Control over the £125 million raised via the ECO (Energy Company Obligation) in the West Midlands should be handed over to the region’s mayor to help set up a network of pioneering Energy Innovation Zones (EIZs), according to a new report.
The “Powering West Midlands Growth” study, which was carried out by the Energy Capital Commission chaired by former government chief scientific adviser Sir David King, recommends the establishment of four EIZs in the West Midlands to test and develop low carbon energy projects.
The report, launched at a parliamentary reception on Tuesday night (27 March), proposes that the EIZs would cover areas as big as a whole city within which national regulations could be relaxed to enable new clean energy services and technologies to be tested and developed.
The commission presses Andy Street, directly elected mayor of the recently formed West Midlands Combined Authority (WMCA), to explore with government and the major energy suppliers the scope for bankrolling the EIZs over the next five years by devolving control of the regional share of ECO funding.
The report says: “If even a fraction of this were diverted through the WCMA to appropriately specified EIZs, it could provide significant support for clean energy innovation and improve the outcomes of the ECO scheme.”
The funding would be outside of normal ECO rules but still obliged to deliver the ECO carbon target, according to the study.
Areas of commercial opportunity for the EIZs identified by the report include the use of mass smart energy data to optimise city or neighbourhood-wide energy performance and new services emerging around the electrification of transport.
It predicts that the clean energy has the potential to create the Google or Amazons of the future
“EIZs will create platforms to increase the likelihood that these future giants emerge first and fastest in the UK.”
And it says the EIZs could provide a framework to deliver the government’s industrial strategy at a local level, particularly in relation to clean growth.
It also says the EIZs could bolster the competitiveness of the region’s power-hungry manufacturing firms, which increasingly see their growth hampered by inadequate energy infrastructure capacity.
The report urges the government to devolve power to the WMCA to designate the four pilot EIZs by the end of this year.
Street said: “The objective of the EIZs is to reduce emissions in the region and lower energy bills, meanwhile developing local supply chains, creating jobs, skills and markets.
“Delivering clean growth means ensuring we can supply competitive power to increase productivity across our industrial base. It means ending fuel poverty for our most vulnerable citizens, building our existing skills base to grow new industries, delivering our share of the UK’s contribution to climate change targets and creating commercial successes in the energy arena for export worldwide.”
The commission was set up by the Birmingham Energy Institute at Birmingham University.