Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
#7 Unlocking city decarbonisation: Local solutions for global challenges
115 Plays1 year ago
In the latest episode in our ‘Voices of the Industry’ podcast series Steer is joined by Peter Gudde, Net Zero Programme Lead at the Greater South East Net Zero Hub.
As the urgency to address climate change intensifies, focus in the UK has shifted towards the value of localised decarbonisation solutions that fit the unique characteristics of the nation’s different economies and communities, both rural and urban.
Our episode is a whistle stop tour of everything Net Zero Hubs do to help a broad range of clients from local authorities to energy providers achieve their low-carbon ambitions. From knowledge sharing and best practice to developing new metrics for investment and a ‘long sighted’ approach to capital, here we learn about innovative approaches to a whole system change that affects everyone.
Key takeaways
- Local Area Energy Plans (LEAPs): The podcast highlights the significance of LEAPs in steering local climate solutions under the influence and control of local authorities.
- Commercialising Net Zero projects: Discussion on how making net zero projects commercially viable is essential for their success, and how private sector funding is crucial in unlocking the potential of city-wide decarbonisation efforts.
- Investment attraction: The necessity of attracting investments to fund local decarbonisation projects, blending public and private funds to create robust financing models.
Guest
- Peter Gudde, Programme Lead for Net Zero for the Greater South East Net Zero Hub, has over 30 years of experience across sectors. He previously spearheaded sustainable energy initiatives at West Suffolk Council. Peter is also a doctoral researcher at the University of Suffolk, focusing on energy transition and governance in local government. He holds chartered qualifications in environmental and waste management.
Host(s)
- Shivali Mathur, Associate for Energy Transition, Amberside Advisors.
- Tim Gallagher, Journalist at Steer.
www.steergroup.com
Recommended
Transcript
Introduction to Decarbonization Urgency
00:00:08
Speaker
Hello and welcome to Voices of the Industry, a podcast series bringing you leading industry voices who challenge thinking across transportation, infrastructure and cities.
00:00:27
Speaker
With the net
Localized Solutions in the UK
00:00:28
Speaker
zero deadline of 2050 drawing nearer and the two thirds emission reduction target for 2030 for developed nations even closer, all minds need to be focused on the fastest way to decarbonise our communities and economy. In the UK, attention has lately turned to the value of localised decarbonisation solutions that recognise the complex and unique ways that our nation's different villages, towns and cities function.
00:00:51
Speaker
Local
City Decarbonization and Private Investment
00:00:52
Speaker
area energy plans or layups represent a move to climate solutions under the influence and control of local authorities, who are recognised as exercising control in 45 key climate policy areas. Commercialising net zero projects can be key to their success and private sector funding can help to unlock wider city decarbonisation. Attracting investment will be a crucial strand of discussion at STEER and Amberside Advisor's joint event, Unlocking City Decarbonisation on May 22nd.
00:01:20
Speaker
the latest in our series, The Rethink Rooms.
Local Governance and Net Zero Engagement
00:01:23
Speaker
With us today to discuss the topic ahead of our event is Peter Goody, NetZero Program Lead at the Greater Southeast NetZero Hub. Peter has extensive experience in local government with previous roles on Forest Heath District Council and St Edmundsbury Borough Council, as well as working as a PhD researcher at the universities of Suffolk and East Anglia in smart energy systems. Hi Peter, how are you? I'm great. Thanks so much for inviting me along, Tim.
00:01:49
Speaker
No worries. I thought as a little opener, why don't you tell us a couple of sentences about your PhD research? Oh, that's really interesting. Thanks for picking that one up. Yeah, I'm looking at local governance, particularly around climate emergencies and thinking around how local areas and the local authorities can engage better around net zero. Now, the big challenge is that local authorities are diverse and across the UK and a lot of the research is focused on the metropolitan areas. And I know this call is around cities.
00:02:19
Speaker
And we've got to take account of the rural areas as well. And so my area of focus is trying to help the local authorities that are probably less well resourced navigate the net zero landscape and work with others collaboratively. So in a nutshell, that's what I'm trying to achieve.
Role of Net Zero Hubs
00:02:34
Speaker
Hopefully it will be of some success and some use at the end of the process. That was good. Glad to hear that someone's on the case. Also with me is Amberside Advisor Shivali Martur.
