London: Monday, June 9th *
Day 1 started strong and stayed that way. A set of briefings and discussions at the U.K. Trade & Investment offices, a startup company pitch, coffee with Bernie Bulkin from Vantage Point Venture Partners, a trip to the House of Commons to watch their debate on the Climate Change Bill (followed by a visit to the Member’s Pub for a pint), and a reception with a variety of U.K. cleantech leaders. And this was only Monday…
I hope to get the various presentations to post here, but here are the take-aways, which are many. The day’s high-level impressions are that the U.K. faces many of the same challenges as the U.S. Or more precisely, we face their same challenges, but we face it on a much larger scale, are behind on the policy front, and do not have the same utility industry dynamics to rely completely on incentives and market mechanisms to solve our infrastructural challenges. So as much as I am surprised to say it, I am increasingly considering the need for more creative government intervention and funding to help drive some of these necessary changes.
The day started with Adam Brown, the U.K. Trade & Investment team’s Global Cleantech Sector Champion, who briefed us on the challenges and opportunities in the U.K. They need to increase renewables to 20 percent by 2020 (they are currently at 5 percent). They rely heavily on coal and gas for electricity production and are significant net importers of both (from Norway, Russia, and South America). Areas of hopeful gain are on- and off-shore wind, wave, tidal, and increasingly, nuclear energy (although this does not figure into the renewables figure). Of note, the U.K. has already deployed over 2 gigawatts of off-shore wind capacity with another 7 gigawatts in various stages of planning. All this while Cape Wind struggles to find support as the first off-shore wind deployment in the U.S. It is also notable that nuclear seems to face a much smoother path towards new deployments than in the U.S. (currently 20 percent of the capacity of U.K. electricity is from nuclear).
Next up was Nicki Pitts from National Grid, which we know well in New England but which is actually a U.K.-based company with its business and resources split evenly between the U.S. and U.K. She described the market dynamics of electricity and gas industries, and it was apparent that the U.K. has more of a free market dynamic as it relates to the production, distribution, and retailing of utilities (and there are rules prohibiting players from being in more than one segment). This puts the onus on the utilities to manage their quality and profitability, and results in choice for the consumer.
This reinforced the need for rate decoupling in New England
