Mike Reynolds [00:10:12] Hello, everybody, I'm Mike Reynolds. As you can tell from the English accent, I am British, and this is the Energy Impact Podcast. I'm joined today by the inspiring Energizer Bunny of the energy sector in the U.K. I'm meant to be a high energy person, but when you get on stage, Lily, it's a sight to behold. Lily Frencham, who is the CEO of the Association for Decentralized Energy, which is the ADE, which we refer to it as for the rest of this conversation today. We're going to have an acronym overload, I think, because we'll be talking British energy and British politics and the connection between the two. Lily, thank you so much for coming on.

Lily Frencham [00:10:55] Oh, thank you very much for inviting me. And for the kind words. What a start.

Mike Reynolds [00:10:59] Yeah, well, to be fair, it's not even made up. You've got a reputation for being energized and enthusiastic. And I think that's maybe going to be a theme today, isn't it?

Lily Frencham [00:11:08] I think so. I mean, there's a lot of jazz hands, and I think I spent quite a bit of my early time in the energy industry trying to stifle them, but I'm embracing the jazz hands. I think we need more of them.

Mike Reynolds [00:11:21] Yeah, exactly. Exactly. More personalities in the energy sector, please. So, we're going to have a little tour through your history. How you got into this space, your career today, your job currently, and just hear from you and your personal view and the ADE's view on English, British, Welsh, Scottish, European energy politics and how the push for decarbonization is going this side of the pond. But why don't you take us back to the beginning, Lily, and sort of tell us how did you get into this? What peaked your interest in going into energy and climate change?

Lily Frencham [00:11:59] Yeah, sure. So rolling back, I am actually Australian, which you won't be able to tell by my mostly British accent.

Mike Reynolds [00:12:08] It's there a little bit. The Americans won't be able to tell it, no.

Lily Frencham [00:12:11] It's sadly lost. Back in my heyday at uni, I was still in Oz and was at my lovely beachside green uni doing a combination of communications and law with the thinking that maybe I'll be a journo or maybe I'd go and be like Erin Brockovich, neither of which ended up being a very good fit for me. You can imagine my parents' disappointment when I left uni and promptly said I was not going to practice in either of those fields.

Lily Frencham [00:12:46] But I ended up in international development, which I'd always been really passionate about but hadn't really known how to pin down the label on. And that led me to a job where I was working out in the Pacific islands working with islanders on understanding and crucially, communicating climate science. So, that was a project based out of Australia, taking the science out to the islands and working with them to distribute it among their communities.

Mike Reynolds [00:13:22] And where particularly were you? Which islands were you on, for sort of geographical reference?

Lily Frencham [00:13:29] It's a huge swathe, but everywhere from Niue, which you might not have heard of. Niue means rock. It's the rock of the Pacific. It's essentially a big rock which is an island. Out through the Cook Islands, Vanuatu, Fiji, Samoa, Tonga, heading up towards Palau and the Marshall Islands, which might be a bit more familiar to listeners in the States. So, 15 islands altogether, all of which are like incredibly different and have their own cultural nuances and all of which were incredibly friendly. So, that was really lovely.

Mike Reynolds [00:14:07] I went to Rarotonga. Did you go to Rarotonga?

Lily Frencham [00:14:11] Yes, one of my favorite places on Earth.

Mike Reynolds [00:14:13] They have a planning policy in Rarotonga where you can only build in Rarotonga if you were born there or you married someone who was born there, which means it's incredibly underdeveloped, which makes it absolutely beautiful. So, when were you there, Lily, and how long were you there for?

Lily Frencham [00:14:29] This requires me to calculate how old I am, which I...

Mike Reynolds [00:14:33] Oh no, sorry. Answer the question.

Lily Frencham [00:14:35] I think I was there... It would have been about 10 years ago. But I was based in Oz, and we'd go out to the islands for a couple of weeks at a time and take a group of scientists, social scientists, communicators out. But the idea was we would train... It was a train the trainer type thing. So, we would work with the local meteorological service to build their skills. But doing all sorts of fun stuff like... It's really exciting, actually, getting people to unlock stuff that they don't realize they know. So, we'd like craft and collages and stuff, and then you turn around at the end of the day and say, "Well, that's a stakeholder engagement plan. You've made a stakeholder engagement plan for communicating climate," and seeing people swell with pride.

Mike Reynolds [00:15:26] Yeah, demystifying things that sound a bit wanky and a bit pompous. And climate change is obviously very, very appropriate for this conversation about the Pacific islands, right? I mean, they feel it very keen. They feel the impacts of climate change very keen. Was it something that came up in conversation while you were out there?

Lily Frencham [00:15:45] Oh, absolutely. I wasn't a climate person. I'm not an energy person by background. And this is where my attachment to working in climate started. They are on the front line and experiencing the impacts. Well, they were experiencing the impacts 10 years ago, including a loss of traditional knowledge. So, they've always had a very strong connection to nature and understood the way their spaces worked and that understanding was changing. So, traditional tells that would allow them to fish well or like even to be used for medicines and like social constructs weren't working anymore, which is really, really sad.

Mike Reynolds [00:16:31] Right. So it wasn't a kind of nebulous other concept, it was an immediate, in front of your nose.

