Following the Referendum the Smith Commission was set up to deliver cross-party talks and an ‘inclusive engagement process’ to produce, by 30 November, headline recommendations for further devolution of financial, welfare and taxation powers to the Scottish Parliament.

In the lead up to Lord Smith’s report, around 50 members of the ECCI community met to discuss how the findings might effect our work and what further powers would facilitate sustainable low carbon growth, innovation and skills development in the private and public sectors.

The group included students, academics, resident enterprises and members of ECCI’s policy, skills and innovation project teams and was open to all residents.

The overarching themes or areas where the ECCI community believes the Government (Holyrood and/or Westminster) could do more to accelerate the low carbon transition were: 

1. Support for innovation
2. Knowledge exchange for innovation
3. Low carbon skills development
4. Energy policy
5. Planning policy
6. Buildings/built environment policy
7. Public and community buy-in
8. Local authorities’ role
9. Policy instruments

Some of the themes are areas where the Scottish Government (SG) already has responsibility and thus by implication are areas where the ECCI Community believe the SG should change tack or do more. Other themes are reserved policy areas where we think either Westminster should change tack/do more or that it would be better if power were devolved to Holyrood.

Some key discussion points from the themes are listed below:

Support for innovation 

• Financial support and support services
• Should we simplify the landscape ( a one-stop-shop) – or should we develop more locally- and sectorally-specific mechanisms?
• Don’t focus only on projects of scale.
• Can/should you support small scale innovation or big-impact innovation or try to do both?

Knowledge exchange for innovation

• Knowledge sharing and active brokerage is important; between communities, city-to-city (cities can be the crucible for innovation even without national action), between businesses and sectors.

Low carbon skills development

• Vocational training needs to be better valued and resourced; and the modern apprenticeship scheme reinvigorated.
• Is there a brain drain – at the same time as it seems foreign students are more ambitious and motivated?
• Low carbon skills gaps identified were: Big data; ICT; Engineering. Equalities (including quotas) measures could be positive. Low carbon leadership for business is needed.

Energy policy

• We need policy innovation to support the low carbon transition.
• Particularly in support of more localised energy provision.
• The current model isn’t working for remote rural communities. Feed in Tarriffs aren’t geographically differentiated.
• The current market isn’t incentivising the right innovation and investment (e.g. local energy storage or pumped hydro) and removal of incentives for investment in renewables has hit community co-ops.
• Scottish energy policy is seeking integration of heat, transport & electricity, but this isn’t well supported by thinking at UK level.
• The divergence between UK and Scottish energy policy implies differentiated powers are needed.  

Planning policy

• Again, we need policy innovation.
• Planning policy needs to direct innovation.
• The planning system needs to be more decentralised.
• City development needs more focus on low carbon (e.g presumption against greenbelt development).
• More pubic involvement in planning is needed.

Buildings/built environment policy

• Solar space heating is excluded from RHI – is there significant untapped potential in Scotland?
• Housing stock (climate-proofing as far as possible), including efficiency, Retrofitting, conservation principles, planning/ building control and minimum standards in home reports.
• Zero carbon emission buildings – minimum standards in new construction; the technology exists – need to consider both off site/on site construction.

Public and community buy-in

• How can community planning partnerships be improved to support low carbon development?
• How can people take more ownership of issues and policies?
• Public buy-in needs fostering to support the difficult decisions the Government needs to take.

Local authorities’ role

• LAs could be ‘redesigned’ with a decision making hierarchy that helps deliver innovation and low carbon outcomes.
• This subject relates also to Support for Innovation; Planning Policy and to Public and community buy-in.

Policy instruments

• We discussed a range of policy instruments and their merits. Key policy levers were seen as: business rates – control of rates & application to low carbon e.g. tax from fracking for direct reinvestment in low C economy; other fiscal instruments – e.g. carbon tax; air passenger duty; incentives – here we need longer term certainty;  grants and incentives; demonstrator projects; market creation/mechanisms (such as Green Deal).

The ECCI Community meets regularly in a forum called Carbon Chat Room to discuss the news, events and trends that matter most to our work.

Look out for our reaction to the Smith report findings in December.

ECCI helps Scottish Innovators Through the Gateway

Two Scottish businesses – Sunamp, and Glaze & Save – have successfully made it all the way through the RBS Innovation Gateway.

