Lucy Symons-Jones, director of net zero at Lexica explains why the UK public sector is where clean technology can prove itself before it can be scaled down to serve our homes and businesses.
The energy crisis has highlighted, more than ever, the urgent need to get off of gas and move public sector organisations over to clean energy. Gas prices in the UK have more than quadrupled over the last year- to highs of 180p/th from around 40p/th last September- with prices climbing by 70 per cent in September 2022. To make matters worse, inflation is at an all-time high having risen eight times since December 2021 to result in the highest rate seen in the last 14 years. The Bank of England’s increase from 2.25 to three per cent on 3rd November 2022 marks the biggest single increase since 1989, and puts enormous pressure not only on households struggling to pay their bills, rent or mortgages, but also on the Government itself.
With this perfect storm of economic chaos and energy instability, public sector energy bills will pose a serious problem for Government who still must pay their own gas bills. Liz Truss’s commitment to allocating £2.1 billion to help public bodies to get off gas over the next two years was welcome news. However, following her resignation and the appointment of Rishi Sunak as Prime Minister, it is once again unclear whether these are promises the new Government intends to uphold. To cut Exchequer energy spend and ensure the UK is on track to reach net zero by 2050 – a commitment which was laid out in legislation back in 2019 – the Government must continue to move away from gas and invest in clean heat and energy efficiency for the public estate.
The public sector presents an excellent testing ground for the implementation of new green technologies and the opportunity to explore new ways of heating buildings, using energy more efficiently and generating energy in new ways. Ultimately, clean heat alternatives will need to be made accessible to all of us, but- as anyone who has tried to buy a heat pump for their home knows- the supply chain is not yet there at the scale it needs to be is to get enough clean technology to the domestic market at a cost households can afford.
There is a shortcut to a thriving UK clean heat market and cutting the Treasury’s gas bill to boot. Using the public sector to test out green technology capabilities on a large scale through Government funding will bring forward projects big enough for the green supply chain to take on and prove themselves. An acute NHS Trust with 24/7 demand, across the seasons, gives economies of scale for a clean technology supplier that would take many, many households grouped together to find any equivalent. By investing in public sector decarbonisation, Government could simultaneously tackle the issues of soaring public sector gas bills while also supporting clean technology businesses to find work of a size and scale commensurate with where they need to be operating at to make every UK home and workplace net zero. And this is about efforts to reduce energy demand for our public sector buildings too which can dramatically drop bills. As the Committee on Climate Change said eloquently “Government can lead by example by investing in the energy efficiency of the public estate, demonstrating national and local government efforts to reduce energy demand”.
We are asking Government to back public sector decarbonisation to cut its own energy bill and supercharge the UK clean technology supply chain. Spiralling energy costs have only made the case for investment stronger, the UK Government must maintain its commitment to promises of funding specifically allocated to public sector decarbonisation. Government funding for the flagship scheme (PSDS) has been heavily oversubscribed in recent years and notoriously difficult for public bodies to secure. Decarbonisation projects worth more than four times the value of the available £14m grant offered by Government were pitched in by public bodies, earlier this year.
Size and scale in clean technology matters for the UK’s international standing. Private sector investors from within the UK and overseas will be looking to the UK’s capability to provide clean energy infrastructure when planning new projects. Without a strong commitment from Government to fund green initiatives, investors will look elsewhere.
Committed investment from Government into public sector decarbonisation will be key to reducing the Government’s gas bill, enabling the roll-out of clean energy infrastructure and ensuring the UK is at the head of the pack in the bright green future.