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Letter from America

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Last year Sustainability First was invited to present to a delegation of commissioners and public advocacy groups from California on the consumer and public interest issues in energy in GB. On a recent trip out there I was able, among other things, to call on reciprocal hospitality and met with Wyatt Lundy of the California Foundation on the Environment and the Economy, who had arranged the delegation.

Wyatt remembered our previous discussion well and said the group were very struck by our cautions around the competitive retail market which they had been keen to explore as a model for California.

We talked again about the Community Choice Aggregation model that is used as a version of competition in a number of states but where the decision on provider is taken at the community level. If the community votes to go with a community provider then all customers are moved across – although individuals can still opt to switch back to the incumbent. When we had spoken last year there were concerns that in California the network rates being charged to these entities were too low and incumbents were squealing. This has now been addressed and so community providers have lost their inherent cost advantage. However they have always pitched on the basis of offering greener energy (with local jobs) and a more socially responsible agenda. On that basis they still seem to be doing well and we discussed how that model was underpinned by the same desire for a democratisation (if not nationalisation) of energy as here in GB. If we are looking at radical models for the future it's worth exploring.

Talking to Wyatt it was also clear that, inevitably, many of the challenges that we are facing with the energy transition are issues for them too. Notwithstanding Trump's withdrawal from the Paris agreement states like California are pressing forward with ambitious goals for decarbonisation of the electricity sector and a focus on electric vehicles, driven in part by air quality concerns. All new homes have to have solar panels which is great for de-carbonisation but Wyatt did admit made tackling the housing crisis there harder as it adds to the cost of new builds.

They are also grappling with how to reform the "net metering" rules that to date have helped drive rooftop solar but, as flagged by Ofgem here, leads to costs being passed on to those who can't afford to participate. To date they have introduced virtual net metering to facilitate community programmes that are more inclusive; required all new net metering customers to be on time of use tariffs and designated certain cost categories as "non by-passable". Again some ideas worth looking at here.

The expected pace of growth of electric vehicles (and indeed autonomous vehicles) was probably the most striking element of my trip. While out there I attended the Global Energy Summit at Stanford University where I caught up briefly with Cathy Zoi who is an old friend of Sustainability First and, in particular, of our dear late colleague Gill Owen. Cathy had spent her career promoting renewables – in the White House and in the private sector - but is now CEO of EVgo working to deliver a first-in-class charging experience and a network of fast chargers. As a part of that she has been drawing on her experience of getting renewables connected to try to agree a checklist of considerations for distribution networks connecting fast chargers

I know it was California but they have autonomous vehicles being tested on the freeway and driving around town. They have a leasing scheme for Uber drivers to rent electric vehicles with dedicated fast charging points. Things are clearly happening apace out there and I had a strong sense that change could happen faster here than we all anticipate. I came back with a note to self to really get on top of what's happening in this space here in GB.

The other big theme for me from the Stanford conference was the focus on the global climate change challenge and the sense of urgency coming out of the IPCC report – what was repeatedly described as an existential threat. The wild fires in California and the melting tundra in Alaska are clearly seen as linked to climate change and are having a real impact on the lives of people in those states.

In particular what hit me was that the reminder that what matters is the cumulative level of carbon in the atmosphere not the "flow" per se. If you take the latest IPPC work on 1.5 degrees that requires us to limit cumulative emissions to a "forever budget" of 2.9GtCO2e compared to current cumulative emissions of 2.2GCO2e. If we continue at the current run rate of global emissions we have 12 more years left before we hit the 1.5 degree scenario with the damaging implications that would have. And after that we can emit no more emissions from any source ever.

While this is encapsulated in the Climate Change Committee approach to setting carbon budgets it doesn't generally feature in the current discourse in GB. We talk a lot about 2050 and potentially moving to net zero. That's important – and some of the radical changes required will take time - but we need an equal and urgent focus on what we can do now. Achieving net zero in 2050 is necessary but the pathway for getting there is just as important. The carbon we emit in the next 5 years will stay up there for around 10,000 years (barring creative solutions) so we need to be doing all we can now to reduce the emissions we produce.

With the challenge ever more urgent Sustainability First's proposal for a low carbon incentive in RIIO2 looks all the more timely, to encourage networks to do all they can to help reduce emissions over the next price control period.

Finally, while out there I was also able to have a number of valuable conversations around access to smart meter data where our PIAG work had highlighted California as one of the leading states. Aggregated data is available to a range of public actors and universities in particular are able to access aggregated or anonymised data for research, with local monthly data routinely published. Some researchers found this useful although it didn't seem to have had the impact I might have expected (with Wyatt for example not aware of the resources available).

However the idea that socially motivated third parties could get customer data easily with the customer consent was seen as an important way to deliver benefits from smart metering. And, through another good Sustainability First contact, I spoke to one successful intermediary who helped manage the consent and other processes on behalf of small social enterprises who didn't have the technical skills or resources to manage it themselves. Our PIAG work has highlighted the potential value of data for local initiatives but also how hard it is to become a DDC "other user". This sort of intermediary model could be the answer.

Maintaining this sort of dialogue – as Sharon did when she went to Australia last year – can help provide ideas and challenge our thinking around what are essentially global problems. We are a small organisation but with friends around the world we can keep challenging ourselves and others on what needs to be done.

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