 

Watch the award ceremony: https://www.2degreesnetwork.com/groups/rbs-innovation-gateway/resources/finalists-day-highlights/

Following initial publicity, 140 businesses from across the UK and beyond applied to take part. An entertaining selection process, involving ECCI and other experts, finally concluded in London on Monday with an opportunity for the top 20 to pitch their ‘market ready and garage tested’ propositions to a panel of ‘dragons’. The dragons were Martin Chilcott (2degrees Network), John Elkington (John Elkington), Stephen Howard (Business in the Community), Caroline Rainbird (RBS), Maggie Philbin (Teentech) and ECCI’s very own Ed Craig.

The ten innovations chosen will be fast-tracked into a trialling phase in appropriate RBS buildings (e.g. offices, branch banks or data centres), and it is hoped that all will benefit from the lessons learned and the case studies generated. The most successful should then find wider use within the RBS estate, helping RBS achieve its resource efficiency goals.

Glaze & Save

Glaze & Save is run by Perth-based entrepreneur Tanya Ewing. Tanya, who was recently awarded an Honorary Doctorate of Technology by Edinburgh Napier University is already a well-known low-carbon inventor and innovator through her role in developing and bringing to market the ‘Ewgeco’ real-time energy monitor, designed to help people understand and engage with their energy consumption at home and work.

Lately, Tanya has acquired an innovative secondary glazing system from the Blairgowrie insulation specialists Proctor Group, which she is now successfully bringing to market. The final selection panel (as well as the subject experts who assessed the written applications) recognised the potential fit between her system and the RBS branch network, which includes many traditional and listed buildings with unimproved windows.

Glaze & Save is a secondary glazing system consisting of a polycarbonate sheet held in place with magnetic strips. As such, it is easily removable (for the summer months), it virtually eliminates draughts, significantly reduces conduction heat losses, and offers additional benefits such as improved acoustic insulation and reduces the instances of condensation on the inside of the window. The system is already being tested in-situ out by friends of ECCI in their own homes, and is being helped by Edinburgh Napier University which has played a significant role in providing technical support for both of Tanya’s ventures discussed here.

Sunamp

Sunamp is run by Andrew Bissell, another serial entrepreneur, well-known in the Scottish low-carbon scene. After Andrew sold the successful medical imaging company (Voxar) which he co-founded, he turned his hand to the low-carbon market. He recognized then that low-carbon energy systems of the future (now the present!) will have a greater reliance on energy storage – and heat storage in particular had received very little attention from innovators since the invention of the insulation jacket for the hot water tank.

Working with a number of partners, including chemists at the University of Edinburgh, Andrew has developed a high capacity but compact heat storage system using phase change materials. These have been designed to optimize the performance of integrated energy systems involving solar heating, heat pumps and electricity tariffs with a time-of-use element, for instance.

The system has won significant funding from the UK Department for Energy and Climate Change to trial the performance of a system involving heat pumps and Sunamp products, working with Berwickshire Housing Association.

Runners up still in with a fighting chance

Congratulations, too, to Tantallon Systems (Livingston) and Greenspace Live (Stornoway) for making it all the way to the final twenty, and we hope that these businesses will eventually earn a try-out with RBS or one of its partners in the Innovation Gateway.

ECCI has supported these businesses for around three years, and looks forward to identifying early adopters and other willing partners for more innovators in the future. For further information, please speak to ECCI business manager (and Gateway technical reviewer) Jim Hart.

From the news archive….

ECCI helps Scottish companies to finals of the UK’s largest search for new ‘green’ innovation run by RBS

A landing pad for modern-day entrepreneurs with ideas for the future

We are a culture that loves a good sales pitch. And we love the idea of the entrepreneurial spirit taking aim and becoming a success – the romance of the perfect product hitting the sweet spot of the market and becoming ubiquitous to our lives. Cue the wheel, sliced bread and the smart phone. But where do ideas come from and how do we actually encourage the great ones to rise?

Recognising that the way to speed the shift to a low carbon economy is to support the development of new low carbon products and services – the Edinburgh Centre for Carbon Innovation, 2020 Climate Group and many others are committed to encouraging good ideas to grow and develop. After all, the creation of new and pioneering products and services is only going to happen with truly innovative and motivated entrepreneurs. There is clearly a need but how do we foster and incubate them? How do we speed up the idea development process? What makes someone quit their day job and plunge into a risky set up that is, on average, quite likely to fail?