Lily Frencham [00:16:38] It was. But really interesting as well to work with them. Like, even in those environments, there's still kind of myths and facts about what's an effective way to battle stuff. So, often we'd go in and talk to them about the best ways to mitigate against some of the climate things that were coming down the line and also to try and find some opportunities from them. Because a changing climate means you're not going to have your traditional seeds perhaps, but you can use some others that you've never been able to.

Lily Frencham [00:17:11] But often there was still a, "Oh, we've heard the mangroves works, so let's do that," or, "Let's build a seawall." And it's like, "Actually, a seawall is not the most effective way of dealing with this." But I guess it happens everywhere, that people get in their heads what the right thing is.

Mike Reynolds [00:17:30] Because it worked in the Netherlands, it must work in Fiji, yeah. And it's interesting because, picking up on the theme of sort of demystifying things and making things accessible for people in their own way and helping them to understand it, that's maybe a theme we can come back to later on, because I think it links very much to what the ADE does. But before we get into that conversation, you're an Australian, you're working in the Pacific islands doing all this outreach work and having an impact, and somehow you ended up in London. How's that happened?

Lily Frencham [00:17:58] I mean, I wish it was a more strategic, impressive story. But essentially... Well, I'm going to document an early life breakdown. A crisis of confidence, a time of transition and decided that the winds of change were afoot and I needed to be doing something else. My particular project was wrapping up and I thought it may be time to hotfoot out of there. And I was looking at stuff all around the world. I mean, my family have a strong history in kind of doing international work, so I thought that would be nice to pursue.

Lily Frencham [00:18:39] I was looking at stuff in Myanmar, in New York, and I accidentally applied for a visa for the U.K. thinking I was doing something else. And then when it came through, they were like, "Yeah, you've got to do that." I said, "Oh, can I raincheck it?" Like, "No. No, you have to enter within 28 days as well." And I thought, "Okay, well in lieu of another plan, I'll do that and see how it goes."

Mike Reynolds [00:19:04] It's funny. Have you ever listened to the podcast from Elizabeth Day, I think it's called How to Fail?

Lily Frencham [00:19:10] No, but it sounds like something I would love.

Mike Reynolds [00:19:11] Yeah, it's a really good one. It's really good. She basically interviews loads of successful people, people like you, right? And all of them have something in their past where they go, "It didn't work," or, "I failed," or, "I got it wrong," or, "I had a crisis of confidence," or, "I wasn't sure what I was doing." And actually, it's amazing how many times that seems to link to then overcoming that hurdle and moving on and finding success. And maybe that's another thing we can pick up a little bit in kind of the evolution in your career and how you ended up in the CEO role of the ADE.

Mike Reynolds [00:19:40] So you're in London, you've arrived in London. Did you have a job at the time or is it just like "Hell, let's just go for this thing?"

Lily Frencham [00:19:47] I didn't. What I had was a half sister who was living in the southern part of the U.K. So she was 16 at the time. Her mum, who is essentially my dad's ex-girlfriend, they were my contacts in the U.K. and they were like, "Well, you can come and stay with us." So, they made the room under the stairs into a bedroom for me. I was really living out my Harry Potter...

Mike Reynolds [00:20:13] Harry Potter. Oh, my goodness. But they were nicer than the Dursleys.

Lily Frencham [00:20:17] They were so much nicer than the Dursleys. They were so great and made me feel so welcome. And I just spent a bit of time looking around at jobs, like applying for all sorts that could work based on my experience and just seeing what kind of fist I could make of being somewhere else. And I ended up quite bullishly kind of forcing this recruiter to put me forward for a job at Ofgem, which is the Office of Gas and Electricity Markets, a regulator.

Mike Reynolds [00:20:52] The regulator, right. This is about as far away as, for reference, like culturally, this is the opposite end of the Pacific islands, right? Like, you've gone from a very unstructured way of doing things to, "Oh my God, this is the book. You must work this way. Everything must be done properly."

Lily Frencham [00:21:13] I know. It was bonkers. And I was living under the stairs. In my defense... Well, this is offensive to some people, but this was the cool side of Ofgem, which is the kind of half of the organization that delivered renewable schemes. They were there, really actually upon arrival, this interesting group of bright, passionate people who were there because they wanted to achieve something and they cared about sustainability. They were awesome. I kind of really fluked my way in there, but it was really, really interesting and I'm very grateful for my time there because it gave me a lot of insight and empathy into how the civil service works and actually, how many people within the civil service, which is often derided, are excellent people who are there because they're trying to do something good.

Mike Reynolds [00:22:16] Trying to do something good. Which is probably a theme as well we're going to pick up on later, because you seem to have built a career in the U.K. actually working with government and working with people who are trying to do things even in the face of overwhelming odds and challenges. Tell us about the ADE now. Before we sort of get into your role now, can you just sort of introduce the ADE a little bit for all of us?

Lily Frencham [00:22:40] Yeah, yeah. So, thank you very much for indulging the acronym because it is a mouthful to use the whole thing. But Association for Decentralized Energy, ADE. We're a trade association, so essentially, an industry group. And we represent over 160 organizations across the energy industry in the U.K. Those are like really, really varied organizations, everything from kind of large energy suppliers, energy multinationals, down to someone that makes the pipe that goes into a heat network or puts insulation into people's houses. So, a real mix of characters.

Lily Frencham [00:23:18] But we focus on driving the decarbonization of heat, championing the role of industry in the transition and pushing for U.K. homes and businesses to be energy efficient and smart. So, our real USP, I would say, is a focus on the energy users who are often left out of the conversation. But we really believe that by getting them engaged and investing in these technologies and approaches, that will be the best decarbonization experience and users will benefit, the system will benefit, and it will work best for us all.

