partially reversed in the 1990s. 

Austerity’s legacy in both countries

However, we found evidence of low local governance capacity for heat and, more broadly, energy planning and delivery in both the Netherlands and England (for example, consultants have been quite widely used at the local government level in both countries). Local government capacity in both countries was strained in the 2010s as a result of cuts in grant funding from the central government as part of austerity policies and a decrease in the amount of local taxes. Because local authorities have statutory duties in areas other than energy (such as social care), this has meant that resources for energy planning have been scarce. 

Overall, the Netherlands has exhibited higher state capacity in heat transition planning and implementation than England. This is in line with the general nature of political economy institutions in the two countries, with (local) government actors in the Netherlands having more powers and responsibilities for developing, funding, and implementing measures to help solve public problems than their English counterparts.

Looking for more information?

This blog arises out of research conducted as part of the Going Dutch? research project.

Going Dutch? is led from the University of Sussex and funded by the UK Energy Research Centre. It is comparing governance arrangements for heat decarbonisation and natural gas phase-out in the UK and the Netherlands and investigating how these arrangements have been shaped by different political and institutional contexts.

If you’d like to know more about their work, you can find it here.

 Disclaimer:Opinions expressed in this blog are those of the authors alone and do not necessarily represent the opinions of the University of Sussex, or the Sussex Energy Group as a whole. 

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Some initial responses to the Autumn Statement

On Thursday 17 November 2022, Jeremy Hunt, the UK’s Chancellor of the Exchequer, made his anxiously awaited autumn statement. In doing so, he announced a number of energy-related polices for the United Kingdom, including green-lighting the Sizewell C Nuclear power plant, a new windfall tax on low-carbon electricity generators, targeted support on energy bills for the most vulnerable, new energy demand reduction targets, and additional funds to improve energy efficiency. 

I spoke to some of the Sussex Energy Group’s energy policy experts to see what they made of it. Here’s what they said. 

The Windfall Tax

Several SEG members were pleased to see an expansion to the windfall tax. But some questioned how the funds will be used, or whether extending it  to include low carbon electricity generators, but not gas fired electricity generators, was the right move. 

An expanded windfall tax is certainly helpful. However, it needs to be used effectively. The last windfall tax, announced in May, was partly used to fund tax breaks for companies investing in oil and gas in the North Sea. These oil and gas resources won’t help address energy prices for years to come, and are de facto unusable if we are to limit catastrophic harm from climate change. Windfall tax revenues should be applied directly to energy bill support measures, and used to fund energy retrofits and other demand reduction measures.”

Dr Marie Claire Brisbois,  Senior Lecturer in Energy Policy

The rate increase and extension of the windfall tax on oil and gas firms, and the reduction on the investment allowance is welcome. The new temporary tax on low carbon generators (Electricity Generator Levy) makes sense.  However, it’s also clear that gas-fired power generation is fuelling extraordinary profits, but no action has been taken on this. This unequal treatment risks slowing the transition to low carbon electricity.

Dr Matthew LockwoodSenior Lecturer in Energy Policy

Energy Efficiency and Energy Demand Reduction

Many Energy Group members welcomed the energy demand reduction targets, and the scale of investment in energy efficiency. Others were sceptical about whether the approach to energy efficiency is well designed. 

It is welcome to see a task force focusing on energy efficiency being brought forward. It is essential that we focus on energy demand reduction and take every opportunity to improve energy efficiency across society. Fuel poverty has been a persisting problem for years and it is time that this gets fixed for good.

Professor Mari MartiskainenProfessor of Energy and Society

The additional £6bn over 2025-2028 for energy efficiency and an indicative goal of 15% reduction in energy use by 2030 is a major shift in policy. This level of support would take spending on energy efficiency back to levels last seen a decade ago in the late 2000s.

Dr Matthew LockwoodSenior Lecturer in Energy Policy

Attention and money for a 15% energy demand reduction by 2030 is very welcome. However, the lack of new investment before 2025 is a problem. We urgently need spending in the near term to roll out a massive home energy retrofit scheme. This would mean that households would be insulated from further energy price shocks when the energy price cap goes up again in April.

Dr Marie Claire Brisbois,  Senior Lecturer in Energy 

Energy retrofits can be a very good investment, as it ties in to reducing energy bills and creating new jobs, in addition to addressing energy demand. But the government’s scheme has to be carefully designed to ensure it’s a success (like the Kirklees Warm Zone) and not an expensive failure (like the Green Deal). 

