ESC 6 - The power of the private sector
Media Isle of Man had the honour of being part of Energy Sustainability Centre's recent 'Roundtable' session, organised by MMC and hosted by Capital International Group.
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00:00Question from the table, we've heard maybe some areas where, you know, the government
00:07direction could be improved on, but in the absence of that, do you think it is for companies
00:12in the private sector to be leading the way?
00:15I think there's a huge opportunity for them. Environmental issues and sustainability in
00:21our biosphere, if that's championed solely by environmental organisations or conservationists,
00:26then it's always going to be seen as an environmental conservation niche thing, and my sense on
00:32it, as someone working in a wildlife trust, is that for the businesses around the table
00:37and far wider, this is no longer a nice to do, it's a must do. And I think our government
00:44needs to see this strongly, so that it really elevates what biosphere means, and what sustainable
00:51and what energy, and all these other things mean to the island, because it's absolutely
00:56driven by economic development and sustainability.
01:00In Shipture, in 2019, become the first global insurance company to sign the 1.5 degree plan,
01:08and that's because we saw it as a responsibility of business to start to drive this activity,
01:15and not, as you say, not just environmentalists, and leaving it to everyone else to do so.
01:21Through that activity, and through work that we do with partners as well, Energy Rick Resilient
01:27Services will go out and work with partners to try and help them be more energy efficient
01:33and more mindful of their emissions and such, as time goes on as well. So, through our own
01:43activities and working with customers and partners, hopefully business will drive that
01:50change as well, and then hopefully see governments following suit, because companies will need,
01:57there's going to come a point where companies need to demonstrate to other companies that
02:03they're green and efficient, and some of that might come from energy production, so companies
02:09won't deal with another company unless they've got green energy or a certain level of emissions.
02:16So, I think, in the end, government are going to have to help, because everyone's going
02:21to want to only do business with those people that have the greenest of credentials.
02:26So, I think it's really, it's again another interesting topic and set of challenges.
02:34I think private business is leading the way in many respects, but I think when you boil
02:43it all down, private businesses compete against each other for client, so we're very good
02:52at ploughing our own trough and driving in our own direction. We're not very good at
02:58coming together as a collective to get something done for the greater good. It's not what we're
03:04set up to do, and it's not part of our DNA, and I think we can do more in that respect,
03:12and I think that these conversations and more open engagement with all stakeholders, government
03:20included, we can get more engagement, but we've been on our own journey for the last
03:26five years and longer. We don't actually cross paths very often, and that's because
03:31businesses tend to do their own thing, because they have a mandate to deliver certain ambitions,
03:38and they don't come in and collaborate as well as we could. And actually, in the sustainability
03:44piece, there's nothing to compete against. It's all about trying to create an environment
03:49that is good for everyone. It's quite unusual for that, for those circumstances to align
03:56in business. We might be nice to one another, but at the end of the day, you don't want
04:02my, well you do want my clients, and I want your clients, and that's just the way it is,
04:09and you want my people and I want your people, and we're very, you know, businesses tend
04:14to operate on their own and touch lightly, and this is an opportunity for business to
04:22come together and be much more collaborative, and that hasn't happened yet, and we can do
04:27more to make that happen.
04:29I might just say that two things that I always say to government around what makes the right
04:38atmosphere for doing this right, the sustainability journey and the net zero journey, there are
04:42two things, and they've actually been touched on today. One is targets and years, and maybe
04:48if I pick up your point actually about let's make it 2045, you know, why not make it 2045?
04:53Because the worst that happens is it's 2050 anyway.
04:55Exactly.
04:56You know, and we have the same discussion around the target which has been set by government
05:00for 100% renewable electricity by 2030 is really ambitious, so again, ahead of other
05:07countries, and is achievable, but hey, if we're not there by 2030 and it happens to
05:11be 31 or 32, don't stop. None of these targets are cliff edge things. You're actually taking
05:17decisions that are so long term that it's right to have a target to go for, and you
05:22can maybe make it more ambitious, and the worst that happens is that you don't achieve
05:25it.