Mike Reynolds [00:23:58] And the ADE has sort of evolved quite a lot over the last, I would say, sort of six years, hasn't it?

Lily Frencham [00:24:04] It has. It's actually evolved over the last 53 years because we are... Like, old is a strong word, but people presume that we're quite "spring chickeny" because I guess we are quite progressive and we're scrappy and trying to make some stuff happen. But the association began life as the District Heating Association and became, over time, the CHPA, so Combined Heat and Power Association. But has slowly but surely built and merged and incorporated other views and workstreams.

Lily Frencham [00:24:44] And stopped at some point, around 10 years ago, being about a technology and started being about an approach to energy, which I think is so important. And also, it helps us when we go and talk to people. It helps us get invited to go and talk to people because a politician doesn't necessarily know what we're going to advocate for. If we are the District Heating Association, they presume we're going to get in the room and say, "Do more district heating."

Mike Reynolds [00:25:12] Do district heating, yeah.

Lily Frencham [00:25:15] And like, that's fine and that's cool, but because we have this focus on like whole systems, the energies, or how things integrate and work together to deliver, there's a lot little of respect there, I think. And we do get invited into more rooms because people say like, "What do you really think about this? How will this work?" Which has been really exciting.

Lily Frencham [00:25:41] So over the last 10 years, we've grown from being like five people around one table in the office all running at something to being 21 people with a clear organizational structure and documented processes, another passion of mine, which has been super exciting. We've gone from just doing kind of policy advocacy to doing a lot of policy, a lot of political engagement. We do research. So, like a much bigger swathe of stuff.

Mike Reynolds [00:26:15] We'll probably come back to the ADE a bit when we talk about your role a bit more later on. But I want to kind of go 36,000 feet and kind of get your view. Where is the U.K. on the decarbonization journey, in your opinion? A lot of our listeners have heard a lot of stuff about what's happening stateside. But the U.K. especially, we've got the post-Brexit challenges, we've got the challenges with the war in Ukraine and the gas crisis that we've got and fuel price crisis at the moment. So, could you sort of talk about where is climate change on the agenda, where's decarbonization on the agenda and what's happening in the energy space that you're seeing at the moment?

Lily Frencham [00:26:53] Oh, it's such a mixed bag. It's really interesting because I think, definitely as an Australian arriving in the U.K. seven years ago, I felt so heartened by how far ahead it seemed. You know, climate change taken quite seriously. Shortly after that in relatively recent times, net zero target embedded into legislation. Real action and rhetoric and seeing the whole country...

Mike Reynolds [00:27:26] Yeah, because it's cross-party in the U.K., you know? There's no part of the spectrum that doesn't say, "Climate change is real. It's man-made and we need to do something about it." Quite rare, isn't it?

Lily Frencham [00:27:38] And coming from Australia, if you believed in doing anything about the environment, you are left wing, at that stage. It was such a defining thing. So, it felt amazing to be here and to have that attitude. And it's been kind of funny and sad to see in the last few years a slip from that leadership position to being like partially distracted by some stuff but also just to get caught up in some inactivity or arguing about some small details.

Lily Frencham [00:28:21] And now, Australia is... I've stopped being embarrassed to be an Australian in climate overseas. We're seeing countries that have started to move much later but are thus seizing the need to move really quickly and they're running at it. And what's going on in the States is also driving a lot of competition and that's exciting but it's also scary because what we're starting to hear is like, "Well, we'll just leave the U.K. and we'll go and do this work in the States. And it's like, "No, we need you here working." I still believe there is a really strong political consensus to meet net zero and to take action. There was a lot of distraction in the last two years from a small vocal minority.

Mike Reynolds [00:29:17] Yeah, a political mess.

Lily Frencham [00:29:20] Yeah. And like so much going on. But it's rubber hits the road time. There needs to be real action. And industry is by and large there ready to deliver. And most of what we need exists already, but they just need the frameworks and for politicians to kind of sign on and then get out of the way so that this can happen. And like, 2040 is too late for these decisions. 2030 is too late for some of these decisions. It's like, this is the decade that matters. This is when we need to be making some big calls.

Mike Reynolds [00:29:55] Yeah. How you make decisions, I think, is going to be a really interesting one, actually. That would be a good one to come back to. On the political stuff, the cross-party consensus is really useful because it means they're not debating climate change. But the other thing I've seen is it's very hard for climate to be a point of difference. It's not a vote winner, and energy strategy isn't a vote winner as well. And in fact, if anything, if you do it wrong, it's a net net zero gain and you can actually lose votes if you get it wrong. So, politicians are quite scared of leading.

Mike Reynolds [00:30:33] And if you alloy that with there's been some seriously big challenges in the world in the last four years. Through Brexit, the coronavirus crisis, into the war in Ukraine. And the political upheaval in the U.K. has meant that there hasn't been any leadership. I mean, we've had... Well, how many people have you been sitting opposite as Secretary of State for Energy... Business, Energy, and... Obviously, they change their title every three or four years as well. But we've had like four or five, haven't we, in five years?

Lily Frencham [00:31:03] Yeah, it's been really hard. And like, it's difficult because just as you start to make progress with one, they move on.

Mike Reynolds [00:31:12] And they understand.

