Making heat ‘cool’

Professor Jim Skea CBE EI President

Professor Jim Skea CBE
EI President

Energy decision-making is widely varied. There are mega-decisions about nuclear reactors, gigawatt-scale offshore wind farms and interconnectors that criss-cross the North Sea. Then there are the literally millions of decisions, each modest in itself, which collectively shape energy needs and markets. Policymakers and headline writers love the big stuff. Nevertheless, it is the more humble things which will shape out the energy future and which really challenge policymakers.

“Heat” has become a catch-all term to describe all forms of energy use that are not electricity and not transport – and that’s a very large share of energy demand. There is a tendency to describe heat as a “sector”. Winston Churchill once famously said that India was no more a country than the equator was. Well India is certainly a country now but, in my view, heat is no more a sector than a kettle of boiling water is. And talking about heat markets is also bizarre. There may be some district heating schemes where heat is priced and traded but, for the moment, heat largely stays within the premises where it is generated and used.

It is also odd that the energy labelled “heat” in commercial buildings is more often used to keep us cool. Hence, the not entirely facetious title of this blog – we could really do with a catchy term, which covers the energy needed to keep us comfortable, whether it involves nudging temperatures up or down. “Heat” makes it sound as though policy is all DECC’s job. Something round “buildings” or “built environment” would make it clear that other government departments, notably Communities and Local Government who look after building standards have a rather important role to play.  Suggestions welcome!

One of the consequences of regarding heat as a sector on par with real sectors, such as electricity, is the temptation to mimic policy mechanisms that work well where there are functioning markets, c.f. the complexity of the Green Deal. Smaller consumers do not make decisions with the same degree of sophistication as finance officers in major utility companies – and nor should they. If we want to promote energy efficiency and renewable heat then simple, understandable rules and incentives are needed. I was talking to a Swede yesterday who pointed out that Scandinavians value simplicity in all things from furniture design to energy policy. They look with bemusement at the elaborate mechanisms that the UK uses to shape electricity markets and energy consumption patterns.

So where does this rather grumpy rant take us? First, I think we need a holistic approach to keeping people comfortable in indoor environments. It is basically about minimising energy use and maximising inputs from environmentally sustainable energy sources. Second, a joined-up vision of where we are going would help. Top-down views of UK low carbon energy futures suggest a big role for heat pumps for example – but it is fair to say many energy professionals remain sceptical.  Every time an old boiler is replaced by a modern combi boiler we lose the hot water tank – the cheapest form of energy storage for buildings – that would be needed to get heat pumps installed. Are we locking ourselves out of a low carbon future in the longer-term for more incremental gains in the short term? Finally, we need rules and incentives that match the needs of households and businesses and the way they make decisions. When DECC presses control-alt-delete on energy policy after the Spending Review is concluded, let’s hope “heat” is one of the areas that gets the attention it deserves.

The Heat Conference will be held on 25 November in London and is organised by the Association for Decentralised Energy and the Energy Institute.

The Government’s first 100 days (…or thereabouts)

Professor Jim Skea CBE EI President

Professor Jim Skea CBE
EI President

Well, 125 days on my reckoning but the EI  is only slowly instilling some discipline into its new President.

Looking back at the Energy Barometer, which we published just after the UK General Election, the strongest message from EI Fellows and Members was the call for policy clarity. We’ve had a rapid sequence of announcements on renewables and energy efficiency since May, each of which is clear enough on its own. But taken together, the package has left a deepened sense of uncertainty about where things are going.  As I argued in a piece in the ENDS Report, we need a high-level clarification of what energy policy is trying to achieve. How are the three strands of energy policy – climate, affordability and security – woven together in the Government’s view?

The policy landscape had certainly become unnecessarily cluttered. Geological layers of policies that overlap, interact and contradict have accumulated. A spring cleaning of the policy cupboard is overdue, and some of the recent announcements make eminent sense in terms of good governance. Strictly zero-carbon homes are a mirage if realised through offsite “affordable solutions” that could have been better procured by other means (but don’t throw away the baby with the bathwater by weakening efficiency requirements!). Few will lament the passing of the financial model that underpinned the Green Deal. But there is a sense of confusion as to whether the Government is pursuing “better regulation” or rolling back the low-carbon agenda, the latter conclusion being the one that many may draw. Meanwhile, away from the domestic energy policy scene, the Government remains upbeat about its ambitions for this year’s Paris climate conference.