00:02:45
Speaker
Shivali has been at Amberside Advisors since the end of last year and joined from the Project Management Office of the Department of Energy Security and NetZero, or DESNERS. Shivali has extensive experience in the global energy market, spanning heat decarbonization, carbon management, energy efficiency, sustainability strategies, and renewable technologies. She has a strong background in leading strategy development, policy delivery, and program management, and will be hosting our panel of experts at unlocking city decarbonization. Welcome, Shivali.
00:03:14
Speaker
I wonder if you could tell us a really important lesson that you took from working at Desnaz that you've brought to Amberside with you.
00:03:21
Speaker
Hi, Tim. Thank you. Thank you for the welcome. Collaboration. The one thing that in our Department of Energy Security and Net Zero we believe in is working collaboratively, internally, externally, and that's one thing which I've brought together in Ambersight, working with Steer, and it's beautiful to work collaboratively with not only Ambersight colleagues, but also bring in the expertise from Steer.
00:03:44
Speaker
I'm almost working in multi-vector internally from transport consultants to specialisms to specialism on commercial and financial side in energy. So collaboration would be my takeaway. That was perfect. Thank you. Shivali, why don't you take it away? Welcome, Peter. Thank you for your time.
00:04:02
Speaker
You've been at the Greater South East net zero hub for five years. Can you please explain the role of a net zero hub and how this relates to accelerating the commercialisation of net zero projects in the public sector? Great. Thanks for asking that question, Shivali. And as the intro said, I'm a programme lead for net zero and there are five net zero hubs across England.
00:04:25
Speaker
We were set up in 2018 by central government as a way of joining up the dots between national clean growth ambitions and local policy and delivery to achieve the energy transition. So the challenge was at the time, there was a gap between current at the time, government policy around decarbonisation and growth.
00:04:44
Speaker
and what was happening on the ground and we were there to in effect fill the gap and try and help coordinate some of that. So we're a free resource available to the local areas working particularly with the public sector on the ground to deliver net zero initiatives across all typologies, power generation, building decarbonisation, mobility.
00:05:02
Speaker
Now, the advantage that this program has, it's locally focused and it's delivered locally as well, as opposed to essentially delivered models. So we've got a very diverse client base in the Southeast. We work with 146 county district and unitary councils, as well as the health sector, university and education. But we also work with private and community energy sectors, and we'll touch on that a little bit in the podcast, I hope.
00:05:26
Speaker
whether that's on local industrial decarbonisation programmes or community energy funding support. So finally, we get involved in, and it's not a small issue, it's a massive one for the UK, is around delivering domestic energy retrofit. And part of our role is to help local authorities navigate the grant schemes that are available and also to see how they can unlock local investment, build supply chains and training networks to increase the supply side for net zero solutions.
00:05:52
Speaker
So my team focused particularly on helping our clients achieve investment ready net zero projects and programs. And we work with clients at any stage in the project development, whether that's providing a range of support activities to accelerate their projects from concept to delivery through the investment business case.
Challenges for Local Authorities
00:06:10
Speaker
A lot of projects at the moment are supported by grant aid. And so we're trying to help our local authorities not only navigate the state funding, but also the non-state funding that could be available to help them.
00:06:22
Speaker
blend finance between what's available nationally through national programs and what's available from other sources. And we have a client-led project investment pipeline of around 100 projects, worth about 1.1 billion currently on our books, across heat, energy generation storage, transport decarbonisation, as I indicated.
00:06:42
Speaker
And around 50 million pounds of private finance has been brought into the projects that have been delivered today. The challenge is that these are single projects and the move into programs and systemic change is the critical thing. And how do we then see how the money can flow into these projects? So we're keen to see how individual projects can be built into programs, how local authorities and other partners can work together to unlock some of the investment opportunities. And the landscape's changed over the last
00:07:10
Speaker
five years, I would suggest, since we were set up. Back in 2018, it was an 80% national target obligated under the Climate Change Act. Now, it's net zero by 2050. We've also seen a local push by local authorities and councils up and down the UK towards earlier target setting through their climate emergency declarations, which was politically and locally driven as opposed to national. We've seen that now as a net zero target for the UK, but earlier date set
00:07:40
Speaker
by the local authorities. But for most councils, the challenge is how do they best operate in an environment that is, given that they're politically democratic organisations with systems and processes, how do they navigate what is relatively new to them, the energy system, and relatively new to them, the investment markets and other forms of investment. And so it is challenging for local authorities, and I think we'll come on to that in the podcast.