Lily Frencham [00:31:14] Which is really... It's quite frustrating. I guess it's been a good reminder that some of us live and breathe energy. 24/7's a bit strong, but we find ourselves in a bubble and we talk a lot about getting out of our echo chamber, but we don't do it very often. And most people, ordinary people, don't think about energy as not high on their list. What's been interesting this past year, and something that has really come out of the war in Ukraine and the gas price crisis that's accompanied that, is that energy is now pub chat in the U.K. And it's not that people care about energy anymore, but they care about the cost of living. And that is interesting and something that needs to be seized upon. And it reminds us what everyday people really care about and how we should be framing some discussions.

Mike Reynolds [00:32:21] I got a message in my old boys from school WhatsApp chat from a friend saying, "How do I deal with the cost of living crisis?" And we were sharing notes on turning down your boiler flow temperature. I said to them, "Guys, I can't believe I'm discussing flow temperature with you on our WhatsApp." But we are.

Lily Frencham [00:32:39] I've never been more grateful to have such a nerdy LinkedIn network because there's all this sharing of advice.

Mike Reynolds [00:32:44] You can find the answers, yeah.

Lily Frencham [00:32:47] But I work in energy. My husband also works in energy, and there are points that we're sitting around going, "Oh, we don't know what the best step is." And that's problematic. Like, if we don't know, how do we expect others to know? Even people that want to act, even if it's for climate reasons. I don't really mind what the reason is, as long as they want to act.

Mike Reynolds [00:33:09] I was going to ask you this sort of fundamental question. I think there's a misconception that people want to choose everything all the time. And actually, if you think about it and you go back in time, you didn't choose. It's a fake choice, can I switch my electricity and gas provider? Because it's the same electrons coming down the network, down the network and the same gas coming through the pipe, right? You can just pay a different company and then they trade on the wholesale market. So it's a kind of a spurious choice, which has actually been showing up in the last few years as the U.K. energy market's had real trouble with pricing, whereas some of our European counterparts haven't had that trouble. Part of it, I think, is linked to the structure of the market.

Mike Reynolds [00:33:49] But I'm interested in your point of view on this. Do you think consumers need lots of choices? Do you think the way that we decarbonize is by presenting everybody with lots of options and asking them what they want, or do you think that we should be leading consumers through this by making choices for them? And how do you deal with this sort of fundamental challenge of things might get done to society by the government that are the right thing to do that people won't choose? They won't say, "I wanted that."

Mike Reynolds [00:34:20] In the moment, for example, there's a trial going on for hydrogen going into the gas grid in the northwest with Cadent Gas. And local residents are up in arms because it's just being done to them with absolutely no consultation. And I don't want to get into a debate about hydrogen for heating, which as you know, I think is ridiculous. But I'm interested in that consumer choice angle and what role does the customer play in this climate transition?

Lily Frencham [00:34:46] I think it's so interesting and such a critical thing that we sometimes don't grapple with as an industry because we're busy talking about the tech and not about the people. We say at the ADE that we are about the energy users. What does that mean? What do we think is the right way to treat users? And I don't think it's clear and simple. I think that we need to bring people with us.

Mike Reynolds [00:35:14] Yes.

Lily Frencham [00:35:16] Does that mean that they get to actively choose each thing? Question mark. My personal opinion is the U.K.'s really made a rod for its own back in terms of the energy market narrative around choice. So, if you go to Europe, people are much less concerned with that because that's not what has been sold to them as the way to make the market work. Whereas in the U.K., it's been very much this mentality of, "Oh, choice will protect you from the energy market which is kind of out to get you. So, you'll be able to switch and that choice will be..."

Mike Reynolds [00:35:57] Big, bad energy companies, yeah.

Lily Frencham [00:35:59] Absolutely. And now, that's really stopping us because it means that there is such a low level of trust between consumers and energy companies. And it also means that there's an expectation that choice is essential to you getting the best outcome for you, even though you're asking people to potentially make choices about stuff where they are not the best placed person to know what will work best. That is really interesting, but we need to be realistic about the politics of it. And that is the overriding narrative in the energy market. And politicians pretty much will not sign on to something which is just done unto people.

Lily Frencham [00:36:51] So, what we've been trying to work with is what's the right mix between choice and mandating, essentially. How do you bring people with you elsewhere on that spectrum? So, things like can you offer people choices, but heavily incentivize one? So if you are in a zone, could everything in the zone work to support you towards one choice, which is the best choice, say the experts for that area. But you still have the option to not. You could go your own way, but you don't get all the perks and bells and whistles and stuff because you're doing your own thing.

Lily Frencham [00:37:33] But I think engagement, chatting to people, those are the more important parts, really. Then ultimately, they're making the choice. I really do believe that. I just don't know whether the politicians will get there.

Mike Reynolds [00:37:51] No. And whether they want to get there because it won't necessarily impact them in their political lifetime. And it isn't a vote winner. But going to the positive side of things, the U.K. blew away some renewables targets. Can you talk a little bit about how that success happened? You know, most recently is the CFD, but I think it goes back to like 2010 when the government really did a big push for renewables. And I think it is one of the successes of the last 15 years in European energy policy, the huge success of offshore wind around the coast of the U.K.

