Blog: Devolution and heat decarbonisation: Lessons from Europe

01 Jul 2020

By Lauren Stabler, Anglia Ruskin University

THE CHALLENGE

According to the UK’s Committee on Climate Change (CCC), achieving Government’s legally-binding net-zero carbon target will require full decarbonisation of all heat in buildings over the next 20 to 30 years. In practical terms, this requires a transition away from natural gas heating to electricity or alternative fuel sources such as hydrogen, biogas, geothermal, and waste heat.

Heat decarbonisation is considered by the UK Government to be one of its most difficult decarbonisation challenges. The scale of change is similar to the UK’s former transition from coal to natural gas heating. However, this past transition was heavily managed by central government via ownership and investments in national gas grid infrastructure, that replaced a fragmented gas industry, and a major programme of boiler replacements and appliance conversion. Could this central steer be replicated to achieve a transition to renewable heating?

MULTI-LEVEL GOVERNANCE: A PREREQUISITE FOR HEAT DECARBONISATION

Evidence from my systematic review of renewable heat transition case studies, conducted for the Department for Business, Energy and Industrial Strategy, suggests otherwise. Rather, a three-tiered governance structure, combined with significant government subsidy, was found to support the rapid scale-up of “low-regret” options such as energy efficiency retrofits, heat pumps, and Combined-Heat-and-Power District Heating (CHP-DH) networks. Government subsidy, on its own, was found to have an insignificant impact.

The business innovation of energy service companies (ESCo) was also cited as a ‘game-changer’ for heat decarbonisation. In the UK, Local Authority (LA)-owned ESCos have succeeded in rapidly drawing down emissions. In the absence of statutory duties and devolved budgets, however, such cases are rare. The aforementioned transition to the national gas network has also historically eroded energy planning expertise and the governing capacity of UK LAs.

The UK might thus rely on commercial ESCos. However, European case studies suggest that even commercially-led heat decarbonisation requires significant steering by local and regional governments.

THE ROLES OF SUBNATIONAL GOVERNMENTS

The case study review revealed a number of essential governance roles provided by local and regional governments. They helped (i) pool resources to invest in low-carbon technologies and energy efficiency measures and (ii) facilitate ‘horizontal knowledge sharing’, such as providing energy advice to private businesses and private households, ongoing dialogue with housebuilders, and energy performance monitoring for buildings in use (see German and Austrian examples in Sections 4.3.1 and 4.3.3).

‘Capacity-building’ (iii) and ‘vertical integration of policy’ (iv) were also considered essential functions of middle-tier governments in particular. ‘Capacity building’ refers to the support offered to LAs such as officer training on energy planning. ‘Vertical integration of policy’ refers to ‘plugging the gaps’ (e.g. in regulatory frameworks or funding) and gathering/feeding back local experiences of national policy reform to central government so that policy can continue to evolve in support of transitions towards renewable heat (see Sections 4.3.3 for an Austrian example).

There is evidence from the UK that the lack of governance structures for vertical policy integration is negatively affecting local governments’ ability to effectively govern a transition toward decentralised, renewable heat systems. Although UK LAs have articulated their need for devolution and greater shielding policies to realise CHP-DH, there has been no intermediary providing a coordinated narrative from LA interests on the need for regime change.

Other “essential” subnational governance functions identified in the review include “supporting innovators in their identification of opportunities and barriers”, “convening”, “translation of information”, “consensus-building”, “mediation”, and “coordination of actions”.

A CASE FOR ENGLISH (ENERGY) DEVOLUTION

These findings suggest that the UK’s transition to renewable heating may very well depend on its ability to improve the capacity of subnational governments and to devolve budgets, responsibilities, and decision-making powers to appropriate levels of government. According to the CCC (2019), “the deployment of low-regret options cannot wait until the 2030s” (pg. 48). As such, the need to restructure UK governance institutions for heat decarbonisation is urgent and should inform the long-awaited white paper on English devolution.

Lauren Stabler is PhD Researcher at the Global Sustainability Institute (ARU), climate activist, and enthusiastic member of my local community.