A shake-up of energy governance must go beyond splitting up the National Grid in order to avoid potentially stymying the delivery of the infrastructure required to deliver net-zero emissions, a former government adviser has warned.
At a briefing organised by Energy UK last week, Josh Buckland, who was a special advisor to ex-business secretary Greg Clark before leaving government to become a director at public affairs company Flint Global, said the government should go beyond Ofgem’s proposal to split out the Electricity System Operator (ESO) from National Grid.
He said: “The ESO is vitally important but not necessarily the most important part of the energy system governance framework. You have to institute a framework with a clear and single outcome, which is delivering net zero by 2050.”
Arguing that the existing division of functions between Ofgem, the ESO and government is too “fragmented”, Buckland said: “The real opportunity is to reorient governance to ensure a more co-ordinated and consistent approach to delivering change.”
He told the Energy White Paper briefing that the aim of this reform should be to ensure a better balance of democratic legitimacy and delivery for thorny decisions about phasing out certain technologies and deploying low-carbon alternatives.
“Without that governance framework in place, we will stymie delivery potentially and lead to costs being significantly higher.”
As an example, he cited any move to increase hydrogen production, which would rely on a more co-ordinated approach across areas as diverse as domestic heating and power generation.
He added: “It cannot be delivered in a way that is coherent and at lowest cost in the current institutional framework.”
He also warned the government to tread carefully before making any moves to encourage households to switch from gas heating by making it more expensive.
While people need economic incentives, such as potentially removing policy costs from electricity bills, this should not be at the expense of cash-strapped gas consumers, Buckland said: “I don’t think that should start by ladelling costs onto gas because from a fuel poverty perspective, the worst thing we could possibly do is make gas considerably more expensive for people who rely on it, especially in the winter months.
“The thing to do is to make the low-carbon alternative cheaper to give people an economic incentive to shift in that direction.
“There is definitely a role for carbon pricing at a domestic level but we need to be very cautious given the impact it will have on some of the some of the most vulnerable in society.”
He noted that the political consensus for tackling climate change is “stronger than ever” and certainly compared to when he was an energy advisor at No 10 Downing Street between 2014 and 2017.
“All the parties are chasing the green vote and you have a prime minister who is personally determined to prioritise the green agenda. Some will say that it is relatively late to convert to the cause but it is real and tangible.
“It is not just driven by pure political expediency, it is clear that climate change is becoming part of its wider economic and social platform.
“Net zero is now core to the government’s political and economic agenda. There’s a bit of a backlash from Conservative MPs about the degree of focus but the direction of travel is absolutely clear.”
However, he said that the white paper had parked some of the difficult challenges on energy that it must now address by translating its ambitions on net zero into detailed policy.