Lily Frencham [00:38:32] Yeah, absolutely. And actually, there are some great examples of how we, we the U.K., we the people have managed to go harder and faster on some of these technologies than was ever anticipated. So, offshore wind is a great example where just a smashing amount of electricity is coming to the grid which is totally renewable. EVs, the rollout of EVs is another great example where takeup's just been astronomical. Even more recently, the U.K. ran something called the Demand Flexibility Service, DFS, as a trial over Winter. And this is kind of the national grid asking the everyday person in their house if they would mind turning off the lights for an hour on a day where there was like a strong demand on the system to try and help balance the grid. And we saw that people overdelivered, often. People were not just willing, but they overdelivered.

Lily Frencham [00:39:38] So, I think that there's massive potential and actually this is something that I'm really passionate about at the moment. We can get really tied up in how hard it's going to be and talking about the challenges and how scary stuff is and if we don't get it right, what happens? And that is all serious and true, but there are so many reasons to be hopeful. And I think that we need to speak to people with hope and with positivity about how good stuff is going to be and how much we do have the capacity to change. We've already made huge strides in terms of global temperature forecasts. There's still a way to go, but...

Mike Reynolds [00:40:25] Well, last year I read that China installed 120 gigawatts of new renewables capacity, which is the equivalent of the U.K.'s entire generation, and they installed it in one year.

Lily Frencham [00:40:35] It's totally bonkers.

Mike Reynolds [00:40:37] Crazy. Some of the stuff that's happening around the world I think is inspiring and I think it's maybe something we want to do with this podcast, try and get out and see what's happening around the world a little bit. And the renewables success in the U.K. was huge, but there was there was a counter stat which I read. In the U.K. in January, 2020, 41% of energy that the U.K. used in January came from offshore wind. Runaway success. Wind power, I think it was actually, so it included onshore.

Mike Reynolds [00:41:03] And then the following year, in 2021, it was only 2% for the same period of time. And so, I think what we're seeing in the U.K. now is a real issue with baseload and the intermittency of the renewables that are coming through. And that's where these incentives for grid are starting to come in. It's because there isn't baseload and there isn't the peaking capacity as well that the government are looking at how can we manage demand?

Mike Reynolds [00:41:31] And I suppose that kind of moving into the customer world, where you're looking at small, 20 megawatt, 10 megawatt, 5 megawatt, 50 megawatt generation dotted around in different places, can we get that turned on at the right time? Battery storage, grid response services, that's kind of going right into your sweet spot, isn't it? It's not peak generation, it's like, right, we've got to get customers to go with it. So, are you getting a kind of a ramp up now in excitement in the government in the ADE's offering?

Lily Frencham [00:42:03] I would say yes and no in the sense of we are hitting the awkward elbow of the transition where the energy system was built around totally different energy. It was built to be big, chunky, centralized generation and to flow one way.

Mike Reynolds [00:42:27] And it didn't matter if you wasted loads.

Lily Frencham [00:42:30] No, it didn't didn't care. That won't work in the future and it's starting to not work now. And the system doesn't support all this new stuff. So, we're starting to see it creak and break a bit in parts and that is scary to government. And the temptation you can see is to lean backwards rather than forwards and you just try and keep the system working rather than make some bold choices. Because it's not small tweaks that need to happen to make a system fit for the future, it is relatively big tweaks and some very revolutionary changes.

Lily Frencham [00:43:21] And there is some appetite for that. There's some excitement for that. There's active consultations. There's a lot of conversations, great chat. But we still need to convert that into some actual commitment to doing some tricky but cool things to enable this future system and support that distributed generation, to increase storage, to look at connections. And I think that that's really scary to politicians as well, because when there's like six things that they have to understand, say like, there's six things that make power and send it everywhere, that feels very controllable.

Lily Frencham [00:44:04] When there are hundreds or thousands of aspects of that system and some make power and some distribute it and some flex it, some save it. They work in different times, some work together, some work to counterbalance each other, that feels really fraught. That's such an amorphous beast and that's slightly terrifying to them. So, there's still loads of work to do. But I think there is a genuine excitement and decentralized energy is a bit of a buzz phrase, which is great.

Mike Reynolds [00:44:43] Yes, it is. So, let's go back to you a little bit and then we're going to come back at the end and we're going to talk about some big answers and some big solutions that you think we should be moving forward with. So, you were at Ofgem. When did you join the ADE?

Lily Frencham [00:44:58] I joined about six years ago now, initially in a policy role. I saw an ad for a Heat Policy Senior Manager at this is interesting looking company, and I was like, "All right, I'll go for a chat and see." I wasn't really necessarily sure what they were about. And I had the funnest interview with Tim who was the old Chief Exec.

Mike Reynolds [00:45:34] Tim Rotheray, who was the CEO back then.

Lily Frencham [00:45:37] Who's a great man and excellent energy expert as well. We essentially just had a barney for an hour. We spent an hour arguing about what people cared about.

Mike Reynolds [00:45:49] You need to explain "had a barney."

Lily Frencham [00:45:51] Oh, yeah. Had a well-natured dispute. Essentially just bickered for an hour about what's important.

Mike Reynolds [00:46:03] Argued for an hour.

Lily Frencham [00:46:03] Yeah, yeah, yeah. Ripped shreds off each other. And it was great. It was just so much fun. And I laughed and I thought, "I want to work there." So, that was really exciting. And by the time I joined, I felt like Tim and I were old friends because we'd been having these arguments back and forward about what was important. And I feel like we really clicked. And that made me excited to join. And then once I got in the door, I was like, "Oh, I am so for what this place is about, and I want to make the most of it and do what I can here." So, I've kind of been at the ADE since then. I moved into doing internal operations. I mentioned my passion for written down processes and organizational structure.