Dr Noam BergmanLecturer in Energy Policy 

These energy efficiency proposals  are very welcome. However, getting all those buildings effectively retrofitted  will require large dollops of trust in government both from the businesses involved in the retrofitting work or supply chains, and from homeowners and landlords. If this is to work, both suppliers and customers will need assurance that the scheme is well desgned, and will not be open to cowboys, offshored, or abandoned quickly.But if the big problem for a retrofit scheme is ta lack of trust in government, then this statement is exactly the wrong thing to do. While this statement announced an additional £6 billion for energy efficiency, when you read the fine print, you see that none of this money will be spent before the next general election, when everything will likely change again.  This surely generates more cynicism and caution among key actors.

Dr Marc HudsonResearch Fellow in the Politics of Industrial Decarbonisation Policy

Sizewell C

Philip Johnstone weighed in on Sizewell C. He said:

New nuclear is too costly and slow to make a difference to the UK’s energy challenge and the need to rapidly decarbonise. Forcing energy bill payers to subsidise the cost overruns of the deeply troubled nuclear industry under the proposed RAB model when energy costs are already so high and when there are far faster and cheaper low carbon alternatives, makes little sense. The record of the UK’s own recent attempts at nuclear construction, as well as the disastrous record of EPR construction programmes in Europe, suggest that this commitment will be a very costly mistake

Dr Phillip JohnstoneSenior Research Fellow

Targeted Support

Finally, Mari Martiskainen had this to say about the government’s announced approach to energy bills from April 2023 onwards. 

The recent energy price has seen people’s bills going through the roof. It is important that we as a society support those who are most vulnerable, but the government must also ensure that the help is targeted well – so that people who may be left out of initial help, but still struggle with their energy bills, are not left in limbo.

Professor Mari MartiskainenProfessor of Energy and Society
 

 Disclaimer: Opinions expressed in this blog are those of the authors alone and do not necessarily represent the opinions of the University of Sussex, or the Sussex Energy Group as a whole.  

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Why You Should Consider a Place-Based Approach to Hydrogen

Hydrogen is very much on the agenda at COP27’s Energy Day today (15 November 2022). In today’s programme there are two separate sessions devoted to exploring hydrogen’s potential not only as a replacement for fossil fuels, but also as a source of green, inclusive, economic growth in Africa and beyond. 

As it happens, this is a conversation I can contribute to. As project lead on the CREDS funded project: Place-based business models for Net Zero I have been exploring how to develop hydrogen solutions that create value locally for your economy, communities and the environment.  As part of this project, my colleague (and fellow SEG member) Dr Giulia Mininni and I have reviewed 26 regional and national level hydrogen strategies to identify the key drivers and best practices you should consider when developing a hydrogen strategy for your region.  Here’s a short summary of what we found. 

Why a hydrogen strategy matters

Hydrogen is a very promising technology. It has the potential to help us achieve Net Zero, deliver green jobs and economic growth, and meet industry’s decarbonisation needs.

But incorporating hydrogen into your energy mix requires careful planning. If you want to generate, store and transport hydrogen you will need substantial investment in a lot of new infrastructure. At the same time, you will also need to consider how quickly the cost of hydrogen will drop in future – as this is crucial for ensuring there is sufficient local demand. 

After studying both regional and national hydrogen strategies from many different countries, we strongly recommend taking what is often called a place-based approach to hydrogen. 

What is a place-based approach?

A place-based approach is strategy that puts the specific circumstances of a particular place front and centre, and engages local people as active participants in decision-making. 

This is an approach many regions are taking to hydrogen. It involves identifying and developing place-based business models that can maximise local demand and seize opportunities which might not exist at a larger scale. 

5 pillars for a place-based hydrogen strategy 

In our report, we pick out five things you should take into account when developing a place-based approach to hydrogen. These are:

  1. Your region’s physical geography
  2. Your access to crucial infrastructure like ports, transport networks, and industrial or technological centres 
  3. Your political and institutional landscape
  4. The human resources you can draw from; and 
  5. Any distinctive opportunities and issues you might have

By building your hydrogen strategy around those five pillars, you will be in a better position to  maximise your region’s distinctive strengths, provide opportunities for future cost reduction, and deliver and retain value for local communities. 

What a good place-based hydrogen strategy looks like  

Our report also identifies some of the best practices for developing an effective place-based hydrogen strategy. Here are some of the most important of these. 

First, take a whole-systems approach. That means you should be thinking about how hydrogen would fit in with the existing economies, industrial systems, and infrastructure you already have. It also means considering what societal benefits for the region you can provide, and how hydrogen solutions will balance local resources and environmental objectives — such as Net Zero and biodiversity. A whole-systems approach is crucial for reducing costs and increasing demand, through creating strategic interdependencies and coordination between different parts of your economy. 

