Utility Week

10 | 14TH - 20TH SEPTEMBER 2018 | UTILITY WEEK Interview arrangements may also be on the cards. This is the point where Labour's wider public ownership push and Whitehead's o-stated passion about decentralisation of the energy system link up. The latter is a topic clearly close to Whitehead's heart. Southampton, where he led the local council before becom- ing one of the city's MPs, boasts the UK's big- gest combined heat and power district energy system. He says balancing electricity demand could be carried out at a sub-national basis, building on the infrastructure developed by the regional offices of the former CEGB. The local step-down of voltages means there is oen no "clear dividing line" between the transmission net- work and distribution networks, which means balancing could be carried out at a city regional level, Whitehead says. Any deficit in supply at the regional level could be balanced out nationally with electricity imported via interconnectors. However, the electricity system is not keeping up to speed with these kind of changes, he says, pointing to how Ofgem's review of network charges will "potentially persecute" local suppliers. "Even if they have effectively private wires or entirely localised generation and transmission supply systems, they will be billed as if every electron is going to Carl- isle and back again, which is patently not going to be the case in future years. That's another area that is becoming dysfunctional." Decarbonising heat Decarbonisation of the heat network poses an even more profound challenge, says Whitehead, who warns that the UK is in "danger of exhausting" what the electricity system can achieve in terms of further decarbonisation. "We damn well need to do something about heat rapidly, because it's lagging so far behind in the decarbonisation process," he says. Whitehead doesn't believe that electrification and hydrogen should be treated as either/or solutions, but that both should be run in tandem with other measures, including greater efforts to manage demand. The UK can buy some time by injecting bio-methane and other natural gas alternatives into the grid, he says, adding that hydrogen is "one of the key arrows in the quiver" in terms of a longer-term decarbonisation of heating, contributing up to 30 per cent of the energy mix. However, relying on steam methane reformation, which is currently the cheapest way of manufacturing hydrogen, doesn't deliver the goods in terms of decar- bonisation because of the amount of carbon the process releases, he says: "Unless you have a really good indus- trial carbon capture programme alongside it you haven't got very far." Using the more advanced electrolysis method of producing hydrogen may be a better bet. The surplus electricity produced at times by intermittent renewable sources is currently a headache for those managing the energy system. "We are spending millions of pounds constraining wind, in particular, because it produces when we don't want it," Whitehead says. Electrolysis could harness this excess capacity and turn it into an asset. "You can produce as much as you want and balance the system by producing hydrogen," he says. "That would help to balance the system long term because it's seasonal shiing and you have quite a lot of hydrogen." All this uncertainty points to a fresh look at the energy system. Whitehead agrees, with a suggestion by Energy UK chair and former Labour trade and industry secretary Lord Hutton that a fresh energy white paper is overdue. He says the previous white paper, which led to the coalition government's Electricity Market Reform, was "fighting the battles of the last war". "People gave a mighty sigh of relief that the market was sorted out, but even then it was changing before our eyes," he says. "Increasingly, the market is going to be one where you put up a lot of capital upfront and then your fuel is effectively free, which itself is going to make a difference to how you price energy." Energy will require a "different form of return on investment than previously was the case", says White- head, who is alive to the suggestion that energy retailing may become more about providing services rather than quantities of energy. Policymakers shouldn't be nervous about facing these challenges, he adds. "It may cause some short- term disruption but things are disrupting before our eyes. It would be much better to go with that and work out where we are going to be at the other end rather than spend time trying to shore up previous positions against that disruption." However, the government is not grappling with these issues, says Whitehead. He says he was "encouraged" by the "change of tone" that followed Claire Perry's appoint- ment as energy minister last summer, pointing as it did to a more open-minded approach in areas like carbon capture and storage, which had been "written off " aer the 2015 general election. But recent decisions, notably the go-ahead for test fracking in Lancashire and the rejection of plans for the Swansea Bay tidal lagoon pro- ject, have seen the government revert to an earlier type. "The roadblocks are the same as they always were and there appears to be no progress in overcoming them. A lot of people are prepared to give the minister a lot of leeway because she clearly appears to be facing in the right direction. It's disappointing that that appears to be running into the sand." One of the biggest roadblocks is Treasury resistance to moves to cushion the transition to a lower carbon econ- omy, Whitehead argues. "It seems we are back to the old problem we had for a long time, which is that inflexibil- ity under the Treasury energy model doesn't allow these things to happen." What he describes as a "pretty dogmatic and inflex- ible approach" was most recently displayed by the deci- sion to axe the feed-in tariffs alongside the mechanism that paid small-scale generators for surplus electricity they exported to the grid. Moves like this will get in the way of the government's efforts to meet the decarbonisation targets outlined in its own carbon budgets because emissions savings will have to be found elsewhere, Whitehead argues. "The Clean Growth Strategy is already in trouble because it's not going to hit its targets and presumes other things would have to happen in order to do so," he says, pointing to what he describes as a "coruscating cri- tique" by the Committee on Climate Change of how the government's plans fall short. His verdict on that? "To start knocking away what would be a number of pillars of the Clean Growth Strat- egy at such an early stage looks to be careless at the very least and wanton at worst." "We damn well need to do something about heat rapidly, because it's lagging so far behind in the decarbonisation process." USEFUL TO KNOW •  Alan Whitehead first  entered parliament in 1997  when he was elected as MP for  Southampton Test at the fourth  time of trying.  He has a long-standing interest  in energy, currently being a  member of the Energy and Cli- mate Change Select Committee  and the chair of the Associate  Parliamentary Renewable and  Sustainable Energy Group. •  Whitehead is not a fully  signed up Corbynite, having  backed the no-confidence  vote in the Labour leader in  the summer of 2016. But  once Corbyn was re-elected  to the leadership, Whitehead  re-joined the front bench in his  old post of energy spokesman,  which he had filled since the  2015 general election  And even though he was an MP  throughout the Labour govern- ment's term in office between  1997 and 2010, Whitehead only  had one junior ministerial job,  which lasted for just a year.  •  The 2018 Labour party con- ference kicks off in Liverpool  on 23 September, where public  ownership of utilities will have  to compete for headlines with  anti-Semitism, Brexit, the  influence of Momentum and  the threat of some MPs forming  a breakaway centre party.

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