Mike Reynolds [00:47:00] You hate working with me. Every process has been written down. I don't follow it and I come up with my own way of doing it. It's horrendous.

Lily Frencham [00:47:07] Yep, yep. That's why we work like this and not in the same organization. No, but the thing is, in defense of processes, I love processes because I love people and I think that processes help people understand what they can expect of a situation and what's expected of them. And that makes us feel safe and comfortable and helps us focus on delivery.

Mike Reynolds [00:47:38] And then you unleash the creative freedom. I am now a fan of processes. I learned to love process when I was at Vattenfall and I saw how it was able to free the business up to go and make decisions and be innovative and be creative. But my instinct is to mistrust them, which is a bad instinct that I have to resist all the time.

Lily Frencham [00:47:57] Oh, I know. I totally understand.

Mike Reynolds [00:47:59] You were in an operational excellence role. And actually, it was a kind of a new role, wasn't it? Because the organization had grown and it basically got to this point where everyone was doing stuff and nobody did it in the same way and it was all a bit disorganized. And there was loads of innovation and great ideas, but you needed structure. So you did that for like a couple of years, didn't you?

Lily Frencham [00:48:17] Yeah, I did that for three years, I think. COVID warps time, but I'm pretty sure it was three years. But I guess, I would like to think I wasn't confined just to the processes. I guess by virtue of being in the organization for that long and having dabbled in different work streams and through capturing processes and working with teams, I had this kind of big picture view of what we were trying to do. So I was like quite bossy, getting involved with telling the teams, "Oh, I think you should just do this..."

Mike Reynolds [00:48:53] Charmingly bossy. Charmingly bossy.

Lily Frencham [00:48:54] Well, I think charm is in the eye of the beholder. I think I was quite involved with pushing for particular strategic directions. And then when my old boss, Ian, left, the board approached me to take on the role of Chief Exec based on that charming bossiness among some other things.

Mike Reynolds [00:49:22] Exactly. And it's a buzzy group of people, the ADE. You're kind of got lots of high energy.

Lily Frencham [00:49:26] Oh my God, it's the best team.

Mike Reynolds [00:49:28] Really smart, really intelligent go-getters that go out and sort of try and change the world and actually quite often do change the world, even though the budget's not massive. Some of our American listeners would be surprised to hear what you can do with the budget that you have. Maybe that's a subject for a different podcast. So, you became CEO. When were you made CEO?

Lily Frencham [00:49:51] January last year. So, just over a year in post for that.

Mike Reynolds [00:49:56] And something else you and I have in common is that certainly over the last few years, we've been working together to sort of try and champion diversity and representation, particularly in the district heating sector where we were both working for a while, but more broadly across the industry. And I know it's something you're really passionate about. Do you sort of want to touch on that? One of things that strikes me always about the ADE is how many people there are from ridiculously diverse backgrounds with completely different points of view that challenge the perception of, "Everyone has to be an engineer," for example, which I love. Can you touch on that a little bit for me?

Lily Frencham [00:50:27] Yeah, that's another deep passion of mine, which, that will be my second rant. But my first one is yeah. I think of the ADE team as a great microcosm. I mean, I must say, they are the most talented bright group of individuals. And what I love even more is that every year on the staff survey, the thing that they say they love about coming to work is the rest of the team. And like, it's the kindness and the support that they think is the most appealing thing rather than the access to intellect, which I think is just like amazing in that kind of environment. They're so, so cool and they always go on and do incredible things. So, props to the team.

Mike Reynolds [00:51:11] And often, it's a little quasi lobbying role, right? Often in lobbying organizations, you like people who want to be close to power as well. You know, they like to be seen next to "Lord Blah Blah" and this event and speaking. But that doesn't seem to be the motivating factor for you guys.

Lily Frencham [00:51:25] No. And I think you're right that there is a lot of diversity. I mean, there's some that's quite obvious and I'm very proud that we have such strong female representation. We also have a decent age spectrum, but that's been something we've been really purposeful about as well and in trying to push ourselves in what we think about as diverse. So, one of the things we've looked at in recent years is like, are we a political echo chamber? Our organization tends to attract a lot of the same politics because it's people that care about this issue. Are we testing ourselves? Are we limiting ourselves in any way? So, there is a real mix of backgrounds and views and preferences and working styles, and that comes with its own challenges as well, but it means that what we make is better.

Lily Frencham [00:52:21] And I think, Mike, that's what you and I have often talked about in terms of the energy industry. And passionate about diversity in the energy industry does not equal only getting women into STEM. When we talk about the energy industry as if it is only about technical skills and engineering, it undermines the importance of all the other roles that will go into making the transition a success. Like, we definitely do need engineers and we need scientists. We also need communicators and lawyers and marketing people and creative people. We need comms, we need people in HR. We need so many different things. And when we pretend that they're not a part of our industry, why would you want to be a part of the industry that doesn't acknowledge you?

Lily Frencham [00:53:18] So, getting more of a chat around the various skills required and supporting all of these and looking at different forms of diversity. So, gender is an obvious one. We've also been doing some work lately on neurodiversity within the industry. I think all these aspects are important and sometimes people avoid tackling them because they're scared of getting it wrong or saying something wrong, putting their foot in it. But like, doing nothing is worse than doing something imperfectly.