Importance of Collaboration
00:08:06
Speaker
Thank you, Peter.
00:08:07
Speaker
I think you touched on private finance and also the pipeline of projects you have, the local push. So just expanding on that, in terms of unlocking this wider decarbonisation in UK in terms of urban centres, but also rural communities, what role do you think does private finance, stroke community investment, has to play in this area?
00:08:29
Speaker
Ultimately, we're not going to deliver net zero without all the money that needs to be available brought to the table. Currently, the way that we approach this is through the tax base and utilizing state funding. There's a lot of money flowing in other places, but it's not marshalled. The challenge comes that we need to be able to bring
00:08:49
Speaker
all the opportunities that different sources of funding and finance bring to the table for different types of projects in a way that is easy to apply and easy to flow. So the money flows into the projects and the projects become successful. So it's really important that we're able to understand what's available in the marketplace and also what could be funding that could be raised locally, for example. So the range of opportunities that could be brought together
00:09:14
Speaker
And thinking about how that would then work with state-derived funding is a real opportunity for local areas. The challenge is that we haven't had a track record in the last 20 years of doing this for this sort of area of work. So we look forward to seeing how some of the examples that we're going to talk about today can enable that.
00:09:34
Speaker
Thank you. And as you said, the landscape has changed in the last five years and particularly last couple of years, I would say, following COVID as well. And turning into your extensive experience in local government, what do you think are some specific challenges which are faced by local authorities in financing these net zero projects? So some of the challenges are specific to the public sector and some are
00:09:57
Speaker
common across the energy transition. It doesn't matter what organization or institution you are, some of them are common and we'll touch on that. But the public sector has to think and act in a more commercial way in order for it to sustain the amount of money that keeps really important services being delivered. The challenge for local authorities is that they're trying to deliver a multitude of services and moving through the energy transition is just one of them.
00:10:20
Speaker
but it's not mandated. A lot of the services are statutory and need to be delivered, and particularly in a financially constrained environment, that becomes challenging to say, well, should we put our money here or put our money there? The nature of the decision-making processes in local authorities are both complex to navigate and cyclical, if you think about political cycles as well.
00:10:40
Speaker
But that's for very good reason since they're spending taxpayers money. So there has to be a high level of probity and due diligence within the decisions they take around where they get money from and how they utilize it. So it's really important for them to be able to meet responsibilities and spend taxpayers money wisely, but also
00:10:59
Speaker
trying to navigate the commerciality of the energy system and the way that potentially funds could come into that. So those are some of the specific challenges. And to overlay that, there's an in-house capacity and capability challenge.
00:11:16
Speaker
particularly at the moment, as we're seeing some local authorities struggle to meet the balancing of books because of the impacts of Covid and the global recession that we went through in the last couple of years. And we're seeing a lot of churn at the moment of staff due to the financial state of some of the local authorities. Some of those staff are involved in delivering some of the programmes. So that makes for quite a technical, quite a challenging environment for local authorities.
00:11:42
Speaker
Overlay that with the more general challenges around system transition, particularly around the energy network. Nearly every project that we get involved with has to connect a cable to the energy network, to the power network, or put a pipe in the ground. And that requires negotiation and agreement with the local network operators. And the way that the investment of the infrastructure occurs
00:12:09
Speaker
sometimes, and not in all cases, but sometimes does bind and slow down and hinder the process of projects moving forward. That is something local authorities have not tended to be used to. They haven't had to navigate the energy system in such a detailed way for their projects in the past. It's usually a case that they connect for demand only, and now they have to think about demand and supply.
Innovative Funding Models
00:12:32
Speaker
Those challenges, alongside supply chain challenges, are ones that local authorities have to take on board in trying to understand in order to bring their projects forward. That sounds really interesting. There's obviously a lot of change going on. I wonder if you could give us a bit more detail, Peter, about the kinds of stakeholders that local authorities are bringing together in this process. I mean, thanks for asking that question, because that's really important, that this is not just about technology, it's about people. And we are looking at a fundamental change to society, which is about people.
