Combined Heat & Power

Demand Side Services

Energy Efficiency

Heat Networks

Mind the retrogap! Government should empower local actors and solutions to decarbonise our buildings

5 August 2020

The Association for Decentralised Energy (The ADE) lays out its vision and policy proposals for heat and energy efficiency zoning in its new paper “Zoning for Heat and Energy Efficiency”. The paper was launched today in partnership with UK Power Networks, who simultaneously launched their complimentary “Heat Street” Project.

The ADE is calling for government to introduce a clear, strategic policy framework for heat decarbonisation and energy efficiency; bringing together the fragmented mix of decisions, innovations and demonstrations that are currently commonplace across the UK.

While being fragmented, policy today also aims mostly at new buildings. However, most of the buildings we need to decarbonise are already built. Therefore, the ADE wants to see government introduce new policies to retrofit heat decarbonisation and energy efficiency into the existing building stock too – addressing the ‘retrogap’ in policy.

The most apt way to achieve both outcomes, the Association proposes, is through ‘zoning’ – this means taking a view of local opportunities and local constraints, and identifying the most appropriate heat decarbonisation and energy efficiency package for an area.

Charlotte Owen, Policy Manager at the ADE, said:

Enabling local decision making and locally tailored decarbonisation pathways will play a key role in reaching net zero. Without implementing approaches such as zoning, the UK risks falling behind on carbon budgets, as set out by the CCC, by missing opportunities for whole systems optimisation, including the use of demand side response. The report suggests that the UK must commit to a strategic patchwork approach to heat decarbonisation, over a single technology pathway. Otherwise, we risk preventing local areas that already have clear decarbonisation opportunities from acting.

Heat is inherently local, with different areas of the UK able to take advantage of different heat and energy efficiency opportunities. They will also have differing needs in terms of infrastructure and the associated skills and supply chains. As such, to meet our climate change targets, there is no “one size fits all” option and every solution for decarbonisation will require some level of in-home disruption for consumers. The ADE argues that zoning frameworks for heat and energy efficiency can tackle these issues by enabling local buy-in, targeted local solutions, and greater levels of consumer engagement.

Councillor Josh Schumann, Chair of Cambridgeshire County Council’s Environment and Sustainability Committee, said:

Reducing our carbon footprint is one of the Council’s foremost priorities – we have a huge part to play in making the world a cleaner place for future generations. The targets we have set ourselves are ambitious, but the county knows it can deliver, having already invested £22m into carbon reduction schemes to benefit local people, identified £56m to work in partnership on more, and planted 25,000 trees. It’s imperative for us that it’s properly funded and written into job descriptions.

The ADE has shown that zoning can be used to empower local decision making, with key principles set at a national level but directed into particular local zones by local actors. This would allow areas that can make progress towards decarbonisation now to do so and enable greater collaboration between local stakeholders. UK Power Networks are leading this charge, and today launched their industry first project, “Heat Street”, which will begin to explore opportunities for industry and local authority collaboration presented by zoning.    

Ian Cameron, Head of Customer Service and Innovation at UK Power Networks;

We are delighted to support the ADE in its approach to decarbonisation of heat through a local zoning framework. By working closely and collaboratively, we can bring local authorities and key stakeholders to the discussion and enact targeted solutions to facilitate the uptake of cost efficient low carbon heating for all customers. In fact we’ve already embarked on this journey by launching our ‘Heat Street’ project, which will deliver learnings to demonstrate the true value of undertaking the zoning approach on our journey to Net Zero.

To reach net zero, we need to create policy landscape that enables a cost-competitive market for low carbon heat and energy efficiency, and signal to investors that these markets are open for business. Zoning frameworks further enhance these markets’ potential by considering which low carbon solutions are suited to different local contexts, and encouraging the implementation of supportive policies to enable their uptake. This enables those with a financial stake in the area to consider investing in skills, jobs, infrastructure or in-home improvements, helping to create green-collar jobs that are so needed as part of a wider green recovery from Covid-19.

Nathan Sanders, Managing Director of Distributed Energy at SSE Enterprise said:

Our experience in owning and managing distributed energy assets tells us that ‘Heat zones’ would be a vital tool to ensure heat networks can be delivered in areas where they provide maximum benefit, boosting investments at the necessary speed and scale. We also believe that a full local decarbonisation can efficiently happen by integrating heat, transport and renewables infrastructure into a ‘whole systems’ approach that would optimise local resources and enable a smarter energy system.

The ADE's work on zoning was supported by many stakeholders.

Elexon Chief Executive, Mark Bygraves, said:

Heat decarbonisation will play an important role in meeting the net zero challenge. We support the work of the ADE and energy companies to create more opportunities for local authorities to help develop heat zones across Britain. Creating local heat zones can also encourage more consumer involvement in heat decarbonisation. 

Heat decarbonisation is dependent on using a mix of technologies and solutions. We will continue to share our expertise in managing wholesale electricity market arrangements and metering with the Government, the ADE and the industry, which we believe will help to create a joined up approach to developing competitive heat markets.

Stuart Allison, Head of Commercial and Strategy at Vattenfall Heat UK, said: 

Technology selection is critical, but backing certain technologies alone is not enough to decarbonise heating in the UK.  Our research shows that a more strategic long-term plan, backing specific technologies in specific zones, could reduce infrastructure costs by as much as 40% compared to the government’s technology-led approach - resulting in lower costs for the end customer.   

  By rolling out a zoning approach for heat networks and other technologies such as decentralised heat pumps, national governments will give local authorities and developers the certainty to invest. They will be confident there is sufficient demand without needing to subsidise the market, and having clear goals for a defined area benefits everyone – be they consumers, suppliers, property owners or regulators. This approach is already proven to work in other markets where Vattenfall operates, and is vital if the UK is to realise the huge potential which low-carbon heating offers.

Aoife Deery, of Citizen's Advice Scotland, said:

CAS welcomes the publication of this report. As the ADE states, consumers must be at the heart of the energy system and understanding local energy needs is crucial to achieving a fair transition to net zero. CAS also believes that this is important in ensuring that the cost of the transition does not fall to those least able to pay.

ENDS

About the ADE

The Association for Decentralised Energy is setting the vision of a local, efficient, low carbon energy system which enables energy users to make the choices which work for them. The Association has more than 130 members active across a range of technologies and markets and is widely recognised as one of the leading industry bodies in the sustainable energy sector.

Related ADE publications

Heat and Energy Efficiency Zoning:  A framework for net zero for new and existing buildings

Laying the foundations for net zero: Putting households at the heart of the energy transition

ADE Staff Available for Interview:

Charlotte Owen, Policy Manager: Charlotte is the ADE’s lead on heat policy, working with government and industry to identify policy solutions for local and national heat decarbonisation. Charlotte’s primary focus is on heat networks policy, where she has worked with key sector stakeholders to shape regulatory frameworks for heat networks in Westminster and Scotland. Most recently, she played a key role in the development of the Heat Networks (Scotland) Bill.

For further information please contact:

Amy Ritchie, External Affairs Officer, The ADE, Tel: +44 (0)7939572226, amy.ritchie@theade.co.uk

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