The Power of Circles
Fuel poverty is a national disgrace in one of the richest countries on the planet, worse for one with our embarrassment of energy riches. There, I’ve said it. It hurts people and we shouldn’t stand for it. I’m not throwing blame around, this is a hugely complex or “wicked” problem that traps us all, including politicians. The lack of progress so far is almost forgivable when you consider the challenges: getting energy demand down and reducing the cost of electricity; increasing local generation, storage and use, and designing it for tenants and communities; designing pragmatic energy management that is affordable for the state, social landlords and their tenants, and whatever the solutions are; making them flexible and inter-changeable for a very diverse Scotland.
Less of the misery tour. I will explore what governments can do next week but it is time for courage and creativity in the housing sector. Whilst it is relatively easy to combine technologies and work the market in new build, if you are serious about climate change and fuel poverty, tackling existing housing is the grail. Social landlords manage over 600,000 homes, have tenants in every region, and bring capital and experience to invest. Does that offer a chance to create something that helps government, the network operators and consumers in all sectors? Of course it does, if there is a will to collaborate and to take some modest, intelligent risks.
You won’t be surprised to hear that the climate emergency has prompted community scale energy innovations across the UK, from Bristol to Orkney, often with housing associations and council landlords taking the lead. I sit on the board of one such initiative, Power Circle, focusing on a fair energy transition for housing and fuel poverty reduction, based on a co-operative model, and looking for members to explore the following.
Combining smart meters and batteries with an energy services company or ESCo, a social landlord can harvest the 600% difference between the market value of electricity at the time of lowest demand (middle of the night) and the highest (6pm), and capture the full value from locally generated green energy, for instance roof PV or community hydro. With battery storage, you can make best use of PV even if you are not around when the sun shines. With a smart local grid and a communal battery you can overcome differences in house type and orientation in mixed estates, and share the energy generated. Value can be shared too, with lower, stable pricing for tenants, and the investment in batteries and PV paid for without impacting on rents. For a social landlord blanching at the prospect of exploring a new and unknown field, risk can be managed through smart energy management, employing expertise to run the business, ideally sharing the ESCo with others, and other measures that bring the risk profile in line with social housing norms.
This is what is possible now, but it also enables aggregation of demand and storage across not just one estate but the stock of multiple landlords. This can help: manage constraints on wind farms; network operators with balancing supply and demand; and take advantage of the peer to peer energy market, all to benefit tenants. Much fuel poverty is found in the private rented sector and owner occupation. This model being tenure neutral can become a community solution, and for those advocates of hydrogen or district heating as solutions, the ESCo model is also flexible around heating systems. With almost every dwelling connected to the grid, we have a universal infrastructure, so we don’t have to dig up every road in Scotland to reach a sustainable future. If I were Nicola, I’d jump at the chance. If I were a social landlord, I’d be on the phone.