If I was the Secretary of State for Energy and Climate Change… (part 2!)

This is the second mini manifesto we're publishing this week in honour of the General Election, profiling some leading lights of our industry to tell us what they'd do if they were Secretary of State for Energy and Climate Change.  Today's manifesto is from Casey Cole, Managing Director of Guru Systems, offering offers smarter metering and debt management systems for local energy networks.

If I were Secretary of State for Energy and Climate Change, my mission would be to put us on the path to zero carbon heat and electricity. Only by doing this will we meet our legal commitments to decarbonise the UK economy and mitigate the worst effects of climate change.

As you’ll see, I also wouldn’t get too hung up on where my remit officially stopped.

To get back on the path, we’ll need to radically improve energy efficiency, develop our ability to shift electricity demand, enable renewables to meet the bulk of our electricity requirements, and rapidly develop our district heating market.

First: ramp up energy efficiency

Reducing carbon emissions by 80% or more can only be achieved on back of deep energy efficiency improvements. It’s also the best way to reduce household energy costs and it greatly improves health outcomes. Despite this, the current UK Government has systematically gutted our main energy efficiency programmes, calling them “green crap.”

In addition, Green Deal has crashed and burned. The loans are too expensive and the interventions are just too much hassle.

I would make energy efficiency a national infrastructure priority, taking a locally-focused approach and requiring results to be measurable and verifiable. I would bring back a supplier obligation, channelling the funds to local authorities to deploy using their knowledge of local needs.

I would sweep aside Green Deal and replace it with both sticks and carrots. Council tax would be banded according to the efficiency rating of homes, with charges decreasing the better the rating. At the same time, I would bring in zero interest loans for improvement measures, with emphasis on quantifiable results.

Second: genuine market reform

The Electricity Markets Reform has been a massive exercise in changing very little. The recent capacity auction was a case in point, where most of the £1Bn spent was promised to old coal-fired plant and existing generators that would have been available if we needed them anyway. Demand side response (DSR), estimated to be worth at least £5.6Bn to 2020, was left out in the cold.

I would shake up the Capacity Mechanism to focus on demand side response (DSR) and only the capacity needed to enable high penetration of renewable energy generation. In support of this, and to help fund other measures, I would put a stop to subsidies for fossil fuels (around 0.5% of UK GDP or £15Bn per year).

Whatever level of support for renewables I ended up putting in place, I would stick to a transparent long term plan for degression to provide investor certainty – not create boom and bust with an ever shifting subsidy policy.

The value of generating electricity where people need it has long been ignored. As a small generator, if you want to provide electricity to a neighbouring site, you pay the same charges as if you’d brought the power from a far-off power station. I would sideline the perennial foot-dragging exercise that is License Lite and bring in “short-haul” distribution tariff to allow local generators to get paid a fair share for the benefits they provide.

Third: move the heat market to the next level

Heat networks are essential to meeting our carbon reduction commitments, but in the UK we don’t yet do district heat well enough.

I would make heat a regulated market, covered by OFGEM, with enforced transparently on pricing and network performance. Rather than using planning as our only lever for driving expansion of heat networks, I would enable local authority owned networks to link up new and existing heat schemes. This would provide a backbone distribution network that would allow us to separate generation, distribution and supply and create a genuinely competitive heat market.

Having pulled all this off in my first year in the role, I’d then go on the lecture circuit, patronising colleagues in the US and Europe about how easy this all is, if only we take bold action.

What would YOU do if you were in charge of DECC?  Tweet us your thoughts to @se2limited or @se2_rachael!