Perhaps the clearest message since May has been the unambiguous support for shale gas. Unfortunately, central government and local government are not singing from the same hymn-sheet, as Lancashire County Council demonstrated when they rejected Cuadrilla’s planning applications in June. Whatever central government says, this creates uncertainty for investors. And anyone could feel confused by the government’s approach to local energy decision-making – does central government have the last word (shale gas) or do local communities (wind)? Wise investors recognise that sociology as well as geology is an important development criterion. If anyone succeeds in taking forward shale in the UK, it is likely to be the company that chooses development sites in areas with an industrial heritage and businesses that can benefit from lower energy prices.

The pressing need is for the Government to articulate the overall aims and philosophy of its energy policy. And, as Steve Hodgson argues in his most recent Energy World editorial, it’s the ‘sustainable energy agenda’ – renewables and efficiency – that has been buffeted most by recent announcements. In building confidence, my own priority would be the management of the Levy Control Framework which caps subsidies for renewables and energy efficiency. Whether this constraint bites or not is hugely dependent on volatile wholesale energy prices. Clarity about how the government intends to respond to that volatility is top of my list. And a comment on Hinkley Point developments would also be good. “DECC says no fears of Hinkley delays, despite review” was the headline in Engineering and Technology Magazine last November.

Past, present and future

Ian Marchant

Ian Marchant FEI, President

All good things must come to an end and I am now handing over the Presidency of the Energy Institute (EI) having served two years. It has been a joy and a privilege to have the role and I hope I have been a good steward of our organisation. In reflecting on the two years, my thoughts are about the past, present and future.

We have just finished celebrating our one hundredth anniversary and that included a cake in the Palace of Westminster, a video from the Prince of Wales and numerous dinners and events up and down the country. It is good occasionally to look back and celebrate the achievements of the past, however that phase of EI’s life is over, probably for another 25 years. We have also launched the Energy Matrix, which makes available the accumulated knowledge of over 90,000 records and wisdom of our industry, in a modern digital form.

But enough of the past. We are all members of today’s energy industry and the EI continues to address today’s issues. During the last twelve months or so we have hosted the inaugural Energy Systems conference and our annual IP Week conference, which this year generated a lot of media interest, as well as another 90 events. A new addition to the EI calendar has been the autumn President’s event. In 2013, I hosted a debate and then in 2014 I gave a lecture which, as it was held in a function room at the Hard Rock Cafe, was full of song title puns. We have got involved in new initiatives such as POWERful Women and ESOS, and the first publication under the Energy Essentials banner has been issued. Our technical programme continues to go from strength to strength with the issue of 41 technical guidance documents, the publication of the first G9 offshore wind annual incident data report and further growth in the content of and access to The Journal of the Energy Institute. We have continued to drive up standards and build competencies for the future with the accreditation of 68 energy-related courses in 21 institutions throughout the world.

And talking of the future, as I hand over the reins to the very capable hands of Professor Jim Skea CBE FRSA FEI, I would highlight three foundation stones that have been laid recently. Firstly, we have started the refurbishment of our building to make it fit for the 21st century and to provide better member services. Secondly we have undertaken and launched our first Energy Barometer, which uses the knowledge and experience of our membership to gauge the state of the energy world and to inform policymakers and commentators. Thirdly, we introduced a new EI award category, the Young Energy Professional of the Year, to complement the work of our growing Young Professional Networks.

I believe that the group who met under the leadership of Sir Boverton Redwood a hundred years ago would be proud of what their creation continues to do and in its plans for the future.

A nice problem to have with awards

Ian Marchant

Ian Marchant FEI, President

I have never been a big fan of awards, probably because I never win any! However, last year I was one of the judges for the Energy Institute’s annual awards and this sort of changed my view. I had two, apparently conflicting, emotions. Firstly, I was really impressed with the calibre of many of the nominees and was struck by the obvious evidence of professionalism and achievement. However, the second emotion was that in a few of the categories I was disappointed with the depth of the field as I know from the various roles I have around the energy industry that there is a lot of really great stuff happening and lots of really talented and committed people.

I would single out two particular awards where I would have liked to see a lot more nominees. Firstly there is what is now called the ‘Energy Champion‘ award which is for an individual who has made a significant contribution to our industry. I suspect that one reason for a small field is that people don’t feel they should nominate themselves. I totally agree with this so why not nominate a colleague or contact who has gone above and beyond the call of duty. They could be your energy hero or they could be a rising star, it doesn’t matter; what matters is the impact they have had.

