Innovating across business and regulation for net zero energy

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Emergent is trialling a business and regulatory innovation to help make net zero technologies available to all UK households. To better understand the complex world of innovating with policy Undaunted’s reporter, Franca Davenport, spoke to CEO and founder Reg Platt for Undaunted’s Climate Innovations Up-Close blog series.

The main technologies needed to take UK household energy use to net zero are generally well understood. Solar PV, heat pumps, and electric vehicle chargers all have a central role to play but yet uptake across the country remains slow.

This is not for a want of trying. Several national programmes, such as Feed-In Tariffs and the Green Deal, have tried to accelerate deployment by eliminating the high upfront costs of the technologies to customers who install them but, despite their big vision, none of these policies have enabled the level of decarbonisation that is needed to reach targets. Currently there is no national solution in place and green energy home solutions are only accessible to the relative few who have the money and a suitable property.

Lessening inequalities in access to net zero tech

Emergent CEO and Founder Reg Platt

Coming from a regulatory and political background, with experience championing energy efficiency and electricity market reforms, Emergent CEO and Founder Reg Platt (pictured, left) was aware of the need for a new approach. “To drive technology uptake, customers need funded solutions,” he says.

“But achieving a stable subsidy incentive framework is nigh on impossible because the costs are too high and the context is too politicised. The electricity market is fundamentally ill-designed for net zero and for this reason we need innovation in regulation and business, not just technology.”

Central to Emergent’s ethos is the reduction of  the divide between those who can and those who can’t benefit from green energy. “There are already massive inequalities in consumer outcomes from energy, seen vividly in the differential impacts of current price hikes,” comments Platt. “Add to this the current position where richer households can manage their energy costs by investing in a solar system with demand response and battery technologies, but the majority just can’t fund the basic technology, and these inequalities are only going to get worse.”

“The biggest design flaw of the energy system is not that it’s supply focused and centralised. It’s the lack of adaptability. Big policy initiatives are important – but too often the low hanging fruit offered by small tweaks to existing industry rules are overlooked. Vast quantities of value can be unlocked for negligible cost if you just know where to look.”

Reg Platt, CEO and Founder, Emergent

Solar PV for flats

A clear example of an opportunity that is currently held back by the system is the retrofitting of solar panels to existing blocks of flats. Currently any solar PV system would be plugged in behind the landlord’s meter so it can only supply communal facilities such as hallway lights rather than directly providing energy to the flats themselves. Since communal facilities use little electricity and demand tends to increase at a time that does not match solar supply, there are minimal savings to be made, and any gains that do occur only benefit the landlord.

The network before Emergent's solution for solar PV on flats has been implemented
The network before Emergent’s solution for solar PV on flats has been implemented
The network after Emergent's solution for solar PV on flats has been implemented
The network after Emergent’s solution for solar PV on flats has been implemented

Emergent have devised an approach that installs a single meter before that of the landlord meter, making the wiring of a block of flats into a private network microgrid. This enables the solar-generated energy on site to be sold at low cost to residents.

Having gained interest from Nottingham City Council, Platt took the idea to the Imperial Climate Accelerator in 2017, which helped the company begin work on the complexities of how to commercialise the model. “The faith they showed in us at that point was vital,” he says. “I just sensed that there was absolutely no question their primary goal was stopping climate change and they had the foresight to see what is needed for this to happen.” 

Emergent's Solar for Flats solution in place
Emergent’s Solar4Flats solution in place

Further interest followed from Gateshead and Brighton councils, leading to nine pilots being delivered on housing estates. On the back of this success, in 2019 Emergent put together a consortium and bid for support from Innovate UK, receiving £2 million in grant funding to develop the approach. An integrated business model solution began to take shape, involving installation of specialist smart metering hardware, bespoke billing solutions, ongoing customer support, regulatory advice and financial reporting.

Innovation addressing energy regulation

It was through these projects that Platt became aware of a regulatory barrier that was hindering their model by restricting the way in which microgrids could be operated. The regulatory stalling point is embedded in the Balancing and Settlement Code and prevents any customer who is connected to a private network from switching their supplier. Not only does this issue result in poor outcomes for customers, it also results in losses for private network operators like Emergent who want their customers to have this option.

As someone who was very familiar with the regulatory framework Platt developed a creative and cost-effective solution to overcome this barrier.

He approached Ofgem about the issue, and after three years of engagement was awarded the first ever ‘Energy Regulation Sandbox’ to the Balancing and Settlement Code, providing Emergent with an opportunity to demonstrate the new solution live in the market. The company has now received a second similar award, relating to electricity distribution arrangements within the industry “Transformative outcomes for the energy market can be achieved from bottom-up regulatory changes if we innovate regulation the same way as you innovate within a business,” says Platt. “You have to test, demonstrate outcomes, learn, iterate, then repeat the cycle, so you can produce a positive loop of change.”

With its existing projects,  Emergent has a perfect ‘laboratory’ within which to trial the regulatory innovation. Once this has been demonstrated Emergent is then looking to make their full-service solution available for the millions of flats in the UK.

However, the company’s big picture is even bigger with a view to connecting the flat-based networks once they are established and trading between them to optimise the renewable supply. To enable this, Platt has his eye on one other piece of ‘archive legislation’ that he believes could be ‘tweaked’.  “We’ve got to establish our approach,” he says. “And make sure we are delivering in a sound, robust way but we also need to maximise the future opportunities because if we want to stop climate change, we need to go down this route a lot further and a lot faster.”

Climate Solutions Up-Close

Take a deeper-dive into innovative climate technology by exploring other posts in Undaunted’s Climate Solutions Up-Close blog series.

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