00:13:02
Speaker
It's about how we use energy and how we live our lives. So within the projects that we're seeing, working with our public sector clients, we deal with all parts of society and those are potentially stakeholders in any of the projects that our clients are taking forward. Probably starting point is the local authorities themselves and their internal stakeholders, whether it's a finance officer, whether it's a manager who's dealing with property or assets.
00:13:29
Speaker
There are internal relationships that need to be managed and we work and help local authorities to navigate those relationships and build strong teams. We also work to bring local authorities in areas together. They may have worked before on different issues. There are opportunities for them to work in the future around procurement, around the cost of capital, around the
00:13:48
Speaker
delivery of projects. So we try and bring local authorities together to aggregate up and create scale that may be more attractive for the investment market. And for comfort as well, working together in terms of solidarity and collaboration is a really important issue here because the energy system doesn't recognize the administrative boundaries of the local authorities. It's a different administrative and geographical area. So we do need to think across boundary here, both in terms of technology type, but also how stakeholders work together and
00:14:17
Speaker
The energy system is no different now. That certainly sounds complicated. How, as a herb, do you manage that network of people? We work in several ways, both on a specific project basis. We work with a client who's got a stakeholder.
00:14:34
Speaker
a range of stakeholders that they need to work with. So we might help them with mapping out who those stakeholders are, thinking about what sort of relationships they need to build, how they'll work with those. We also work externally from the project, working with some of the system actors and the network operators, for example, in a more tactical and strategic way, thinking around how can we influence in a positive way change by sharing
00:14:58
Speaker
knowledge that we've gathered by dealing and working with our clients, but also as being part of one of the government's departments, we have the ability to interact and share knowledge around delivery and where that may not be so successful. How can we help that delivery improve?
00:15:15
Speaker
and working with the network operators who have their own investment plans, they may not have so much visibility of what's happening on the ground. And so we can help them gain visibility of what the anticipated level of change and activity is in the local area. And that's going to become much more of a way forward, thinking around mapping and modeling the local area in order to come up with the best solutions so that investment ahead of need becomes a thing as opposed to investment just in time, which is a traditional
00:15:44
Speaker
or conventional way that these issues of network development are approached. That's interesting. So kind of building on that, you just mentioned sort of knowledge sharing and mapping. I assume that you're building a best practice the whole time. Could you tell us a little bit more about that? Because this is kind of at the moment, an unknown quantity.
00:16:01
Speaker
And that's really important that our role is not just around helping individual projects, it's about sharing knowledge, accelerating good quality practices and reducing the cost and the time spent and the effort spent trying to get the projects away. So our role is hopefully valuable in terms of sharing knowledge across domains, whether it's around certain technology types between our clients and beyond our clients, because we're one of five hubs across England. So we do share knowledge not just within
00:16:31
Speaker
a specific locality of where we are working, which is in the southeast. But we will go beyond the southeast into other areas of England and the UK to share best practice. We're utilizing those tools to do that, and one of them is a platform called NetZero Go, which is a local authority-facing tool.
00:16:50
Speaker
funded by central government. In effect, it's your all-in-one place to go as a local authority for information, for guidance, for access to template documents, for forums to be able to share knowledge between peers.
00:17:05
Speaker
And that's really important to learn of others and to also share your knowledge with others. So we're very keen to see how we can help local authorities share best practice and also get behind the standard case study, which tends to be a little bit more positive. You want to know where did it go wrong? How can I improve on what experiments? If it was a bad one, for example, how can I avoid that in my project?
00:17:29
Speaker
So that's really important that we share that knowledge. We also get involved in research and development. So although it's not our key role, we do see there are places where we can fill a gap in terms of putting some time and effort into thinking about things. Can we improve the way feasibility studies are done, for example, for car parking, places like that, where you might be thinking as a local authority around putting solar canopies in, batteries in, EV charging for the future. So we're developing tools and techniques to help local authorities
00:17:59
Speaker
access better knowledge, model better, design better, think around the tools that are outside of the marketplace that they could utilize and purchase themselves in an effective way so that both data and tools become available to them in ways that they haven't had the opportunity to use in the past. Cool. And then since you just mentioned case studies, I wonder if you are able to give us any sort of more concrete examples. Yes. I mean, we worked with
00:18:28
Speaker
and helped local authorities, West Berkshire, West Oxfordshire, county councils in Essex, Suffolk, Norfolk, Cambridge, look at solar, look at heat networks, things like that. Also, we've helped, for example, electrify the bus service in Cambridge through a grant called Zebra. We helped the local authority and the bus company to
00:18:52
Speaker
design in and procure the buses in that area and put the infrastructure in to help charge those buses. Those are the sort of things we get involved in. The challenge comes though that a lot of the local projects that come forward are early stage. So we see projects at the early stage, we help the client and then possibly they don't come back to us. We hope they've been successful and we've been helpful for them to move forward.
