Comment by Andrew Clark, Business Leader – Place and Katrina Young, Practice Manager – Heat Policy and Local Energy, at Energy Systems Catapult.

The newly elected Labour government has committed to creating Great British Energy (GBE) with the aim of cutting energy bills, bolstering energy security, and making Britain a clean energy superpower. The Catapult sees the creation of GBE as an opportunity to drive impactful place-based change and investment by incorporating Local Area Energy Planning (LAEP) into its funding and decision-making processes.

A place-based approach to achieving Net Zero costs less and leads to greater societal benefits than a place-agnostic method. To help ensure every area in the UK can equitably transition we need to level the playing field by rolling LAEP out nationwide. This would provide each local authority area with a costed understanding of what changes need to occur to deliver a Net Zero energy system, ‘where’, ‘when’, and ‘how many’, and give national government a clearer picture of what support and investment is needed, aiding the equitable allocation of funding.

The Catapult estimated at the end of 2023 that a one-off cost of around £40 million would fund a LAEP for every local area (which doesn’t currently have one) – including a support facility to guide the efficient roll out of plans (which would be supported by GBE, the Net Zero Hubs in England, and appropriate approaches to be agreed with the devolved administrations). This is a drop in the ocean compared to the cost of inaction.

Stories of success are plentiful. Places like York, Westminster and Greater Manchester are turning their LAEPs into action, developing business cases, projects, and initiatives to leverage investment for implementation. In Wales, Welsh Government is finalising a major LAEP programme to ensure that every part of the nation has a plan in place. This builds on the work carried out by the Catapult in 2015 when Bridgend County Borough Council became one of the first three local authorities to have a LAEP delivered. And across the Irish Sea, Belfast City Council has set the standard by becoming the first local area in Northern Ireland to produce a LAEP.

The value of LAEP is clear. Across the UK, from Cardiff to Croydon, Ceredigion to Corby, over 100 local authority areas – nearly 30% – now have a LAEP or are working towards one. With many local authorities pushing ahead with a LAEP, we risk creating a two-speed approach to decarbonisation, with those who can afford to produce a LAEP doing so, with others being left behind. This is a worst-case scenario, but one that is easily avoidable if we endorse and fund a national LAEP programme.

The sums around Net Zero may look eye-watering at first glance. With a good mix of public and private sector investment it can be achieved. There are plenty of investors out there with the money and willingness to invest in credible projects backed by evidence. LAEPs provide a crucial and robust evidence base to increase confidence and help to de-risk investment.

To unlock investment in low regret projects, LAEPs need to be of a consistent high standard, and underpinned by robust analysis. This is an expectation of the distribution network operators (DNOs), private investors, and local authorities. The Catapult quite literally wrote the book on LAEP guidance to provide a common standard and approach. GBE’s investment in local energy projects could be informed by whether or not a local authority’s LAEP meets this expected high-quality standard. This would ensure comparability and consistency across the UK, whilst providing investors with the confidence they need to write a cheque.

Once places have a LAEP, they need support to attract private investment for the delivery of priority Net Zero projects identified in the plans, such as community energy programmes, local power generation, or neighbourhood heat decarbonisation projects. This is likely to be a crucial role for GBE. GBE can help de-risk investment and bridge the gap between ambition and capacity and accelerate the pace and scale up of local clean energy projects.

Once the Regional Energy Strategic Planners are in place, the high-quality LAEPs enabled by GBE can be aggregated up and facilitate faster and more efficient delivery of regional and national clean energy infrastructure, underpinned by local evidence. By funding and supporting every area to have a LAEP, GB Energy will ensure every place has a voice in the clean energy transition.

To make place-based decarbonisation an affordable reality for local authorities, we’d like to see GBE funding and supporting LAEPs for every area that does not already have a plan in place. GBE should then use such LAEPs to identify priority Net Zero projects to support, this in turn, would unlock investment and spur on local clean, green growth.

We have an opportunity to make a real difference to communities up and down the UK if only we’re brave and bold enough to take the LAEP.