'Devolve energy policy for a true Northern Powerhouse'

For at least the 100 years, the north of England was the powerhouse of the country.

Even as King Coal’s reign came to an end, the north retained a significant slice of the nation’s generating capacity, mainly through wind and nuclear power.

But of even greater significance is the north’s legacy of skills in engineering, distribution and manufacturing, a strong research base and unique geographical assets.

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Over the past 12 months, the Northern Energy Taskforce, led by IPPR North, has been working with energy stakeholders from across the region to devise a strategy to unlock green growth in the north.

With the right leadership and direction, we believe that our vision to create an energy economy worth £15bn and create 100,000 jobs by 2050 is within our grasp.

Furthermore, we believe that unleashing the northern energy economy is essential to achieving the nation’s climate change commitments and has the potential to deliver affordable energy for businesses and households alike.

The success of the energy sector in the north is by no means guaranteed. While the north has a number of distinctive geographical and geological assets and is home to a range of innovations, these require investment and support.

Our historical strengths – not least our skills base – must undergo a major transition. Patterns of energy production and use are changing fast and our energy systems need to change quickly too.

The national industrial strategy provides a framework within which these opportunities can be seized, but central government can also inhibit progress. Too many opportunities have already gone begging due to policy uncertainty and many other opportunities are best unlocked through local decision-making.

On the same day the government announces its energy price cap and its Clean Growth Strategy, we are launching a Northern Energy Strategy to provide a route map for success with action on three main fronts.

First, with our world-class universities, manufacturers and skills base, we must develop our potential. There is a widely held view that opportunities to gain first-mover advantages in offshore wind were squandered by indecisive policy-making and, more recently, the opportunity to become a world-leader in carbon capture and storage or utilisation technologies is perceived to be slipping away.

The journey from early-stage innovation to full commercialisation and scale-up requires careful navigation with support from public and private players both in Yorkshire and across the north.

This is why our Northern Energy Strategy calls for a new Northern Energy Accelerator to support innovation and co-ordinate investment in partnership with Innovate UK and other national bodies.

National policy uncertainty has damaged investor confidence and has been the root cause of our slow progress as a nation to develop renewable energy.

So secondly, we have proposed that northern leaders strike a Northern Energy Compact with Government, taking responsibility for their part of the national carbon budget (much as Scotland and Wales propose to do) but in return for greater freedoms and flexibilities regarding the regulations and incentives around energy generation.

But perhaps the most exciting energy opportunities lie in our great northern cities. As other developed nations are starting to show, the technologies we deploy in our homes and businesses are bringing energy generation – and energy savings – much closer to consumers and in the UK northern cities have been trailblazing in this field.

Kirklees Warm Front scheme, for example, adopted ground-breaking approaches to financing and rolling-out energy efficiency measures to over 50,000 homes. Meanwhile, Northern Gas Networks and other agencies are working on plans to convert the entire gas grid in Leeds to become the first city in the world to run on hydrogen.

But to really unlock these opportunities, cities like Leeds need the freedoms and the funds to invest in local opportunities. We believe that the combined authority – working closely with business and energy distributors – should strike a local energy devolution deal, giving it control over up to £42m each year in return for responsibilities over local energy efficiency and other community energy schemes.

The ‘Big Six’ energy suppliers have a poor record when it comes to cutting our energy consumption, but give those responsibilities to local leaders and they might use the funding more effectively.

This would also give them a greater incentive to drive up energy efficiency standards on new-build housing too. The Mayor of London has recently committed London to a Low Carbon Homes standard that the government dropped, perhaps Yorkshire leaders should do the same.

Northern energy is a win-win-win: new jobs, lower carbon emissions and cheaper fuel. Price caps will only go so far, it’s time to kickstart the local energy revolution.

Sir John Harman is Chair of the Northern Energy Taskforce.