Mike Reynolds [00:53:56] Yeah, exactly. Exactly. And interestingly, picking up on to the point about creativity where you can now go online and you can feed some data into an AI bot and it can design your district heating network for you. It can do anything and it can do it faster than any person can do. I think this is something... A theme that we've talked about before is this ability to create narratives and tell stories and emote and relate to people and bring people with you to consumers, but I think it's important for all groups. And can you talk a little bit about that because it's something that you're really good at. You're really good at telling a story and you're really good at being engaging, certainly something inspires you. What role do you think that has to play in how we accelerate the energy transition?

Lily Frencham [00:54:44] Oh, I think it's so critical. And actually, this was something that started from my time in the Pacific. I was a communicator working with a bunch of scientists who would eventually hand over their science and be like, "I'm done. It's done. The work is done. It's all there." And I guess my overarching message is data isn't useful if it's not usable. If you're not allowing people to understand it and do something with it, then what value does it have, really?

Lily Frencham [00:55:18] So, we need to connect with people and bring them along with us. As we were talking about before with consumer choices, it's understanding people on a really human level. And part of that is storytelling and letting them know who we are as humans and finding the things that are important to them and talking to them about that. And talking to them in a way that works for them rather than being quite snobby about... And sorry to the industry. I'm not suggesting you're all like this... But the particular terms or ways in which we are comfortable explaining stuff. It's like, talk to people in a language they understand, otherwise what's the point?

Mike Reynolds [00:56:05] Yeah. There's an interesting thing... Jumping to completely different sector, I'm quite into my rugby and I listen to some podcasts about rugby every now and again. And one of the big themes at the moment is that viewers' habits are changing. The generation of rugby fans at the moment, sports fans generally, don't consume sport by watching 90 minute, 80 minute games anymore. They actually mostly consume it by watching clips. And the best sports in the world are the ones that are embracing... I mean, there's some pretty dark, crazy stuff happening on TikTok, if I'm honest, but there's also some really great stuff which is getting content out to people. And so these kind of short clips and how do you put together little vignettes and little stories and little soundbites that get out in front of people?

Mike Reynolds [00:56:47] There's absolutely none of that for the climate transition out there. It's all, "Come to a conference," as is if it's 1998 and we all have to go and sit in a room and listen to some, unfortunately, middle-aged white dude talk about their experience of installing a CHP and how they're doing another CHP this year and gas will continue to... I'm painting a worst case picture, there's clearly lots of stuff happening other than that. But I do think that's a big thing. I think how we take the message out, how we excite people, how we inspire people is really important.

Lily Frencham [00:57:22] No, I think it's really interesting. I mean, I'm not knocking conferences because we hold a smashing one each year. But I did have an argument with someone at an event a few weeks ago because they'd made some joke about the Instagram or something. And we were talking about skills gaps in the sector, and it's like, "Why do you think the Instagrammers don't have a place in the sector?" Like, in the property sector... My Sunday morning indulgence is eating croissants and reading the property section of the paper...

Mike Reynolds [00:57:53] Dreaming of the houses in London that you could buy.

Lily Frencham [00:57:55] That I could never buy. But what they've seen is a huge uptick in people that are buying houses or becoming interested in developments based on Instagram and presumably TikTok. But I'm like, I'm too old to know how TikTok works properly. Not saying like, why do we think we're too good for that? To think that this is very legitimate media that reaches a load of people and to say we're above that means that it's us that's missing the opportunity.

Lily Frencham [00:58:32] And it's good practice to talk to people in a much simpler way. Politicians have so much to think about and do as well, but they're not going to read your entire 300 page report. Like, for sure, do the work to feel confident that you've got the facts to back stuff up, but you should be able to say stuff in a compelling, concise way, otherwise you don't understand it well enough.

Mike Reynolds [00:59:01] I always used to say to my teams, and in fact I still do say to my teams, you bump into the person that you've been waiting to meet for a year, that you're trying to do this deal with or you're trying to do this contract with or you're trying to work with, right? And you bump into them in an elevator and you've got that amount of time. And it's the classic elevator pitch challenge, right? Say what you need to say in the 28 seconds that you've got going up to the 10th floor.

Mike Reynolds [00:59:24] And no one does. No one can do it. It's so hard to do. But I think that distilling things and communicating is something that's really hard for a lot of people and they're scared of it, so they don't do it. And I think it's important that therefore people that can do it, do more of it. So, we need to get you on more podcasts is what I've decided to do after this.

Mike Reynolds [00:59:43] So, going back to the answers, because communication is clearly a very important part of it. But technology's going to play a massive role. So, I want to sort of steer you for the end of the podcast to just now talk about what are the things that you think we need to see in the U.K. in terms of... I don't want to just focus on policy. Everyone talks about policy, but what are the big trends that you think are going to happen in the next five years? Technological trends, transitions from customers, buying trends. Or it could be policies. It could be economic changes and incentives that could be brought through. Basically anything. Get your crystal ball out, look forward five years and tell me what you think you'd like to see happen and let's talk through those things.

Lily Frencham [01:00:29] Interesting. I mean, I think the thing that springs to mind, overwhelmingly, is more integration. So, it will be less of "pick one tech" and more of really cool offers coming forward that bundle stuff. And like, whatever a person or business' bundle might be will be different depending on who they are, where they are, what their needs are. But this much more holistic approach to, "We see you. This is what you need. This is what we can offer you." And hopefully, different energy companies pitching different bundles and packages. Like, vying for how to serve people better.

