Solar Battery » The UK as a Smart Energy Island should set the global agenda for climate and trade

The UK as a Smart Energy Island should set the global agenda for climate and trade

By Guste Sep 02, 2019

Simon Daniel, Moixa CEO and Founder

Last week, Moixa CEO Simon Daniel wrote a piece for Utility Week. In it, Simon outlines how the UK can show “global leadership” by pioneering the delivery of low carbon trade and addressing the climate emergency. Following the G7 summit in Biarritz, he says world leaders need to take more than just “baby steps” in tackling the climate emergency.

Written by Simon Daniel, Moixa CEO and Founder

Last week in a parallel universe, the G7 resolved trade disputes, Brexit and set the world on the required UN path of halving carbon every decade. Radical energy, transportation, trade and finance policies would be delivered on international climate commitments and the UK’s own 2050 net-zero emissions target.

Sadly, world leaders only took baby steps. However, the UK can still show global leadership as a Smart Energy Island by pioneering the delivery of low carbon trade and addressing the climate emergency. If effective in delivering this type of policy, the triumvirate of Boris, Trump and Macron can together solve the problem and become famous for all time.

The UK has the ideas, aided by £2.5bn in innovation funding and goals such as net-zero, to lead the world in battery technology, as the Prime Minister pointed out in his first speech at Number 10. Yet, the UK often lags on commercialising domestically. If we are to overcome this challenge, we must now be bold as a nation and become a truly Smart Energy Island.

As an island we get around 5% of our electricity via interconnectors. To accelerate our transition to 100% low carbon electricity we need more renewables and batteries to store and shift intermittent solar and wind resources. We also need to accelerate electric vehicle (EV) adoption, with freedom in our policy regime to encourage shared ownership, AI automation and use of EV batteries as part of the energy system.

Today, the UK has over 6GWh of batteries across 200,000 EVs. This could rise, should the UK go fully electric, to over 900 GWh – equivalent to one hundred Dinorwigs, the 1.8GW pumped hydro plant in wales. This can help cut carbon, lower fuel costs and keep the lights on. During the recent blackout, 475MW of batteries were used to help restore power, according to National Grid. The future potential is orders of magnitude greater.

The UK could also pioneer a low carbon and borderless trade approach in the event of a ‘no-trade agreement’ in Ireland and with the EU. The UK could pilot only allowing trade under bilateral agreements, based purely on carbon tariffs, taxing carbon and energy in production and transport. Such a transition could inform the value of a wider WTO global policy as well as help resolve the current US/China trade war. It would show how localism in manufacture, low carbon electricity grids and minimising transport, as well as greater adoption of services, can help shift the world from nationalistic policy trends to the new global economics required to address the climate emergency.

A low carbon approach to trade would allow true carbon accounting, avoiding off-shoring risks, as raised by Greta Thunberg and the recent House of Commons Science and Technology Report. This would also encourage electronics and automotive companies to locate manufacturing in low carbon grids, close to end consumption and to better understand the full product life-cycle.

More innovation in clean finance is also needed. Green mortgages were identified in the Commons report as a route to help households adopt renewables. Yet there is the potential to unlock hundreds of billions, towards the £1 trillion Philip Hammond estimated is required for the 2050 net-zero goal, via more radical policies, such as delivering pensions as services. The UK Treasury pays £100bn each year to pensioners, of which over 7% is then spent on household energy bills. This amounts to an estimated £500bn Treasury liability to pay pensioners a life-time income simply for energy bills. A similar amount is spent on car and transportation costs. Europe faces over ten times this liability, with loaded obligations to state and civil schemes, as do global companies with defined benefit schemes.

Such deficits could be reduced and re-aligned in support of global carbon objectives, such as low carbon homes, energy and transport. Governments and companies could write down such deficits by offering the trade of lower pension income in return for free low carbon homes, refurbishment, free low carbon heat and electricity, as well as access to low carbon transportation. The UK could even offer access to future Rolls Royce electric planes and Hyperloop travel (instead of HS2) simply by linking 20 year infrastructure investments to 20 year pensioner obligations.

The UK and the world are at a crossroads, where there is a clear and present opportunity to exploit the climate challenge to deliver bold and radical solutions. We must seize this moment to solve the greatest problem that we face.

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First reported in Utility Week.