00:19:15
Speaker
We look forward to engaging with our clients when they deliver their projects and celebrating their success. But I think it tends to be, Tim, quite a treadmill. I think the next project comes along and people tend to forget about celebrating the good stuff. And that's, I think, one of our roles is to build some case studies as well. So we do have case studies on our website and through Net Zero Go to help local authorities see what they could achieve and also to find out who has been involved in those projects so they can talk to them directly.
Community Energy Projects
00:19:43
Speaker
That's great and hopefully we're helping you celebrate a little bit today by asking you about them. Circling back to the question about funding, is this a completely new funding environment and how is it different or similar to previous infrastructure and planning funding? I think if we just take a step back and we think around what we've got to achieve here, I mean decarbonisation and climate change is such a massive wicked problem. We need to think around how we as a society can
00:20:12
Speaker
fund this, but we don't think about this as a pure cost. One of the challenges is trying to convert a very monetised return on investment environment to one that values the wider benefits
00:20:28
Speaker
I mean, research evidence shows that for every pound spent, six pounds of damage is avoided globally in terms of the impact of climate change and global warming. So we don't cost that into our models. So when we start to think around where the money is going to come from and how we build our business cases, we probably need to be a bit smarter.
00:20:48
Speaker
a bit more open about what is the collateral impact and positive benefits of investing in, say, domestic retrofit, which is a long burn, energy efficiency, low return for an individual investor. But the collateral benefits are significant, whether it's around improving the health outcomes, educational outcomes, improving air quality and the like, if you're looking at transportation, for example.
00:21:12
Speaker
So, thinking about some of those new sources of money, we're working on a project that is funded by the Department for Net Zero called the Local Net Zero Accelerator. This is a £19 million project, a programme of work, with three combined authorities, one in the West Midlands, one in Greater Manchester, and the newly formed York and North Yorkshire Combined Authority.
00:21:35
Speaker
Looking at new forms of area-based investment model, trying to bring in different sources of investment, not just state funding, but also other forms of institutional investment, potentially crowdfunded investment, local investment, mostly raised money, in order to
00:21:51
Speaker
undertake programs that are cross area as opposed to individual asset. When I say an individual asset, I'm thinking around rooftop solar or a heat pump. Those are single asset classes. But when you take those in the round and you think around the money that could come into addressing those, there are potential opportunities to blend the finance and get a range of returns plus the co-benefits.
00:22:15
Speaker
and that's an area that we're really keen to see how that plays out. That project's just starting, and it's a two-year program, so we're hopefully going to see the value of testing things out in those areas. An example will be the Bristol City LEAP model, where we see a partnership between Bristol City Council, Amaresco, and Battlefall, a long-term private-public partnership.
00:22:37
Speaker
that allows money to flow from the private sector on a values basis into local area decarbonization. So it's really important to test that sort of model, but there are other models available. We need to think around how these other models could be applied, and are they appropriate for a rural area compared to a city area? It may be that they're
Place-Based Energy Planning
00:22:58
Speaker
not. So we need to think and test, but we need to move quickly as well, Tim. That's the key thing.
00:23:03
Speaker
Shivali, Peter just mentioned community finance and also rural models versus city models. Did you want to pick up a few questions on that? Thank you, Tim. Peter, just summarizing a little bit on and probably replaying some themes. You talked about local authorities, and I can completely relate to them. The multitude of services they have to offer, the complexities, not only in the energy system, but then the transport, the adult care, social care.
00:23:29
Speaker
issues even starting from potholes to highways. So there is a plethora of systemic and issues, to be honest, they look at. And the role of hub, you mentioned about knowledge sharing tools, data, there's a lot of support that you are providing to local authorities is invaluable in my mind. More from, I think, dimension about the urban centers and also the rural communities.
00:23:55
Speaker
And reflecting on these two, do you think there is a role, and you mentioned about the funding as well, that we need to go for innovative funding models from city deals to localized rural small areas. Do we see a role for social value investments playing in funding this net zero? So in the end, we all want happy communities. Can we create that investment role and bake in social value in those investments?