05:26But the other thing I say to them is also around don't underestimate, where we have
05:30a great private sector in the island who can do a lot of this stuff, don't underestimate
05:34actually how small a message you can send with simple things, and I can say that by
05:39having the Climate Change Act introduced, having the Climate Change Action Plan, and
05:44having that first island plan, which led to an energy strategy now, that's enough for
05:48us to take the call it did, which is to revisit the Moor Valley and go for it, and give the
05:53commitments we have, and we obviously, as Offshore Wind does, it means spending significant
05:58amounts of development at risk, because we don't know whether we'll get the planning
06:01that we need, but if you set that tone, look at the UK in Offshore Wind, it's a world
06:06leader, and that comes from a place where you really have the Energy Act introducing
06:11that back in 2008. We've got some projects that were awarded in 2010 that won't be up
06:17and running until 2029. That is, it's long term, and for businesses there, I mean I won't
06:23go into how many general elections there have been in the UK between 2010 and 2019, but
06:30quite amazingly, and we discussed this of course at the moment with the announcement
06:34yesterday, we discussed what the implications are for us as a business that has 40 odd percent
06:39of Offshore Wind in the UK. We're extremely lucky because of the consensus for so many
06:45years and into decades about this issue, and about the future energy strategy, and that
06:50is I think what's changed just in the last five years on the Isle of Man, and my main
06:54message is stick with it, because the reward at the end is going to be worth it.
06:59It comes back to framework doesn't it? It comes back to putting out the long term vision
07:05and creating a framework around it.
07:07If I could just come to that. The problem about the 2030 100% renewable electricity
07:16is ambitious, I agree, but that was driven by an idea that they could achieve that, as
07:24MUA. The problem with it is they're importing, the strategy is to import electricity from
07:31the UK, so by not creating emissions on the Isle of Man. Well that's all very well until
07:38the regulations change, when CO2 being produced elsewhere has to be counted here. That's
07:48the nonsense, so that's where a date that's been ill thought through, or a solution that's
07:55been ill thought through to match a date doesn't work, and that would set us back years, so
08:01that's why, going back to your principles of abundant natural resources to help renewable
08:07energy here on the Isle of Man, because of that security they're having to spend money
08:12to a third party off the Isle of Man to get electricity. So that's the problem, and that's
08:17where it becomes quite complicated and that's where there's a lot of detail behind the scenes
08:21to try and understand the importance of that solution.
08:23I suppose from my point of view that this point about targets, it's a different perspective.
08:27We set bold, ambitious targets, not worrying about whether we hit them or not. I suspect
08:33government sets targets desperately concerned that it doesn't miss them.
08:38What happens is, someone comes up with a solution, that means we can get renewable
08:44electricity here by 2030. Right, let's set a target for 2030, already knowing how you're
08:50going to deliver it, but unfortunately that's then blinkered, so you're not looking at the
08:54best solution, you're trying to back up something you've already come up with.
08:57I can give you the simple example of what we're planning, because if you take that, what you
09:02said to the degree, you could aim for 2030 to be achievable and that's through basically
09:08relying on interconnection and buying it from somewhere else. That's a decision you take
09:13then to be exposed to the market that you're buying it from for the next 35, 45 years.
09:20Our project will come along in 32 or 33 in Man's waters, six miles from the coast, run
09:27a cable, and that could be, I mean we're building the lowest cost form of electricity
09:32generation right now, never mind what we'll be doing then on the cost curve, right on
09:36the doorstep, and only by waiting for half a decade, the next 30, 40 years could be a
09:43fantastic outcome for the consumers and the other industry. And that's the really tricky
09:48part, that's the really tricky part.
09:49That's the cable I would buy, cable to you, not to the UK.
09:53I can't, for instance, sign up to anything coming from the UK, because we can't say where
10:02the source is coming from. If I'm going to sign up to a green energy tariff, it has to
10:09be from a green energy tariff, not it could have been generated from green energy. So
10:16every way you talk about green energy tariffs, whether it's now or in 2030 when there's no
10:22CO2, I can't sign up to that, I have to know the source, you have to know the source in
10:30order to be able to say I feel comfortable when I do need to consume green electricity.
10:36Hopefully I won't by 2030, but if I do, at least I know it's truly green and not just
10:43coming down the pike from the UK.
10:45The thought of a dystopian future, where by the mid 2030s, so not far actually, we could
10:53have a successful large offshore wind farm selling power to the UK consumers, generating
10:59revenue, coming back to Treasury, so creating opportunity there for public spending. But
11:04on the other hand, because of decisions taken, we may have a very volatile price market for
11:10our own consumed electricity because of decisions to do something else by a different avenue.
11:14The targets are what they are, and I'm not going to debate what government targets should
11:18be. There are many political observations on that already, but it's a bit of the same
11:24as you say, I'm sort of joined up thinking, and I think what I'm saying is it doesn't
11:28take a lot more. Don't go down the path of thinking you have to regulate everything and
11:32tell everyone line by line what the rules should be, but also don't make the wrong decisions
11:39at the wrong time where private business just gets put off.
11:42So authentic isn't it, you want to be authentic, you want to have a clear view, be authentic,
11:47and it's complex.
11:49Which makes it very difficult to communicate.
11:52And it's politics, so there will always be election cycles.