On the eve of the official announcement of the winners of ECCI’s new Low Carbon Ideas Lab we spoke to Victoria Barby, Project Director for the 2020 Climate Group, and ECCI’s own Business Development Lead, Charlotte Waugh, who both sit on the selection panel, about innovation spotting, Scotland’s burgeoning low carbon economy and why women make great entrepreneurs…

A real entrepreneur is less adverse to risk more willing to see how their idea plays out

It’s not merely personality or talent – no one is born an entrepreneur. It can certainly be affected by providing the right environment though. In general the entrepreneurial mindset exhibits an attitude to risk that is different from most people. A real entrepreneur is less adverse to risk taking and more willing to see how their idea plays out. To foster entrepreneurs an organisation (or institution or government) can mitigate some of the risk – this can help speed up the process. Most companies and businesses are not really about entrepreneurship – and they are certainly not about risk. They may have some policies or strategies in place for fostering innovation but an entrepreneur is not necessarily sitting at a desk spinning out ideas. In other words today’s entrepreneurs may not know who they are! We were able to use the community of the 2020 Climate Group and ECCI to start to find good ideas and the people who have them. For someone who is a low carbon entrepreneur the support they will receive here will make a big difference. Just being based within ECCI and having access to this community is going to be hugely valuable.

So what’s the difference between a run-of-the-mill good idea and an idea worth mortgaging your house for?

Innovation! Everyone has the odd good idea. And some people will have the drive and skill and to take it to the next level and turn it into a saleable product or business but entrepreneurship is more than that. It’s partly the attitude to risk but also it’s about innovation. A good idea might be rehashing something that is already in the market. An entrepreneur has the vision to introduce a totally new product or service – one that acts in a transformative manner on the economy. It’s not always about inventing the wheel but it is about innovation of some sort. That is what the Ideas Lab was set up for – to foster and develop innovative products and services, specifically ones that are low carbon.

Scotland has always been at the cutting edge of economic transformation – innovation is nothing new here. We just want to ensure that low carbon is part of it.

− Victoria Barby, Project Director, 2020 Climate Group

Why does ECCI want to support entrepreneurs and businesses?

The Edinburgh Centre is committed to helping Scotland transform its current economy to a low carbon one. This means giving people in Scotland the opportunity and support to think, grow and develop ideas about low carbon products and services. Scotland has always been at the cutting edge of economic transformation – innovation is nothing new here. We just want to ensure that low carbon is part of it. ECCI is that organisation that can make the difference between a good idea and something that really changes things. We can help mitigate the risk, we can supply the place and space to think and test ideas, we can provide an encouraging and intelligent community and we can ask the right, and sometimes difficult, questions. Ideas need sector specific support in order to grow and succeed and the Edinburgh Centre can provide this in spades. We don’t expect all the ideas we support to succeed – in fact part of our job may be to point out when it’s time to walk away from an idea or how to develop it in a different direction in order to make it really work. But we know that this kind of support can be a real game changer and that’s what we are here for.

Why do entrepreneurs need help and support – aren’t they going to make a fortune anyway?

The Low Carbon Ideas Lab is about providing a platform of support (mostly non financial) to people who are very serious about taking forward ideas that will help change things for the better.
− Charlotte Waugh, Business Development, ECCI

No! Most of them are going to lose a fortune! At least in time and energy if not pounds. Early support, expertise and mentorship is crucial – both to help the good ideas rise and take shape but also to nip questionable ones in the bud so energy is not wasted (that in itself is a low carbon statement!). The Low Carbon Ideas Lab is not about handing over millions to someone with a business idea, it’s about providing a platform of support (mostly non financial) to people who are very serious about taking forward ideas that will help change things for the better. Our criteria for the Low Carbon Ideas Lab was very clear – it had to be innovative and it had to contribute to a low carbon economy. We looked for people with true commitment and a defined product, service or idea, prepared to spend the majority of their time over the next 12 months on it and with a clear direction for its development. We didn’t consider ideas that were simply about setting up a new business or marketing an existing product. One of the key things about the Lab is the process of mentorship – the advice and expertise of someone who has been there and knows what you are trying to do is invaluable. This is where the 2020 Climate Group really contribute – mentorship from professionals at this level is truly worth its weight.

Why a particular focus on supporting women entrepreneurs?