Second, embrace learning by doing.  Building an evidence base from pilots and studies is really important. This will allow you to identify where you can reduce costs as well as avenues for scaling up. But good learning by doing will also involve collaboration and knowledge exchange across different sectors making use of hydrogen and with other regions doing similar things. This is partly because pilot programmes are heavilydependent on global supply chains, which (as the last few years have taught us!) can be disrupted. Effective collaboration across both vectors and regions can minimise those disruptions. 

Third, work with industry and communities to create local benefits. It’s important to build trust with those groups, and engage them in the decision-making process. While many hydrogen strategies are developed through close engagement with local industry utilities, communities are often not given enough input in the decision making process. Place-based hydrogen solutions needs to be built through continued multi-stakeholder collaboration to create better outcomes for local communities and users.

Where you can find out more

More detail about all of this will be in our full report – which will be out soon! If you’d like to read more about what we are doing, you can find our project website here.

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Canada needs an energy poverty strategy. Here’s what it might look like.


Professor Runa Das presenting her work at the Sussex Energy Group in October 2022.
Professor Runa R. Das

With COP27 now underway in Egypt,  the question of how to deliver a just transition is very much on the agenda. 

Greening a country’s economy in a way that’s fair and inclusive is a complex issue, with challenges that vary from country to country. But one issue many governments need to grapple with is energy poverty – the inability of households to adequately heat, cool, or light their homes.  

In October 2022, the David Suzuki Foundation released Keeping the Lights Ona pioneering new report on energy poverty in Canada, an important issue that’s still flying under the radar for  Canada’s policymakers. 

This report is co-authored by SEG Co-director Professor Mari Martiskainen and Dr Runa Das, an  Associate Professor at Royal Roads University. It sets out a series of actionable, evidence-based policy recommendations that could serve as a starting point for a Canadian energy poverty strategy. 

In October 2022, soon after the report’s launch, Das visited the Sussex Energy Group to tell us about her work. 

A changing energy landscape

Canada is making pretty good progress when it comes decarbonizing its electricity supply. It currently generates 82% of its electricity from non-emitting sources like hydro, nuclear, wind and solar. (In the UK, the percentage is a less impressive 55%).   

But unless they are carefully designed, energy transitions can make energy poverty worse. This is because they can make costs go up, at least in the short term. If we electrify our heating and transportation systems, for example, we’re increasing electricity demand. And increased demand can create a spike in energy prices.  Moving to a different system can also have big upfront costs, as new technologies like solar panels, heat pumps, and electric cars aren’t cheap. 

Filling in the blanks

Canada doesn’t yet officially recognise energy poverty in its statistics, or have strategies for reducing it. That’s why this new report is particularly useful. A mix of quantitative and qualitative data, it not only helps flesh out the extent and character of energy poverty in Canada, but also offers clear guidance on how to tackle it.  

Das and Martiskainen estimate that between 7%  and 9% of Canadian households are living in energy poverty, depending on how you measure it. It’s also particularly concentrated in the Atlantic provinces. When factoring in housing costs, the percentage of households in energy poverty can climb as high as 24% in Prince Edward Island, and 23% in Newfoundland and Labrador. 

A graphic showing energy poverty rates in each Canadian province. It shows that rates are particularly high in the Atlantic provinces

The report also opens a window into what it’s like to live in energy poverty – with the all the acute stress, discomfort, shame, embarrassment, and even health problems it leads to.  Here is what some interviewees said about living in energy poverty: 

…I don’t like bringing my friends over here, it’s very rare that I bring anybody over here. I’m really like embarrassed, unless it’s evening and it’s like kinda dark and then they can’t see anything really, and then they’re like, oh it’s so nice in here, we should come more often. It’s like, no. So. But yeah, no, it… you know, it’d be nice to have like movie night and stuff, but I worry because there is mould and I’ve had, like I’ve had like some lung issues before.

– Sarah

I read it, I just to look at what it’s, like $200, you know, a month. And then more, ’cos actually really I don’t pay very close attention. I’m afraid to, you know that’s like, you know when you’re afraid to look at your bills, you’re just, no okay… paycheque has come in, and okay, this this this, paid, and then go.

– Matthew

Winter you always, you know, I’m trying to manage with blankets, you know? When it’s very cold. For sure the most problem comes when we are going to sleep, because it’s very cold, it’s very hard so just trying to wear socks on your feet, get more blankets for covering, and managing in a way, you know?

