Mayor sets out measures to deliver low carbon, lower cost energy for London

 The Mayor of London Boris Johnson has today (Wednesday 14 October) detailed steps to boost locally generated energy to cut carbon emissions, create green collar jobs and save money off fuel bills.

To create an energy revolution, the Mayor has detailed a package of initiatives developed in partnership with the London Development Agency, London First and London Councils. These are designed to attract investors whilst helping developers and borough councils to develop more local energy schemes, which can be complex to get off the starting blocks. The Mayor kick-started this call to arms by announcing nineteen boroughs set to be the first to benefit from bespoke London Development Agency and London Councils support to help take forward these greener, local energy schemes.

The Mayor has a target to supply 25 per cent of London's heat and electricity from local sources by 2025. This would cut London's carbon emissions by 3.5 million tonnes a year. The London Development Agency has allocated up to £16 million for decentralised energy projects over the next four years (from 2009/10) and is working on 14 projects currently across the capital.

The Mayor of London Boris Johnson said:

"I want to position London as the world's leading low carbon economy. There are massive opportunities flowing from the shift away from our fossil fuelled lifestyles including new 'green collar' jobs and financial savings from becoming less wasteful. We are working hand in hand with the business community and London's boroughs to create the ripe conditions to revolutionise the way we power our city. This is a fertile alliance between private and public organisations which will reap significant dividends for Londoners."

Measures announced today:

• 'Powering Ahead' : a detailed prospectus for the private and public sector setting out the potential for more decentralised energy in the capital. Produced by the Greater London Authority in partnership with the London Development Agency, London Councils and London First, this document is packed with information and advice for organisations who want to implement local energy schemes;
• 'A Decentralised Energy Centre of Excellence' within the London Development Agency to provide expertise and support to boroughs including detailed heat mapping and 'energy masterplanning' offered to all boroughs to identify their potential opportunities for decentralised energy generation and providing ongoing support on procurement, legal and financial considerations to delivery the projects. The first boroughs set to benefit from its support are: Barnet, Bexley, Brent, Ealing, Hackney, Kensington and Chelsea, Kingston, Lambeth, Redbridge, Sutton, Wandsworth, Westminster; Croydon, Haringey, Lewisham, Barking and Dagenham, Camden, Islington and Southwark - the LDA has committed £3m to help to boroughs to identify opportunities as part of this initiative; London Councils are contributing £210k towards the heat mapping for boroughs;
• The London Heat Map – this interactive web-based map (www.londonheatmap.org.uk ) will help public organisations, property developers, registered social landlords and private investors identify the potential for decentralised energy opportunities in specific areas of London. The map includes details of major energy consumers, energy supply plants and community heating networks and heat density. It will be regularly updated and allow users to contribute content to the map;
• Encouraging the GLA group to undertake decentralised energy opportunities, including using the London Underground to create a local market, eg: London Underground, as one of London's biggest energy consumers, has set an objective to secure 30 per cent of its energy needs from renewable sources, up to 450GWh a year by 2025 – this would represents 250,000 tonnes of carbon savings a year; Palestra, the building housing TfL and LDA staff is set to have operational later this year, a CHP system including a hydrogen fuel cell, which will reduce the building's carbon emissions by 30 per cent (1,000 tonnes a year) from its building regulation target levels. It is estimated that the plant will reduce annual running costs by almost £250,000 per year.

In 2008, London First published a study – 'Cutting the capital's carbon footprint: delivering decentralised energy' - outlining measures to decentralise London's energy supply.

Baroness Jo Valentine, Chief Executive of London First, said:

"With the right public policy and the proper regulatory and commercial incentives, business is ready to play its part in delivering green energy for London.  Business is alert and already responding to the challenges of climate change. A low-carbon energy infrastructure can help to secure a sustainable future for London. Locally generated power at sufficient scale will notch up a sizeable chunk of the carbon savings London needs, to meet national and European targets."

Councillor Sean Brennan, London Councils Executive Member for Sustainability, said:

"Capitalising on wasted energy is one way that we can look after our environment and we are working closely with the LDA to pursue alternative sources of energy production to help us do this."

"There is huge potential to get investors on board in the fight against climate change and this prospectus will prove vital in informing them about the benefits of decentralised energy and how they can get involved."

The vast majority of London's energy supplies currently come from large power stations miles away from the city, which is wasteful (up to two thirds can be lost before reaching its point of use) and dependent on fossil fuels. Locally generated energy is more efficient and in the future will be more secure, with savings able to be passed to consumers or help make organisations leaner.

Ofgem, the energy regulator, last week warned that household gas and electricity prices could reach £2,000 a year by 2020 unless action is taken to secure the UK’s energy supply. Encouraging investment into decentralised energy is one way to help secure London’s energy supply to avoid hefty fuel bill price rises in the future.

The main source of carbon reduction through decentralised energy is anticipated to be Combined Heat and Power (CHP) systems and district heat networks. This involves the production of heat and electricity near to where it is used. The heat produced is channelled through underground district heat networks. A report (due to be published in November 2009) commissioned by Greater London Authority by London Southbank University shows that the number of CHP installations approved with planning applications referred to the Mayor has more than doubled since 2007. Projects the LDA are working on include: the Euston Road District Heating; the extension of the Olympic Park's Energy Centre heat network to the Stratford High Street area; and the Royal Albert Basin CHP scheme. The largest LDA project is the London Thames Gateway Heat Network which will initially capture low carbon heat from Barking Power Station, and other affordable low carbon heat sources, to supply up to 120,000 homes and properties with their heating and domestic hot water requirements.

Separate to the LDA's work, Guys and St Thomas' hospitals recently launched a CHP system that is set to deliver £1.5m a year in cost savings and cut carbon emissions by 20 per cent.

It is expected £64 million will be made available through the JESSICA (Joint European Support for Sustainable Investment in City Areas) fund to unlock the development of decentralised energy in London.

The draft replacement London Plan published on 12 October (www.london.gov.uk/shaping-london/london-plan/) sets out policies for how to deal with decentralised energy in both ‘Local Development Frameworks’ and at the development stage. The London Plan states that boroughs should develop energy master plans for specific decentralised energy opportunities and new developments should incorporate site-wide combined heat and power plant where feasible.

ENDS