Sir Ed Davey on the future of community energy

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Last month saw a significant addition to the Mongoose team, with Sir Ed Davey, former Secretary of State for Energy and Climate Change, joining us as chair. During his time in office, he very much backed community energy initiatives, saying he wanted ‘to see a community energy revolution‘ and launching the UK’s first community energy strategy. Last week, at the start of the UN’s COP21, we published his hopes for the convention COP21. Below are a few of the additional questions we asked.

How do you see the elimination of key subsidies affecting Renewable and Community Energy over the coming years, and what do you think we can we do to guarantee that Renewables get the deal they deserve?

It was my policy to eliminate subsidies over the coming years – that’s not the issue. Green energy costs are coming down, so within a few years many forms will be competitive, even faster if the logic of a proper carbon price were to become a political possibility internationally.


The ‘mistake’ of the new Conservative Government is to believe one can just stop support for such new technologies overnight. For not only are these ‘subsidies’ really a form of proxy for a carbon price while we don’t have one, they are essentially a form of support for research, development and deployment of an emerging family of technologies. To axe such support in the cavalier fashion they are showing is economic and climate madness.

And indeed the reason I say ‘mistake’ in inverted commas, is because I suspect it’s all intentional by Osborne: renewables are being too successful, and the only way to stop or delay their impact is to switch subsidies to gas and nuclear. 
 
In the short term, to help Renewables, we need to point to our 2020 legal obligation to develop renewables under the EU Renewable Energy Directive (and vote to ensure we don’t leave the EU!).

I’d like to think we could have a rational debate but we have to remember this is all part of a rather dramatic shift in power and money between fossil fuels and low carbon, to be played out over the next 2 to 3 decades. So to get the deal renewables deserve, we mustn’t be naïve.

What would be the markings of a more prescient Renewable Energy policy?

One that looks hard at the potential for cost reductions and continues Coalition policies to bring those forward as fast as possible. One that invests in R&DD for everything from storage to electric cars to tidal lagoon power. One that values so-called “system costs” fairly, for every technology (HMT/DECC is about to penalise renewables by a partial evaluation of systems costs), and includes carbon costs in that evaluation. One that understands the flexibility of onshore and offshore wind for the system.

Above all, we need a policy takes a medium and long term approach and is ready to anticipate likely key innovations like lower cost storage.

What motivated you to become Mongoose Energy’s Chairman, and what you’ll be able to bring to the table now that you’ve joined the private sector?

At my first meeting, it was evident that Mongoose is seeking to fulfil the ambition I had for the sector as Secretary of State – to expand community energy in the UK rapidly, fostering and enabling communities to get involved in the renewable energy transition, whether motivated by tackling climate change or by the need to tackle fuel poverty or by other aims such as democratising more of our economy and society.

Now I’ve returned to the private sector after 18 years in Parliament, I hope I can help Mongoose as it expands and develops its strategy – whether it’s in power generation or local energy retail or beyond. I’m an economist by training, was a management consultant before getting elected and have specialised in economic, business and energy policy during my time in Parliament, so I hope that unusual combination can complement the talents, experience and specialisms Mongoose already has. I’ve a lot to learn about the grassroots, investor and installer side of community energy, but I hope I can bring some challenge, some ideas and perhaps some political savvy.

What role do you see Community Energy playing in the UK’s energy future?

Much bigger than Whitehall, Westminster and the wider industry currently expects! It’s difficult to quantify but it’s already clear that distributed power is growing fast – and the collective element of that can only grow.

But as I set out in the CE strategy I published at DECC, I see CE as far broader than power – for instance, I think it’s a natural fit when it comes to renewable heat. 
 
But CE can only grow and max out with proper political support – but the sector has to earn that. In harsher times, especially, the sector itself has to prove to DECC and HMT that it represents value for money.

I’m convinced we can – but we have to be more rigorous about that proof. We have to show, for example, that with local supply and reduced transmission, we can unlock value for communities and the wider society.

What would you say to someone who is still on the fence regarding Community Energy and Renewables?

Why?’ But seriously, I’d say ‘go see’. Talk to people involved. Don’t expect a silver bullet – but appreciate not just the MWs, but see the local financial and social capital that’s created. Sense the dedication and commitment and imagine the potential if that can be unleashed more widely. And if you still don’t get it, go read the 5th Inter-Governmental Panel on Climate Change and then think.

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