Supporting a Just Transition

20/05/2022

A blog by Amy Ritchie, Sustainability Specialist

Amy RitchieA coupIe of weeks ago, I was delighted to speak at the All Energy Exhibition and Conference at the SEC, Glasgow – held in person for the first time in over two years! 

Taking part in a panel presentation and discussion on Just Transition with colleagues from various sectors and organisation gave me a great opportunity to reflect on just how important this is for SP Energy Networks – especially as we look towards a Net Zero future, and more specifically as we look towards Ofgem’s decision on our RIIO-ED2 Business Plan in the Draft Determination that’s expected next month.


What is a Just Transition?

It's broadly accepted that a just transition should ensure environmental sustainability,  decent work, social inclusion and poverty eradication are all given equal consideration as we move towards a Net Zero future. We’re all agreed that we absolutely must play a role in tackling the climate crisis and reach our Net Zero targets (that's why we're leading by example with our own Net Zero target of 2035 for our business), but there are multiple different ways that we can approach this challenge.

A just transition is about making sure we approach it in as democratic, inclusive and fair a way as possible. It focuses attention on the need to anticipate the social implications of the shift to a low-carbon economy and the increasing impacts of climate change and is about making sure that social issues are considered in addressing what, on the face of it, is an environmental issue.

Climate action + social inclusion = the Just Transition


What role do we play in enabling this for the communities we serve?

As a Distribution Network Operator (DNO), our role will become ever more central in enabling decarbonisation, whether through facilitating network connections, planning for the future, or serving our customers - particularly the most vulnerable. As the only DNO group to operate across all three governments in GB (UK, Welsh and Scottish), alongside city regions and local authorities, we understand the diversity of challenge ahead – and that there is no ‘one size fits all’ solution.

Although the Just Transition can be discussed in broad terms, we believe that there are three main frames of reference, from the lens of our role and the wider energy sector:

Economic impact: 
Economic improvement through the energy transition is, to us, the primary issue in respect of a Just Transition. Delivering economic opportunity and growth, such as new jobs and supply chain growth, will drive greater prosperity in the communities we serve, particularly those that suffer from extremes of urban and rural poverty.

Place: 
Our licence areas cover diverse geographies and include urban centres as well as rural areas. A Just Transition requires different solutions depending on the circumstances of stakeholders in different locations. For example, we know that the market is unlikely to deliver public EV charging in low traffic, rural areas, so we've included proposals to ensure rural communities can access public charging.

Inclusion: 
As a network operator, we can use our understanding of our customers with close collaboration with local stakeholders to support an inclusive approach to the Just Transition. We will do this directly through our Vulnerability Strategy, where we'll best support vulnerable groups in the energy transition. And we can also do this through partnership and collaboration - this is one of the reasons we've created our first Community Energy Strategy for RIIO-ED2, to support community anchor organisations who can inform us and other stakeholders on local needs, as well as help to deliver network innovation or energy efficiency schemes.


How we're planning for a Just Transition in our RIIO-ED2 Business Plan

We have put forward a suite of ambitious initiatives in RIIO-ED2 (including 100 specific business commitments), with the Just Transition at the centre of these outcomes. 

Through our RIIO-ED2 Business Plan, we aim to create new jobs and economic growth in our communities, both directly and in our supply chain. We will also endeavour to form inter-sector partnerships and collaborate to manage long-term issues where responsibilities might overlap, such as Net Zero, public EV infrastructure rollout, and consumer vulnerability.

We will advocate for a Just Transition where, for example, this may require changes to policy or legislation. We will look to facilitate change and 'do the right thing' in areas even where formal responsibility might lie elsewhere – like pushing government to address issues of equity in access to low carbon technologies.

For example, our stakeholders have told us that the issue of ‘who pays’ for Net Zero is an issue that needs to be addressed at a industry level. In this respect, it’s not within powers of network companies to change the structure of our network charges, however within our RIIO-ED2 Business Plan, we aim to provide substantial support to low income consumers and help them take advantage of the energy transition. We also seek to minimise costs by robustly testing our plans for accuracy and efficiency, publicly reporting on our progress annually.


Creating our Just Transition Strategy

A Just Transition is both a process and an end goal - it needs a framework and approach that ensures ownership and transparency. This is why we’re engaging with the Scottish Just Transition Commission and other devolved stakeholders to ensure that principles set at a national, and even global, level are embedded in our approach as an organisation.

Going forward, we will ensure executive-level responsibility for our plans to support a Just Transition. In our RIIO-ED2 Business Plan and Just Transition Annex, we set out the key building blocks of our approach to delivery and have committed to publishing our Just Transition Strategy by the start of RIIO-ED2 in 2023.

We’ll launch a consultation on our Just Transition Strategy later this year to meet out commitment of publishing a full strategy by the start of RIIO-ED2, but in the meantime we’d love to hear from you if you have any thoughts – you can get in touch by emailing RIIO_ED2@spenergynetworks.co.uk

Finally, as we look towards Ofgem’s Draft Determination on our RIIO-ED2 plans in June – we’ll continue to work constructively with our stakeholders and the regulator to make sure that everything we do always has our customers’ and our stakeholders’ need at their heart.

Amy


About the author

Amy RAmy works in our Sustainability Team developing our role in delivering a Net Zero energy system and working with stakeholders to integrate aspects of social and economic sustainability across the business. Prior to joining SP Energy Networks, she led the Association for Decentralised Energy’s work on low carbon heat policy, and has a range of experience in renewable energy and sustainability projects across the private and higher education sectors.

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