Utility Week

26 | APRIL 2021 | UTILITY WEEK Customers A just transition is both possible and necessary Comment David Watson, managing director, Heat Trust P rogress on getting to net zero has so far largely been achieved by decarbonising the power sector, and it has had little impact on people's daily lives. As we decarbonise transport and heat this will not be the case. People will be asked to drive less and buy elec- tric vehicles (EVs). They will be asked to replace natural gas boilers for hydrogen-ready equivalents, install heat pumps or connect to heat networks. The impacts will be immediate and visible. The benefits will o en be indirect and deferred. Delivering this will need widespread pub- lic consent, engagement and participation. Only a transition seen by all as being fair and equita- ble will command that consent, engagement and partici- pation. We will therefore fail to make the transition if we fail to make the transition just. But what is a "just transition", why does it matter and how can we deliver it? A just transition starts by using the opportunity of large low carbon investments to create decent work for all. National Grid estimates that 400,000 new roles will be needed in the energy sector. The LSE found that the manufacture of EVs and batteries here in the UK could create up to 80,000 new jobs. The Department for Busi- ness, Energy & Industrial Strategy (BEIS) suggests that innovations in new low-carbon manufacturing technolo- gies could support a further 80,000 jobs. Against this is the fact that many jobs in fossil fuel-related industries will be lost. Many of these jobs are found in specific cities and regions. For example, a significant share of employment around Aberdeen is focused on an oil and gas sector projected to see global demand reductions of 85 per cent and 70 per cent respectively by 2050. Therefore while the net impact of the transition should be positive for jobs, the distribution of the impact will be unequal. Deindustrialisation has already created regional differences across the UK and there is the risk that the energy transition may exacerbate these. Analo- gies to the social and economic impact of coal mine closures in the 1980s are not unwarranted. Creating decent work for all will require national strategies to join up with regional plans like Net Zero North West, or city plans such as those in Bristol where they have big ambitions for heat network deployment. It will require investment in jobs, skills and retraining being targeted at specific areas, tailoring solutions for different geographical needs. Incentivising new low-carbon industries to locate themselves in area most at risk will help. We are already seeing how this can be done with strategic government investments in net zero emissions industrial zones. A just transition would also mean tackling poverty across the UK. The energy transition will create costs and benefits. As we develop our delivery plans, we can ensure these costs and benefits are fairly and equitably distributed. Whilst we know the transition will lead to lower energy costs in 2050 than would otherwise have been the case, it is also true that investments in energy net- works, energy efficiency and scaling new technologies will add cost in the short to medium term. Recovering all these costs through the energy bill would be regressive. As a percentage of income poorer households spend more on energy than wealthier households. They are less able to substitute goods when producers pass on rising energy costs. In extreme cases, rising energy costs may prevent more people from meet- ing their energy needs, exacerbating fuel poverty. Poorer households are also significantly less likely to be able to invest in low-carbon technologies. We can help them through subsidising the upfront cost, and in so doing seize an opportunity to improve their lives. Energy efficiency will improve housing quality and health outcomes. Zero-carbon transport will contribute to better air quality and improve local streets. Heat networks will not simply enable decarbonisation but can contribute to lower heating bills and stronger communities. Finally, a just transition means giving people a stake or a voice in how the transition occurs. We are already making progress here, for example with the 2019 Climate Assembly process. But this is only the start of the public engagement we need to see. An ongoing and meaningful dialogue is needed on the challenge, the journey and the outcomes we will deliver – and what it all means for individuals. This is not just a responsibility for govern- ment, but for all of us as energy professionals. We can start by putting customers at the heart of our planning and delivery. One such opportunity can be seen in the heat network sector today. Heat Trust, the organisation I represent, protects those living and working on heat networks by setting minimum customer protections standards. But as many as 400,000 heat net- work customers still live on networks not registered with us and lack even the basic standards and protection. While the government is committed to addressing this, the design of future regulation is yet to be agreed. A just transition requires that customer voices are represented in this debate, and that the resulting market framework applies to all customers on all heat networks. A just transition is not just possible but also neces- sary if we are to get to net zero. As we debate how we meet our challenge of a lifetime, we must ensure that we put customers at the heart of it all by delivering decent jobs for all, tackling poverty and social inclusion. The benefits will be felt in more than just the energy industry. "A just transition means giving people a stake or a voice in how the transition occurs" Utility Week will explore all th big issues surrounding the UK's heat decarbonisation challenge at it's Future of Heat Conference. For more informa- tion and to register to attend, visit: https://event.networks. online/heat

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