Blog: 26 August 2022 - Sharpe Pritchard, Corporate Partner

Decentralised Green Solutions are the Answer to the National Economic Crisis

There is a national cost of living crisis. Energy bills are rocketing. In 2022, we have seen significant inflation coupled with low growth. This is a global phenomenon. Inflation and low growth is striking across the world with multiple countries experiencing inflation in the double digits. This is squeezing family savings and increasing the costs of living. There are a number of causes of global inflation. The war between Russia and the Ukraine has impacted the costs of fuel and food (both Russia and Ukraine being leading providers of grain). Emergence of economies from Covid-19 has led to increased national debt and adverse impacts on supply chains. Continuing lockdowns in China have led to lower economic growth in the country (a major supplier of cost-effective goods globally).
 
There is a school of thought that some pressure on energy bills could be alleviated by reducing green subsidies and cutting back on the UK renewables programme. This is a false economy as while it may provide some short-term price respite it will deepen our climate difficulties and further enhance our reliance on price volatile oil and gas.
 
Many local authorities have already declared a Climate Emergency. This means that they have agreed to take drastic action to alleviate adverse impacts on the environment and work to achieve net zero. Local authority answers to the climate emergency can be the answer to the country’s cost of living crisis too. This means decentralised and renewable heating and electricity schemes can be the answer to a national crisis. Sharpe Pritchard LLP has worked with a number of local authorities to deliver renewable district heating schemes that create a green source of heating while at the same time creating local security of supply – by way of example look at the Swaffham Prior Project on which we worked (this was the UK’s first village to switch off its oil supply and move to a retrofitted zero-carbon heating system). They also create price stability as the costs of green district heating networks arise from infrastructure and renewables maintenance not volatile pricing of oil and gas.
 
The UK Government has introduced a number of recent initiatives to assist district heating schemes including:

• New regulation from Ofgem through the forthcoming Energy Bill – this will serve to protect customers from monopolistic pricing practices. See the current draft bill here.
• The implementation of heat network zoning which creates areas where entities must join the local heat network – see the current initiative here.
• Funding through the Green Heat Networks Fund – see further here.

Current times are hard for local authorities and people alike. However there is a real opportunity for local authorities to use the wealth of tools at their disposal to build innovative green renewable electricity and heating projects to safeguard their (and their local population’s) energy prices. To support this, Sharpe Pritchard LLP has launched its Green Steves Initiative. This is a series of seminars and papers that bring together local authorities to share best practice. It is a real how to guide of what local authorities can do in achieving net zero. See the website here and sign up for our free webinars to learn more.   
 
Steve Gummer

Partner at Sharpe Pritchard