Comment by Dinesh Mattu, Energy Policy Adviser – Markets, Policy & Regulation.

In all the debate about how we get to Net Zero, it is often forgotten that the monumental shift to low and zero carbon buildings will occur at a local level; in the UK’s neighbourhoods, streets and homes. Decarbonising Greater Manchester will be very different to decarbonising Cornwall. But right now there is a gap in the powers and responsibilities that local areas have to deliver many of the ambitious targets they are setting.

So, what do local authorities need to turn their ambition into action? For starters, they need:

• A comprehensive plan. Taking into account the whole of the local energy system (the state of the networks, the building stock, demand etc), the plan can help identify the priority Net Zero infrastructure projects which are needed. Such a plan – we call it a Local Area Energy Plan – needs to employ a common methodology, which aligns spatial and energy planning frameworks and can be compared to and joined up with other local areas.
• Develop genuine partnerships that lead to delivery. This could be by encouraging statutory enhanced partnerships between local government and private regional network operators.
• A communications campaign which targets messaging to local needs, helping citizens and businesses navigate the journey to low carbon buildings.
• Skilled people to deliver the work. Building up skills and training regimes with local supply chains in mind is essential to develop demand and high quality outcomes for low carbon technologies.

Energy Systems Catapult recently published ‘Building a governance framework for coordinated Local Area Energy Planning,’ which explored how coordinated local area energy planning (LAEP) could bring about significant financial benefits on the path to Net Zero. The report set out a policy framework, which would reconcile national strategy and local implementation. It investigated how LAEPs could benefit the national energy system, and highlighted the necessary policy, regulatory and governance arrangements needed across geographic and planning scales.

The research revealed that without effective coordination across local, regional and national geographic scales, and between spatial and energy planning frameworks, the transition to Net Zero will be more costly, less likely, and miss out on wider social and economic opportunities.

Enabling place-based initiatives will require new governance structures and aligning of principles; a challenge which publications by UK100, the Local Government Association (LGA), the Climate Change Committee (CCC) and Regen all highlight too. We welcome these reports as important insights in setting out the nuances, challenges and barriers we also uncovered, agreeing fundamentally that existing arrangements need much greater coordination between government across all scales and more collaboration among energy system stakeholders.

A comprehensive plan

 A common agreement across these reports is the huge challenge of heat and building decarbonisation which will rely on updates to building standards, supply chain development and changes to planning powers to support cost effective place-based approaches. The CCC’s 2022 Progress Report to Government outlines that the current plans for decarbonising heat and buildings “are not yet fully comprehensive or complete,” and that ”significant delivery risks remain for many policy areas.”

However, there are positive steps being made to address this challenge. The heat network zoning framework in the Energy Security Bill for instance outlines how central Government is empowering local authorities to establish and potentially enforce low carbon heat network zones. Enabling such place-based local action on heat is vital. To strengthen the impact, the approach taken should adopt a common whole system methodology (such as LAEP) to allow for a strategic approach across all energy vectors – not just for heat networks. LAEP covers heat sources, building characteristics, transport and energy networks. By using this information local authorities can better focus their limited resources to help align spatial and energy planning frameworks whilst minimising the complexity arising from using multiple methodologies.

Develop genuine partnerships that lead to delivery

There are limited examples of effective frameworks for national – regional – local partnerships with reference to Net Zero. Tied into the lack of a long-term funding structure to support strategic planning, this acts as a significant barrier to local action. More often than not, those local authorities with greater resource are often the ones able to competitively bid and unlock central pots of funding to deliver schemes, meaning funding is not always correlated with need.

A key insight from ESC’s ‘Building a governance framework for coordinated LAEP’ paper suggested a much stronger role for collaborative working between private network operators (who may feasibly operate across regions), Ofgem (operating across national borders), and local authorities (operating in countless ways across districts, counties and regions). We suggest exploring options for statutory enhanced partnerships as a mechanism to deliver placed based low carbon initiatives and support with mutual goals for investment, risk and transparency as applied in the transport sector.

The regulatory mechanisms to enable co-decision-making between local authorities already exist. Joint decision making committees can take account of locally specific needs and context whilst also expanding their geographical coverage to better align with regional network planning and investment. We are encouraged by Ofgem’s RIIO2 draft determinations which acknowledge LAEP as an evidence base in the Net Zero re-opener mechanism, and the proposal to allow baseline funding for collaboration between DNOs and local authorities on LAEP.[3]

A communications campaign

Local authorities have democratic accountability with strong links to the communities they serve. Regen and CCC call for a nationally-developed future homes communications methodology and public energy advice service respectively, which would support local authorities deliver key messages about home decarbonisation to local stakeholders. While we agree with this approach, some homeowners do not expect government to provide this advice. Linking local campaigns to LEAPs can shape strategies with a local focus, while at the same time continuing to maintain a consistent national methodology.

Skilled people to deliver the work

Consumer demand will be required to build the skills and training needs in domestic heating supply chains, which are inherently local. Local authorities are well positioned to engage with supply chains and spur demand but require new frameworks which move away from short-term funding cycles. Our governance framework research highlighted that local heating installers have 2–3-year planning horizons and are often responding to short-term Government grants. The stop-start nature of these grants will not be enough to develop long-term markets which offer the consistent demand required to develop and upskill the assessors, coordinators and installers required for Net Zero. Addressing this issue will require a much more nuanced approach to coordination, using robust evidence-based plans to inform the supply chain and match workforce development to local market needs.

Our work highlights how a combination of comprehensive local plans, strategic partnerships between public and private actors, proactive communications, and development of essential skills can bring the concept of Net Zero to life for local communities.