Historic merger set to drive UK decentralized energy momentum

The UK’s Association for Decentralised Energy (ADE) and the Association for the Conservation of Energy (ACE) have announced their decision to merge. The announcement was made at the ADE’s annual conference at the Crystal, London.

Speaking at the event, ADE director, Dr Tim Rotheray, told the gathering of industry professionals, “The board of ADE and the Association for the Conservation of Energy are to merge and become one organisation. This has come about after a 12-month discussion. The decentralised energy sector is developing at a rapid pace, bringing to market a myriad of energy solutions which are increasingly offered as a suite of products tailored to each customer’s needs rather than technology-driven approaches. This shift is also being seen in Government policy, with the Clean Growth Strategy and Industrial Strategy revealing how this user-led focus is now seen as critical in achieving its low carbon ambitions. In a rapidly changing world moving more to solutions based services, bringing these two organisations together gives members a stronger voice and better representation. It’s a more powerful and unified voice across the industrial, commercial, public and domestic sectors.”

Dr Joanne Wade, CEO of ACE told the assembled, “We are excited about how our collected resources are going to deliver even greater representation and a powerful voice in supporting government to realise its decarbonization ambitions.” The merged association will be known as the Association for Decentralised Energy with Dr Tim Rotheray continuing in his role as Director. ACE CEO Dr Joanne Wade will take the role of Deputy Director. The well-established research activity at ACE will continue to be offered under the ACE Research brand. “Our collective resources and expertise in energy efficiency, demand side energy services, combined heat and power and district heating will deliver even greater member representation as well as supporting Government in realising its decarbonisation ambitions,” added Dr Wade. “I strongly believe that an organisation that represents the suite of products and services that can be brought to bear at an energy customer’s site to manage costs and cut emissions has the potential to be a powerful advocate.”

The merged organisation will represent nearly 150 members. Dr Rotheray said member feedback on the merger had been positive with many members stating the merger aligned with the strategic choices being made within the energy sector. Speaking to Decentralized Energy on the fringes of the conference, Rotheray re-iterated why the merger is a logical step forward. “The ADE AND ACE have been working together for a while and it came up as an idea, and its an excellent way to create this singular voice for the energy customer from domestic right through to industrial and everything in between.”

The ADE chief believes the empowered prosumer is the future, and this will be just as evident in the decentralized energy sectors as elsewhere. “The thing I think is really interesting about the decentralized energy transition is not about the size and not about whether we’re connected to an 11 Kv line. It’s the people, the people that start to become engaged in the system. We’ve gone from a situation where the energy customer was completely passive and not expert to finding ways to enable them to participate. You talk to an energy customer, they’re not really interested in supply or demand or heat or power, they’re interested in cost effectively being comfortable powering their activities and having mobility. When you talk to the companies who are members they are going in saying, we can provide you with demand response and provide you with efficient lighting and building insulation, rooftop solar and CHP and we can put this together as a package. The whole thing meets your energy needs and you get value from participating in the energy system from flexibility services. That for me is what makes decentralised energy interesting, that’s what defines it – user participation.”

Dan Osgood, Director, Department for Business, Energy and Industrial Strategy had earlier stated that the British government’s ambition was to derive between 17 and 24 per cent of the country’s heat from district heat networks by 2030, from the present rate of 2 per cent, as part of its drive to decarbonize the country’s economy.

The recent high-profile reference to energy efficiency in the government’s Industrial Strategy announcement has added to the momentum, and the newly bulked up ADE is part of an overall response by the industry in terms of establishing its leadership credentials and contribution.

That national ambition on heat decarbonisation requires a multi-pronged approach by the ADE in how it influences the way ahead.

“The heat system that will emerge is still not totally clean. The cost effectiveness of decarbonization predominantly through electricity or through a combination of hydrogen and bio-methane is still up for debate, but whatever you do you end up with 17- 24 per cent district heating. What really matters with that number is we are talking about a step change, going from an on the edge infrastructure to something that is central to government ambition to decarbonizing the UK economy and to decarbonizing heat in cities.”

There is a dual focus to the current heat task force, whose report is due out at the end of January. Firstly, ensuring the risk associated with investing in heat networks is reduced in the same way as it is with water, gas and power networks. Secondly ensuring customers get a good deal. The fact that decentralized energy, through the government’s top strategic document, is now front and centre in its plans, rather than its previous status on the periphery, has put the onus on the ADE to develop its leadership potential. The theme of this year’s conference, Inspiring Leadership, shows how mindful they are of that crucial role.

“The industry has an opportunity to demonstrate leadership,” says Dr Rotheray. “We can show that ambition. We are going to need government for necessary market interventions to ensure investment in different networks is equitable, but the industry has to ensure that we can build networks that are consistently high quality and reliable. We know we can ensure the customer experience is consistently good. The work we do as an industry, the reason we set up the Heat Trust, the reasons we are developing a compliance scheme for district heating, the reason we are developing a code of conduct for demand response is all about the industry saying, ‘we have a responsibility as an industry to lead and ensure we have a good reputation. If we can give the government confidence that we are a well-regarded industry that delivers for customers, it will give them the confidence to perform the right interventions and create the environment for people to invest.”

Much of the recent growth in influence for the association came about during the tenure of energy secretary Ed Davey in his time in the previous coalition government. A growing awareness of its financial rationale strengthened the claims of the country’s decentralized energy industries to be perceived as a source of pragmatic solutions for decarbonization.

“There is an interesting journey the government has been on since the carbon price floor was introduced. That caused the Treasury to look at heat because, in effect, it combined heat and power and led the Treasury to ask what is the government policy on heat? That was the trigger for government to really start to look at heat. We then actively engaged with government and showed them heat networks in other countries like Denmark and Sweden. What was massively important was understanding that district heating is heat source agnostic -previously the belief was that district heating is gas-fired CHP. That has a massively important role to play but if we are to get to a zero-carbon heat system we either have to decarbonize that gas or find other sources. My expectation is we will do a bit of both, but understanding that district heating could be zero carbon was the first breakthrough, which happened under DECC.”

While gas has a bridging and reliability role, the government’s fifth carbon budget saw true recognition of the need for a focus on heat. After discussions and strategies led to practices of coal reduction and renewable energy proliferation, the subject and importance of heat eventually came to the fore, and it has opened up a wide debate the ADE and its partners are fully focused on, in its task force activity.

Since that realisation dawned the granular detail of associated challenging questions are now being addressed, be that system integration, power demand, how to decarbonize the power system and what increasing power demand for heat causes, how to decarbonise the gas system, what the cost implications for hydrogen and biomethane are, and so on. Now that the ADE and ACE have pooled resources, the crucial research aspect needed to bolster leadership and inform government is in full swing. It is hoped that not just government, but municipalities and companies stand to benefit. The Industrial Strategy and its core message on job creation and innovation is an essential influence.

“The government has now announced three times that it is going to have an industrial energy efficiency scheme. That is extremely important. If we are going to retain business support and activity in the UK, they need to be both cost competitive and decarbonised and energy efficiency is a massively important way to deliver that. The exemptions given to business from energy costs are important and helpful but without anything else is not enough, we’ve got to find a way of tackling the route cause and the route cause is the amount of energy needed to do a particular activity and the cost-effective way of doing that activity in a low carbon way. The work we are doing needs to link into this Industrial Strategy in terms of how what we are dong can positively influence local jobs growth, local amenities and the social fabric of communities.”

Source: Decentalised Energy