– Shruti

Four things Canada’s policymakers could start doing right away

Using the full range of the data they gathered, Das and Martiskainen also generate a series  policy steps that governments could take right away to start tackling energy poverty both in the short and long term.  These recommendations are clustered around four distinct priorities:

  1. Adopting an explicit energy poverty strategy
  2. Providing a universal (clean) energy service that includes cooling as well as heating services
  3. Ensuring energy is affordable 
  4. Decarbonizing and making residential buildings more energy efficient 

If you’d like to find out more about energy poverty in Canada, or what might be done about it, check out the full report here.

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We need to talk about the Genetic Technology (Precision-Breeding) Bill

By Adrian Ely

On Monday (31 October), the Genetic Technology (Precision Breeding) Bill came back to the Commons chamber for its third reading.  As Boris Johnson put it, the bill aims to “liberate the UK’s extraordinary bioscience sector from anti genetic modification rules”. In Conservative circles, it’s widely seen as a key opportunity arising from Brexit.  

But deregulating biotechnologies can have profound effects on a country’s social and environmental systems. And it can lock us in to a particular approach to new technologies that last for decades to come.  My research shows that changes in biotechnology regulation should be made carefully, and be informed by broader and more considered societal debate around the emerging biotechnologies that could transform our lives. 

Historic Roots

The UK’s current approach to regulating biotechnologies can be traced directly to the controversy that erupted around genetically modified organisms (GMOs) in the late 1990s.

Before this, the UK (like many countries at the time) had been designing GMO regulations based largely on an assessment of the physical risks that might arise from recombinant DNA techniques. That approach provided no requirement for labelling of GM foods. 

In the late 1990s, however, the mad cow disease epidemic had left the UK confronting a crisis of confidence in science, just when journalists began taking an interest in GM foods.  This led to an acrimonious public debate, and many consumers adopting a hostile, highly sceptical stance towards GMOs and the science that supported it. This was one of the drivers of the development of an EU-wide requirement for stringent risk assessment, labelling and traceability of GM foods (based on the process through which they had been developed).  

In adopting this new process-based approach to regulation, the UK and other EU countries were effectively moving from interpreting the risks from biotechnology primarily as physical risks to health or the environment, to an approach that saw biotechnologies as posing broader social and/or political risks as well. 

In the UK, the Blair government’s pivot towards managing these broader social risks of GM foods resulted in an unprecedented public engagement exercise entitled “GM Nation?” to better-understand public attitudes.

Brexit’s legacy

In a landmark decision in 2018, the European Court of Justice ruled that this process-based approach also referred to newer techniques of gene editing (GE), even though these hadn’t existed when the initial Directives had been drafted decades earlier.  This decision provided little opportunity for broad societal debate in the EU around opportunities and concerns raised by this new biotechnology.

But in January 2021, just a week after the end of the transition period that followed the UK’s departure from the EU, Defra launched a public consultation on the regulation of genetic technologies in England.  

The Food Standards Agency commissioned research on consumer attitudes towards GM and GE, and numerous other bodies including the Regulatory Horizons Council, the Task Force on Innovation, Growth and Regulatory Reform and BEIS consulted on issues related to biotechnology regulation.

Future-proofing regulation?

The government’s proposed approach (in the Bill) unfortunately ignores much of this work.

Most of the responses to the consultation suggested that the government should regulate GE in the same way as GM. The FSA found that the majority of those surveyed wanted GE foods to be labelled. But the Bill includes no such requirement. Instead, it creates a new category of “precision-bred organisms” and lays out various general procedures, the details of which are to be determined by future regulations or at the discretion of the Secretary of State.  Viewed charitably, this might be seen as “enabling legislation” that can be flexible and adapt (through statutory instruments) as technologies evolve.  Less charitably, it might be seen as a fudge.

Aside from technologies, public attitudes are also subject to change, and the Bill needs to be able to adapt to these as well. In the USA, GMOs were not initially labelled, but after a series of state-level campaigns the country adopted a process-based labelling regime that came into force this year.  

What the muted response means

In the context of chaos in Westminster and the government’s broader “attack on nature”, public protest against unlabelled GE are relatively muted, despite a slew of concerns raised by civil society organisations.

However, the government’s consultations to date give little indication about whether this is likely to continue, once GE foods start arriving on our shelves.  

Deeper societal debate around labelling could inform proportionate decisions about rules for labelling, traceability and liability.  Taking the time to consider these issues is also vital for the devolved administrations like Scotland,where Mairi McAllan MSP, Minister for Environment and Land Reform, voiced her concern in the summer.

Some of the issues critics have raised may make it to the debating chamber in the coming days. But they deserve to be discussed more widely.  The opportunity for broad societal debate around these new technologies should be grasped – we will be living with the implications for decades.

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The views and opinions expressed here are solely those of the individual authors and do not represent Sussex Energy Group.

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