The second award where I would like to see a deluge of nominees is for safety. This is a topic close to my heart and I know that, for most companies in our sector, it is the number one priority or core value. Lots of good stuff is happening, every day, to improve processes, change behaviour and reduce risks. Let’s celebrate this and use the awards to showcase what can be done to inspire others to raise their game too.

So my plea is that we make the job of this year’s judging panel much more difficult by swamping them with loads of examples of the good things that are happening in our industry. This would be a nice problem to have.

The EI Awards are free to enter and the deadline for submissions is 29 June 2015.
For more information, please visit www.energyinst.org/ei-awards

 

Energy Barometer – the role you can play

Prof. Jim Skea CBE FEI EI President Elect

Prof. Jim Skea CBE FEI
EI President Elect

This month sees the roll-out of the EI’s new Energy Barometer, which aims to ensure that the voice of the energy professional is heard by policy-makers and in the wider energy debate. The Barometer will be drawn from an annual survey among EI members.

Some of you will have already had an email from EI President, Ian Marchant FEI, inviting you to join the EI College which is at the heart of the Energy Barometer initiative. This means you had the good fortune to be randomly selected from among the professional and pre-professional membership to spearhead the Barometer project. If you have received an invitation, please accept at once. The EI Knowledge Team is waiting for your reply.

The team is currently preparing a questionnaire, which will be circulated to College members in early February. This involves researching questions, consulting industry experts and the EI’s Energy Advisory Panel, and fine-tuning the questions with the help of survey experts based at the University of Cardiff.  College members will be given two weeks to complete the questionnaire online, which should take no more than one hour. In March, the EI Knowledge Team will start to draw up a report developing a clear narrative from the conclusions and identify strong or surprising messages. The report will be reinforced with relevant industry statistics and will cross-reference energy policy proposals featuring in the party manifestos for the 2015 General Election. The report will then be published at a suitable time in the weeks following the election, and its findings will be communicated to EI members, government, and the public.

I can’t over-emphasise the importance of EI members’ participation in bringing credibility and prestige to the Barometer report. We are determined to ensure that the report picks up members’ views, 600 in all, right across the EI. In practice, this means that we’ve refined our random selection in two ways: first by making sure that we meet quotas for Fellow (FEI), Member (MEI) and Graduate (GradEI) members to ensure that the perspectives of both seasoned industry experts and future energy leaders are captured; second by ensuring that we get equal contributions from those who have elected to receive Energy World and those who have elected to receive Petroleum Review magazines.

If you have not received an invitation, you have not lost out. The College will have a two-year rolling membership with half the members replaced annually so that we combine an element of continuity with an opportunity for a wide range of EI members to contribute. This year’s invitations will be for a mixture of one-year and two-year memberships – in 2016 a further set of invitations will go out and you may well be on the list.

People who are not College members can also join activity on social media to discuss potential questions and important topics as well as debate the report findings – join in the conversation now @EnergyInstitute #EnergyBarometer to help form the questionnaire.

This is an exciting initiative in what will be a critical year for energy policy. Please join in and make your voice heard.

An audit for audit’s sake doesn’t make for good practice

Louise Kingham OBE FEI

Louise Kingham OBE FEI

You could be forgiven for struggling with the DECC’s published guidance on ESOS as it’s not an easy read but, in the Department’s defense, the devil is always in the detail so DECC is obliged to set it all out.

The EI, as a supporter of ESOS with resources to enable its implementation, has produced a simple guide to help senior executives of companies that must comply with this new mandatory scheme to complete energy assessments and identify energy savings opportunities. Broadly speaking, if your UK business has

1) 250 or more employees
2) an annual turnover of more than 50M Euros and
3) a balance sheet of more than 43M Euros

you and any other UK organisations will need to comply. There are nuances to all of this so it’s worth reading the detail or contacting DECC for advice well ahead of the end of this year.

Compliance requires you to estimate your total energy consumption and audit the areas of most significance for a report which is signed off at company board level and lodged with the Environment Agency.

Now that’s where compliance stops and good practice starts. Why? Because it’s good for the bottom line and can turn loss into profit, it’s good for the environment and demonstrates the social pledges companies can make and the benefits that can be passed onto the customer. So don’t stop at the filing of the report, don’t even stop when you celebrate the first year’s energy and financial savings. The clue is in the title – energy savings opportunity scheme….