Powering Britain: a local, low carbon future

A collection of essays to mark the tenth anniversary of the Climate Change Act.

To mark the tenth anniversary of the Climate Change Act, Energy UK has published ‘Energy and our Environment’, a collection of essays in which leading figures from both the energy and environmental sectors, offer their perspectives on how the Climate Change Act came into force, its influence on the future of energy and the challenges that lie ahead both for the UK and the rest of the world. 

Here we share the contribution from our Managing Director for Distributed Energy & Power, Jorge Pikunic:

Ten years on, it is easy to forget just how revolutionary the Climate Change Act was. The first legislation of its kind in the world, introducing legally binding emissions reduction targets, establishing the independent Committee on Climate Change to advise government and hold it to account. By putting in law the target of at least a 80% cut in emissions by 2050, government policy sent a signal for a low carbon transformation.

In the last ten years the energy sector has been at the forefront of that transformation. Emissions in the power sector have fallen by almost 60% since the Climate Change Act became law. In April 2017, the UK enjoyed its first coal-free day for the first time since the 1880s.

Attention is now turning to the decarbonisation of mobility, and heating and cooling, both of which bring new challenges and will require considered policy responses. However, it is important to understand that the low carbon transition is taking place in a global revolution for the energy sector, driven by three key trends.

The first is the growth of renewables in response to climate change, which has far outstripped predictions; The second is our customers’ changing attitudes towards energy. People want the ability to take control of how much they pay, how they generate energy and how they store energy - as examples; and the third is availability of technology.

New energy technology is enabling customers to generate and store their own electricity in a way that is more affordable than ever before. The growth of digital technology has also been huge and is enabling meaningful insights, including for energy. These global trends have created fundamental changes to the energy system and two areas are particularly interesting.

The first change is the location of energy, which is becoming decentralised as renewable and other distributed technologies are deployed. Large, fossil-fuel power plants that have characterised our energy system for over a century are giving way to smaller, more flexible energy technologies such as renewables and battery storage. The second is the need for flexible power, in a world with far more renewables, far more flexibility is required to maintain the delicate balance of our grid.

As a British company with roots dating back to 1812 this is not the first time that Centrica has seen the energy sector transform. We are at the forefront of this transformation and are working with these current trends to contribute to a decarbonised energy future. Three illustrations from our business exemplify this.

Firstly, we aim to help businesses find better ways of managing their energy, delivering a variety of products from energy insights and optimisation through to comprehensive energy solutions such as on-site generation and battery storage. We can provide businesses with a single view of their energy estate through our digital platform, which enables them to optimise their energy use and open new revenue streams by shifting, reducing or even increasing demand. In addition, our Energy Marketing and Trading business specialises in energy trading for a variety of renewable and low carbon generators, using Big Data to build an accurate picture of energy demand and algorithms to judge weather, predict renewable energy production and optimise utilisation.

Secondly, we are bringing flexibility to the grid through a combination of building our own assets, such as our 49MW Roosecote Battery, and customer projects. Our long-standing relationship with Gateshead Council is a good example of this and has seen the installation of solar PV, CHP and battery storage. These contributions are helping to maximise the generation and utilisation of renewable and low carbon power.

Finally, our pioneering £19m Cornwall Local Energy Market project, part funded by the European Regional Development Fund, is using flexible demand, generation and storage to test how local energy markets could reduce grid constraints and enable connection of renewables. We are developing a virtual marketplace to enable peer to peer trading and access for local energy. The outcome is a glimpse of an energy future that is local, low carbon, and delivers choice.

Ten years on it is fitting to pause, look back, and appreciate how far we have come since the passing of the Climate Change Act. Our sector is looking to the future, and so is Centrica. The challenge posed by decarbonisation continues to motivate us as a company, and has unleashed technological innovation that is transforming the products and services that we offer our customers. Centrica is on track to produce 80% less carbon per unit revenue than we did a decade ago, and enabling other businesses to reduce their emissions. By the time we come to celebrate twenty years of the Climate Change Act, we really will have undergone a transformation.