Mike Reynolds [01:01:10] Have you seen what Greg Jackson and Octopus are doing at the moment? They've got a new heat pump. I mean, they're going toe to toe with British Gas in the U.K. For our listeners, they're big. British Gas is kind of the biggest energy company in the U.K. I don't know how many customers they've got. It's over 10 million customers that they serve. But they also have a fleet of hundreds of thousands of people in vans running around and per the name, installing new gas boilers. But this year they've just launched a heat pump offer. I can't remember what the price point was, but I know that Octopus has just come out with a £3,500 heat pump solution. They're jumping straight into a price war and they're going for it. But Octopus also does EV, so you can get an EV charging system. They do battery storage for your home and they obviously provide power and electricity and smart meters. So, they're kind of going to that place, aren't they?

Lily Frencham [01:02:01] They are. They are.

Mike Reynolds [01:02:03] Which is exciting. They don't see themselves as an energy company, they see themselves as a tech company.

Lily Frencham [01:02:08] Yeah. And we're seeing this increasingly among membership. I mean, they probably consider themselves like utility services, but it's a services mindset where it's like, "What do you need and how much of that can we provide for you?" Which also works to benefit the businesses providing it because they can flex internally to get the most out of their resources, which I think is really, really cool. And there's like an actual attractive thing there. It's again, it's just not how the market was built, so it needs some unblocking.

Lily Frencham [01:02:44] I think the other thing we're definitely going to see is some areas really just like taking the transition and running with it. And often that boils down to a particularly passionate person or group of people. And what I would really like to see is not just about well-to-do accounts that can afford it getting the first foot or the upper hand, but to see a decent spread of different regions trying some stuff, learning and then that being used to help others along for the ride as well. I think that could be really exciting.

Lily Frencham [01:03:29] I think people being more involved. And by that I don't mean necessarily being actively involved and making choices, necessarily. Because I think we can overegg how much people want to be a part of things. But they're being considered and consulted and being brought along in a way that they just haven't been before.

Mike Reynolds [01:03:53] Yeah, totally. And looking at the sort of the energy system, we know we've had some success in renewables. If you look at the energy system, roll me forward five years. What do you want to have seen happen, whether it's policy or big investment in certain areas?

Lily Frencham [01:04:12] There's a consultation going on at the moment called the Review of Electricity Market Arrangements, REMA, which I think is mistitled because really it's a review of the energy market.

Mike Reynolds [01:04:21] Sexy title. Sexy title.

Lily Frencham [01:04:24] Oh, totally. There is the potential in there to like break stuff and do it better. And what I would love to see is some really savvy civil servants and bold government saying, "This is the time that we're going to break it and build it better rather than kind of tweaking around the edges." And I think that could really enable distributed generation and much more flexibility which will allow us to do more with what we've got. There's huge issues with constraints on the grid at the moment in the U.K. It will help to address that. I mean, the new build goes to where it needs to most. There needs to be massive amounts of energy efficiency work happening, and we've got to tackle the decarbonization of heat because it's been left lingering too long and now is the time.

Mike Reynolds [01:05:24] Oh, my favorite one ever is the 72 terawatt hours of waste heat in London and 66 terawatt hours of demand. And yet, we still continue to install 1.6 million new boilers every year in the U.K.

Lily Frencham [01:05:36] Absolutely. And what I would love, a particularly niche love, I would love to see any local council or region that had a river running through it having a conversation, a real conversation about using the waste heat that is found in the rivers to heat the city. Because I think that is a beautiful story about using communal resources for communities. And the amount of the nation that we could decarbonize just by using waste heat in rivers and streams is incredible. So, let's make use of that.

Mike Reynolds [01:06:19] Very good. Okay, last question for you, Lily. I'm going to roll you forward even further, okay? I'm going to roll you forward 25 years. You've been knighted at this point for services to energy and charm. And I want you to look back. How do you want to be remembered and what do you want your legacy to be in the energy sector?

Lily Frencham [01:06:49] Oh, that's really interesting.

Mike Reynolds [01:06:54] I didn't pre-warn you on this one.

Lily Frencham [01:06:54] No, it's like where a human question meets a professional ambition question. I mean, the thing that first sprung to mind is kind. I'm about people, so if I can be remembered as empowering people to get some stuff done, that would be glorious. I would love that. And kind of maybe as part of that by being someone who embraced being a fairly nontraditional energy sector person and didn't try and be too smooth in corporate and got their jazz hands out because that's who I am. So, if we can have more of that, if I could be any part of that, I would be really proud.

Mike Reynolds [01:07:49] Well, to give you some feedback, I think you are being that at the moment. I think you're incredibly good at bringing people together in the sector, which is exactly what's needed. And I think it is the role of the ADE as well. So, thank you very much for your time today. Thank you for your work in the U.K. energy sector and your energy and your smiles and your energy, your drive and enthusiasm. Really lovely to talk to you.

Lily Frencham [01:08:14] Yeah, it's so fun. Let's do this again.

Mike Reynolds [01:08:17] Do it again. We'll pick a new subject. Take care.

Lily Frencham [01:08:20] Thanks, Mike.

Mike Reynolds [01:08:21] Thanks, everybody.