It’s not unusual for a woman to set up a small business or take an idea to market – but they need support to take it to the next level and start to consider truly innovating.
− Charlotte Waugh, Business Development, ECCI

Well, women can be perceived to have a mixed attitude to risk – while they may be seen traditionally to be more risk adverse, possibly homemakers or in service industries, in reality they are often likely to be the one to set up a small business or take an idea to market. But they are also less likely to develop that product or service further and so need more support. We want to ensure that this attitude is fostered in order to develop into the next step – a truly innovative idea. We also want to ensure that we are getting ideas from all angles of the economy. Low carbon is not just about wind turbines and electric cars, it is about the retail environment and about attitudes and decisions that people make every day. Women are underrepresented in the fields of engineering, tech and science which is where the expectation that innovation will come from but in reality it is just as likely to some from someone who has simply had the right idea for the right moment – and that is just as likely to be a woman so we want to make sure we hear it. We want to ensure that women have a chance to think and experiment and take risks on an equal basis – the Low Carbon Ideas Lab is committed to supporting this.

Being cruel to be kind – Low carbon ideas don’t grow on trees

Sometimes we have to be Simon Cowell and tell someone that they just can’t sing!

− Victoria Barby, Project Director, 2020 Climate Group

It’s true – it’s important to let people know when they don’t have a very good idea. Or if their idea isn’t very new, or innovative, or if the market simply isn’t ready for it. This kind of advice, delivered at the right time, can be very important to an entrepreneur. It might mean the difference between them spending the next three years hammering away at something that simply isn’t feasible. It might free them up to work on their next idea, which may better!
The main thing for the selection committee was assessing how an idea might fit into the low carbon marketplace. It wasn’t always immediately obvious but the challenge was to definitely to think broadly and look for ideas that were really groundbreaking and will make a difference. These sorts of ideas don’t grow on trees – we had to use the resources of our community and the 2020 Climate Group membership and the other panellists, including John Hughes from the Business Gateway and Sanne Downie from University of Edinburgh Alumni & Development, to ensure that we were looking in the right places. We also needed to ensure that the people we choose to support will actual benefit from the package we can offer, from access to ECCI’s community to mentoring, it had to be the right fit. And finally it needed to be an idea that could work with our timescales – up to 12 months – which are quite ambitious!

And the winners are…?
Next week will see the selected Low Carbon Ideas Lab participants take their places at the Edinburgh Centre for Carbon Innovation. Stay tuned for an announcement on Monday 17th November.

The Low Carbon Ideas Lab is supported by the University of Edinburgh, City of Edinburgh Council and is one of 2020 Climate Group’s ’14 priorities for 2014’. To find out more about the Low Carbon Ideas Lab or for information on the next call for applicants please contact ECCI at info@edinburghcentre.org or phone 0131 650 5326.

The 2020 Climate Group was set up by business in response to the Climate Change Act. The group encourages business to support government in meeting the ambitious emissions targets for 2020 and to act as a ‘critical friend’ to government. The long term aim of the group is to contribute to the transformational change required for Scotland to progress to a low carbon economy by bringing together business, voluntary and public sectors to work together. Visit the 2020 Climate Group website for more information.

Asks ECCI Executive Director Andy Kerr.

Advocacy groups, such as WWF Scotland, argue that the current Scottish Government plans to spend £79 million in the next financial year (2015-16) on energy efficiency funding is “inadequate”[1]. Scotland has missed its first three annual greenhouse gas emissions targets and is likely to miss its fuel poverty targets without “substantial additional policy effort”, according to the statutory advisory body, the UK Committee on Climate Change[2]. This plea for additional public support for energy efficiency follows a well-worn course. Indeed, a stuck record might be a better description. But if the advantages are so obvious, and if a little additional money (in the context of a Government budget) would create such a step change in energy efficiency, why have so many countries found energy efficiency so hard to deliver?

Another Approach?

