Town-scale trials needed to end ‘total paralysis’ on heating

Town-scale trials are needed to end the energy industry’s “total paralysis” on the decarbonisation of heating, the founder of Greencoat Capital has argued.

While conceding that the costs may run into the “hundreds of millions of pounds”, managing director Richard Nourse said the bill would be “pretty skinny” when compared to the amounts that must ultimately be spent to address the issue.

“Half the world thinks it’s going to be electric and half the world thinks it’s going to be hydrogen,” Nourse explained during a panel session for Utility Week’s virtual Build Back Better event.

“I actually doubt it’s going to be hydrogen heating. I’m quite strongly thinking it’s going to be electric, mostly. But what I’m really keen to do is be informed about this and actually start to have some experiments – town-scale experiments.”

He continued: “At the moment, we’re in total paralysis and I can’t see much evidence that we’re going to be any more knowledgeable about what the drawbacks are; what the good things are; what are the things that we didn’t know that we didn’t know and all the rest of it; unless we actually start to do it.

“Pick a few towns, do a few things and let’s get going with a multitude of different solutions. … We have to make that leap now. The time we have available is not enough otherwise. We need to get started.”

Nourse said ministers and regulators also need to “start to let the money flow” for the electrification of transport: “It seems reasonably obvious that the electrification of vehicles is what’s going to happen. I think it’s a no regret decision to start to make that happen.”

His comments echoed those of Northern Powergrid chief executive Phil Jones who had earlier disputed the description of network reinforcements to accommodate electric vehicles as anticipatory investment: “Other than repairs and breaches to obligations, all investment is anticipatory to some degree… The only issue is how far-sighted you can be.

“I would say now, for example, reinforcing for electric vehicles is not anticipation ahead of need.”

Jones said its “hard to imagine” that these investments would be wasted: “I don’t think that’s anticipatory at all. I think it’s just in good time and good order.”

He also discussed Ofgem’s ability to run the reopeners and other uncertainty mechanisms which it plans to make greater use of as part of the RIIO2 price controls.

Jones said the mechanisms utilised to date have become “mired” in detail and complications, adding that “no one thinks they’ll work” at the scale proposed by the regulator for the next set of price controls.

“There’s conversations happening right now around how those things need to be designed so they can as automatic as possible,” he said. “There’s a balance to strike and it’s not going to be easy.”

Jones said he does believe Ofgem can succeed but cautioned: “I think it will need a lot very careful work and it could be done very badly if it’s not approached properly.”