00:24:23
Speaker
That's a really, really important point that we tend to think traditionally around investment and investment into projects and activities as measured by their financial return, turn a rate of return, net present value, payback, whatever the metric that we use. Investment markets are probably driven by those quite conventional metrics, although we are seeing change in the marketplace, although relatively small.
00:24:45
Speaker
it's important when you're dealing with the local authorities in the public sector that their purpose is about wellbeing and about supporting the locality across a whole range of issues and they deal with market failure. So there's a real challenge there that you're dealing with two very different audiences, two different ways of thinking around an issue.
00:25:08
Speaker
when we're trying to deliver a single type of project. We're seeing the investor market at one end, we're seeing the local authority at the other, and arguably, you've got the energy system, energy actors in there as well, all talking different languages, all having different ways of measuring stuff. We need to come to some common ground as to be able to let the money flow through to these projects. There's
00:25:27
Speaker
For the local authorities, there are a lot of value streams that are not monetized, to use that phrase. Sometimes that's a difficult phrase to swallow when you're dealing with well-being, that we monetize stuff. But in order to make the money flow, we need to convince an investor that there's something in a good proposition here. For the purposes, we'll use that term.
00:25:47
Speaker
And when you think about housing retro, for example, there's strong evidence that more energy efficient homes, as I've alluded to before, reduce household debt, prove health incomes, educational attainment can add value to the property. Now, how do you build that into a business case and then convince an investor that's the right thing to do? So those social values and those value streams are really important when we think about building a business case in the public sector.
00:26:13
Speaker
There are some investors and for example pension schemes have to allocate a certain amount of money to environmental social goals. We need to move more in that direction and think around how we can build those into both the upstream, the upstream investor approach and the downstream into the local authority in the public sector business case development so that we have a common set of language
00:26:37
Speaker
And we have a common set of measurement of the performance of those projects. So when the money does go into a project, it delivers better homes. It delivers more comfortable living, lowering the cost of household bills, meaning people don't have to worry about heating. They can eat properly. That means educational attainment in the young improvements, means health for those with COPD, essentially stops bed blocking because householders are going back in and out in the wintertime from their homes because they're all back into the NHS.
00:27:06
Speaker
So there are things like the way that we value projects is really important. And there's also thinking around how the investor market treats that in their approach to long-sighted capital. I think we could use the phrase, capital that actually works not just in the short term, but works for the long-term benefit. That's really interesting. And I'm thinking about a project that we've done at Steere actually, which was about woodland management and how we developed metrics for measuring the
00:27:35
Speaker
well-being benefits of putting woodlands into community hands. It was a really interesting one. But what you were just saying sort of, I guess, requires a certain level of whole system thinking. And I wonder, does the net zero hub act as a way of kind of bringing those different non-monetized factors together under one roof?
00:27:52
Speaker
I think you've hit a really good important point there, Tim, that we've tended to traditionally think about a project, a single asset class. Let's build a solar farm, for example. Let's put a heat pump into a home. Let's put EV charging onto the street or whatever. When you take a place-based approach, you need to think differently. Conventionally, we have a series of silos, a series of lines coming down of funding for an asset class. We now need to think laterally across an area.
00:28:18
Speaker
And that's where area-based decarbonisation pathway thinking, whole system thinking, we talk about local energy planning, that modelling of a locality to then be able to build up a picture based on a future scenario or set of scenarios of change that will allow investment into technologies and techniques and practices to decarbonise the locality in a fair and just way as well. We do need to think around that rather than thinking around it just about a techno fix.
00:28:47
Speaker
So that's where the local authorities probably have as much opportunity and responsibility to play to take their role and whether it's a convening role or that it's actively engaging and taking forward local area energy planning or decarbonisation pathways on a spatial basis and a temporal basis.
00:29:05
Speaker
It's really important because once you have that and you've mapped your area, you understand it, you can then talk to investors. You can then talk to the system operators. You can talk to the network operators and say, this is what we need in the future, folks. This is what we need in five years, 10 years, 15 years.
00:29:21
Speaker
OK, it may shift a little bit. But in the absence of that, we are investing in a semi-dumb system. We don't really know what's going to be coming onto the system. And that's challenging for the network operators who have to agree their investment plans with off-gen. And that cost that they're investing in ultimately comes onto our energy bills. So we need to think in the whole system's way.