Perhaps we should think of another approach. Recently I asked a group of people attending a cross-party energy group meeting in the Scottish Parliament to think of a couple of adjectives (descriptors) to describe themselves to others. Then I asked if anyone had used the word “efficient” to describe him or herself. Not a single person admitted to using that term. If it is used about people at all, it is used pejoratively. So we exhort people to be efficient, with energy or with resources, despite the term having no resonance with us or with the way in which we live our lives. And then we’re surprised when we don’t see the results we expect. In other words, we need to rethink how we frame the notion of energy efficiency so that it matters to people. Similarly, if we were to describe the economic opportunity for energy efficiency in our economy, we would usually end up with something akin to a marginal abatement cost curve (MACC)[3]. This economic tool seeks to describe the relative cost of delivering different options to meet some target, such as a proscribed reduction in greenhouse gases. Invariably, at the left hand end of the curve lies a series of “negative cost” options – meaning that there is a net economic benefit – associated with energy efficiency measures. Yet despite the apparent economic benefit, we find that investment in energy efficiency is far lower than investment in apparently more costly activities such as energy generation. For example, in 2011, energy efficiency constituted less than 10% of clean technology investments. As various experts have noted, energy efficiency is “cheap but hard”.

So what is missing from these economic toolkits? The short answer is people. We apply tools that start with the assumption that all people are, in the jargon, utility maximising and rational. Tools that assume that time does not exist, where activities are carried out instantaneously and without hassle. Where we have perfect foresight to choose the right option that will deliver the least cost outcome. Yet we also know, from sociology and other behavioural economic studies, that we don’t always “maximise utility”; we are creatures of habit. We are inherently biased. We have short memories. We can be influenced by how problems are framed. And we are terrible at complex calculations – such as the net present value calculations at the heart of any energy efficiency offering: we pay upfront but save money over the next few years to our overall benefit. In other words, we value and measure energy efficiency in our society in ways that bear no relationship to how we actually behave.

Why does this matter?

In Scotland, we are proud of our world leading efforts at developing a low carbon economy. If we examine what is intended to deliver our emissions reductions over the next 5-10 years, from homes and communities or from business and the public sector, we find that enhancing energy efficiency is at the heart of Government intentions. Examples such as building standards, the Energy Company Obligation (ECO) and the roll out of smart meters are all designed to deliver a more efficient energy system.

And how are we doing?

We have made good progress in some areas over recent years. Between 2005 and 2013, domestic consumption of electricity per household fell by over 15%. Commercial use of electricity fell even further, by 25%, while overall consumption of heat energy fell by around 10% over the same time period. Indeed, the Government’s ambition to deliver 12% reduction in overall energy use by 2020 is already partially met, with over 9% reduction to date. But while progress has been encouraging, many of the easier measures have been completed. We need a further step change to deliver the major economic, social and environmental benefits of an efficient energy system.

Where next for Scotland?

At present, Scotland has been wildly successful at delivering renewable electricity – now rising towards 50% of total Scottish consumption with a 100% consumption target by 2020 – but much weaker at delivering sustainable heat and transport energy. Too often, we have been working in energy silos, despite acknowledged inefficiencies across the whole energy system: heat wasted from power stations; excess renewable generation being dumped because of grid constraints whilst costly transport fuels are still being imported; not effectively linking local energy supply and demand. Steps are being made – through for example the Local Energy Challenge Fund – to pilot projects with smart grids to manage demand; use of thermal stores to avoid wasting energy. Evidence suggests that creating local energy systems – at human scales – leads to much better engagement by people around issues such as efficient energy systems.

In summary:

• Stop focusing on “energy efficiency”: instead make it aspirational.
• Value it properly: include non-energy benefits like time saved or hassle reduced
• Measure it properly: include other productivity gains. For example the time saved by a smart phone app (e.g. for enabling better mobility within a city) is the benefit to people, not just saved energy costs.
• Build local energy systems that resonate at the scale of communities or cities.

Of these actions, the existing powers devolved to Scotland can be used for the first three. For the latter – tackling whole energy system inefficiencies – powers over some of the key energy demand measures, such as the Energy Company Obligation, would enable a nuanced response to specific challenges facing Scotland’s communities.

This blog is drawn from a talk Andy Kerr gave at the cross-party Scottish Parliamentary Group on Renewable Energy and Energy Efficiency (SPREEE) AGM in October 2014.

Download Andy’s presentation slides: SPREEE AGM presentation – Energy Efficiency – Oct2014

[1]http://www.scottish.parliament.uk/S4_EconomyEnergyandTourismCommittee/Inquiries/WWF_Scotland(1).pdf

[2]http://www.theccc.org.uk/wp-content/uploads/2014/03/1871_CCC_Scots_Report_bookmarked.pdf

[3] See for example http://www.homepages.ucl.ac.uk/~ucft347/Kesicki_MACC.pdf