Written exclusively for Utility Week and published here.
The report has been long planned, being the culmination of a lot of hard work over the last few months, but its publication happens to come at a time when recent protests have highlighted the urgent need to step up the country’s efforts to tackle climate change.
In it we outline the many developments, challenges and opportunities that face us across all aspects of the energy system over the next 30 years or so - but the journey to that future needs to start now.
Technology and innovation coupled with the need to decarbonise our sources of power means a transformation is already well under way in our industry. The energy sector has led the way in the country’s efforts to tackle climate change with the growth of renewables bringing us to a situation where over half of our electricity generation now comes from low carbon sources.
But there is no time to rest on our laurels as a transformation of this scale needs to be replicated across the economy. The impressive achievements and numbers so far are masking the danger that current inaction will soon result in progress actually slowing – at a time when we need to be accelerating.
As well as further decarbonising our sources of power (and the most difficult challenges there may still lie ahead) we need to start seriously tackling those sectors where progress has been limited, notably heating and transport.
It’s in areas like these where the energy sector will be playing a new and expanded role with implications for each of its constituent parts. The electrification of transport means increasingly fuelling our vehicles with low carbon power, suppliers offering tariffs that include low cost or low carbon options to charge your car, your vehicle acting as a battery able to store energy for later use or even for selling back to the grid, which in turn will have to be ready to cope with the extra demand that electric vehicles bring.
Low carbon heating is undoubtedly one of the biggest challenges facing us as we look to decarbonise, and will have a major impact on customers’ lives – unlike the changes to our generation mix to date. Moving from a mere awareness of a looming and daunting issue to actually tackling it means that we need stricter requirements to promote the development and uptake of low carbon heating solutions, as well as empowering local partnerships to deliver the solutions that best serve their communities and businesses.
While the energy sector evidently has a vital role to play in enabling wider decarbonisation, it’s only by working in partnership with others that we can deliver such change. That’s why in drawing up this report, we’ve worked with environmental groups, customer representatives and charities, government and regulators – as well, of course, as our own members - and drawn on expertise from academics, business, transport and building sectors
Most importantly, underlying our whole report is the imperative to build this new energy system around the customer.
As I’ve pointed out, you could call it a quiet revolution so far - one which, to its credit, hasn’t particularly affected the average customer. But the future will have a bigger impact and we will need to make sure customers are informed and involved with changes that will affect their everyday lives. Without urgent action, we cannot meet our climate change targets but this transformation can only work successfully by bringing our customers with us.
There’s every reason to believe that the future will bring exciting and beneficial opportunities to customers, but as Citizens Advice rightly points out, we need to guide customers grown accustomed to the status quo through a period of change. And by customers, we’re not talking about a homogenous mass but millions of individuals with different circumstances and preferences ranging from those taking an active interest in their energy usage and gadgets to those who just want their needs taken care of by their energy provider - while also being confident they’re getting a fair deal.
We need to create a market that works for all our customers. It won’t be easy getting there as we move to a very different energy system to the one we have known but that has to be our guiding principle throughout.
And that’s one of the key messages from this report, that our industry is ready for the challenges ahead. Some of these can look daunting but we have achieved great things in recent years and we can do so again if given the right framework. Set clear targets and requirements and the market will respond.
Nobody can yet know all the answers to the questions and challenges we’ve outlined in our report but the need for action is indisputable - as is the need to set out now on the path that will take us to the future energy system. I hope that you all get chance to read the report and I looking forward to working with you as we look to make its vision a reality.
Lawrence Slade, chief executive of Energy UK