00:29:42
Speaker
That could bring in, for example, thinking about the water, the water energy waste nexus. How do we bring those things together? Currently, we don't do that so well in the UK. And maybe that's the thing that we need to bring forward in some of the thinking. But the starting point is around modeling your area and building clear understanding of what's needed and building investment plans off that so you can then talk to investors in a more meaningful way.
Community-Driven Transition
00:30:04
Speaker
That's great. And I know that kind of modeling the area really feeds into what we'll be talking about soon.
00:30:10
Speaker
Peter, just moving into a little bit of the area of community energy investments and community energy champions locally and probably not going into details, but taking an example of a successful project from community perspectives, Swaffon prior district heating project, a lot of value in bringing communities on board with us when we are delivering the projects. And I think more valuable if communities are investing and getting the return.
00:30:37
Speaker
from those investments. What are your views on community energy projects being led by champions and working possibly with the stakeholder, as you mentioned, DNOs or the future FSO, the future system planner operator? I think it is the way forward for certain areas. I mean, we have to think around how we bring those projects forward. And the challenge for community groups is navigating what is a complex system. So that
00:31:03
Speaker
need still needs to be fulfilled and I think helping those embryonic groups or those groups are even quite mature to move to the next project is really important. The ability to get a vested interest, a positive vested interest into the local area is a really valid important piece as well that how the individual residents understand
00:31:23
Speaker
the reason for change because there's a lot of barriers to change. Why would you want to move from one system of heating your home to another if you can't see the short-term benefit? Selling those benefits in the long term and understanding, well, this will make a difference somewhere down the line because I'm involved in this as a collective is a really, really important thing.
00:31:43
Speaker
How to bring that forward? There are a range of actors that are involved, local authorities, and we get involved with the Community Energy Fund, which is a stimulus package to early feasibility projects for community energy groups. There's a long way to go, and we were really keen to support Community Energy because
00:32:02
Speaker
We cannot rely on a top-down national system only. We need to have a multitude of directions within this long-term system change, and we need people vested in that, and we need to take those that can't invest with us as well. The challenge is that you'll end up in a place where you don't have parts of society engaged in the sorts of changes that should be or are likely to be needed.
00:32:28
Speaker
So we do need to understand how those that can't invest can take benefit from system change as well and make their lives better. So the value of having people on the ground, the local activist, positive activist for this sort of thing is really critical and unleashing potentially latent local funds.
00:32:49
Speaker
For example, through crowdfunding, we've seen that with solar farm build out in Wiltshire. For example, we've seen that up in Warrington where municipal bonds have been a successful way of raising money for certain types of renewable and energy efficiency programs.
00:33:06
Speaker
These are ways to unlock potentially latent local capital that is then invested into the local area, potentially creating jobs, creating opportunities for people to benefit from the returns on investment from the projects, as well as seeing something that has a longer term goal, a longer term ambition, which hopefully will be attractive to a local area.
Public-Private Partnerships in Decarbonization
00:33:27
Speaker
You mentioned about Bristol City Leap earlier tonight. We also saw the example of Coventry following in a different model, and as we said, different models fit at different areas. What are your thoughts on unlocking city-level decarbonisation, possibly with models like Bristol City Leap versus rural decarbonisation, where
00:33:47
Speaker
different models and possibly social value investment brings a higher value but how do we bring base and we've talked about base quite a lot in delivering these together from Hub's perspective and then move on to local authorities to bridge the gap of capability capacity if there we can possibly PPP is the Public Private Partnerships.
00:34:07
Speaker
So there's a real place for cities to work in a unified way. We're seeing that with the combined authorities in the West Midlands, Greater Manchester, in terms of both the leadership role and the ability to corral and bring forward coherent programmes of work, Greater London Authority as well. So that gives scale. I mean, the one advantage of scale is you can get capital cheaper. And so in urban areas, we've got a high density of heat and energy use.
00:34:35
Speaker
you can probably find it easier to access capital because of the sheer scale of the projects and the nature of the changes that are going on. So there's real value for those public-private partnerships and for collaborations, certainly in cities to be able to do that. I would say there's equally value to local areas in the real semi-rural outside the major conurbations where you have potentially single mayoral authority type models.
00:35:03
Speaker
Outside of those, there's real value to working together for resilience as much as anything else. We work with, as I say, 140 or so local authorities, all very different, and the challenge comes for some of the rural local authorities. They may have
00:35:19
Speaker
One champion, one person working on a program of decarbonisation of climate change and they may also be doing another job as well in a part-time energy of fuel poverty. So to be able to work with your peers and then to build up collaborations and scale,
00:35:36
Speaker
is really important and may not be the sort of public-private partnership model that works so well in that area. It may be a local delivery model that could utilize local structures and may be working together as local authorities but working with other local partners but you know there are models out there that we want to see tested more and to see replicated and I think
00:35:57
Speaker
Through the Local Net Zero Accelerator, certainly we'll learn things not just for the urban areas, but for the rural areas. For example, the building of supply chains and increasing the skill set of the local jobs market. How can we improve accessibility for people coming into the sector and increase the opportunity, which is another value stream that we should be building into our projects.
00:36:20
Speaker
So, these things will probably need to be tailored to the local area, but we do need models, replicable models that will work in certain typical similar environments, whether it's semi-urban, urban and rural. And we look forward to seeing how the local net zero accelerator brings forward a couple of those models. So, we've covered a lot of ground there and I'm very grateful to Peter and Savali. I wonder, just to round off,
00:36:46
Speaker
Peter, maybe you could tell us something really good that's happening right now in the net zero space and something that you would really want to happen in the future. Well, that's a good one. We always think about the challenges. So let's think about some of the real positives. I've been really pleased to see, for example, Braintree counts or secured money to decarbonize one of their ledger centers, build solar canopies, you know, very practical local project.
00:37:13
Speaker
At a larger scale, I'm pleased to be supporting the knowledge sharing through the Net Zero Go platform. We manage the contract in the Southeast. We want as many local authorities to use that as possible because the more we use our collective knowledge and share our collective knowledge, the better we will get, the faster we will get, the more efficient we will get, and we'll get better products, we'll get better outcomes.
00:37:39
Speaker
And, you know, I'm really pleased that that project is now embedded within a lot of the activity that we do and supporting our clients around knowledge sharing. So the net zero co-platform, I'm really proud to sort of encourage local authorities to use. And one for the future.
00:37:54
Speaker
One for the future. I think collaborations and building portfolios of activity across a local area. We talk about local energy planning. I think more around a bit techy, but spatial decarbonisation pathways, because it's not just about energy, it's about other things as well. So getting to know your area and being able to model it and then develop an investment portfolio, an investment prospectus, I think is really exciting. We're doing some projects around that for industrial estates, thinking around you could develop an investment prospectus.
00:38:24
Speaker
where the landlord and the tenants and other landowners can collaborate as a local energy community. So I'm really excited about that sort of project being able to follow through and get investment into it and to be replicated out to other industrial estates and business parks across the Southeast. So that sort of thing. I love to see things happen. And I
Future Collaborations and Pathways
00:38:47
Speaker
think those sorts of things will be great as exemplars and opportunities for translating ideas elsewhere.
00:38:55
Speaker
That was fantastic, thank you. Shivali, you're a woman on the inside of the energy industry. What's a current positive and one that you would want for the future?
00:39:05
Speaker
This conversation, and thank you so much Peter, and thanks for organizing Tim, this conversation has actually really filled me for more hope for future. Generally there is that feeling, a feel, and you can see it in the market from finance side, the investors are quite keen to come into UKPLC and local authorities or local sector and the hubs are, there is a whole mindset change on how do we work together, how do we work collectively
00:39:30
Speaker
bring the base, deliver the projects together, bring a healthy pipeline of not only high investable but high social value or low social value projects as well. There's a whole sense of bringing that happy communities which I love because that's where we are for and for future my comment will be
00:39:49
Speaker
whether it be in organizational resilience or resilience at home, house level, in our personal lives, or resilience at a better, beautiful world, will need diversity. So we will need those diverse perspectives, diverse solutions, and that appetite is increasing day by day. It is, and that is beautiful to see. We are involving everyone
00:40:14
Speaker
We're taking people in the journey together and that will bring resilience. So hopefully that is the feeling which the others will get as well. That was great, thank you. So yeah, thank you both. A really fascinating conversation and thank you to everybody that's listening.
00:40:49
Speaker
you