D E C E N T R A L I S E D E N E R G Y E N A B L I N G P R O J E C T ( D E E P ) Alex Hobley, Project Manager 8 th February 2017

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1 D E C E N T R A L I S E D E N E R G Y E N A B L I N G P R O J E C T ( D E E P ) Alex Hobley, Project Manager 8 th February 2017

2 Future Cities 70% of the world s population will be living in cities by 2050 Growing pressure on resources Cities have to become increasingly efficient and selfsufficient in energy City energy infrastructure and consumers need to intelligently adapt to changing demands to deliver environmental benefits and lower energy costs

3 The City Challenge To adapt current energy systems into more sustainable ones, less dependent on imported fuels Based on a diverse mix of energy sources, in particular renewables, energy carriers and non polluting sources Enhance energy efficiency, by rationalising use and storage of energy Addressing the challenges of security of supply and climate change, whilst maintaining competitiveness

4 THE MAYOR S CLIMATE CHANGE MITIGATION AND ENERGY STRATEGY - OCTOBER 2011 London s CO 2 emissions reduction targets Reductions based on 1990 levels: o 2015 (interim target) 20% o 2020 (interim target) 40% o % o 2050 at least 80% 25% from decentralised energy by 2025 An 8bn investment opportunity

5 Reducing London s CO 2 Emissions 30% of London s CO 2 emissions are attributable to consumption of heat (mostly mains gas) Greatest opportunity for CO 2 reduction within London is to reduce demand for heat through building retrofit and low carbon, local (decentralised) heat supply Decarbonising electricity supply is better placed as a national action (nuclear, wind, carbon capture and storage)

6 M A Y O R S D E C E N T R A L I S E D E N E R G Y T A R G E T Supply 25% of London's energy demand from energy generated locally by 2025 This will: Reduce CO2 emissions by 3.2 MtCO2 p/a Deliver 12% of the total CO2 savings Over 50% of overall DE opportunity is from medium and large-scale heat networks CO 2 by sector CO 2 by fuel type Combined Heat and Power will also play an important role

7 The London Plan (2011) The London Plan is the overall strategic plan for London, to which London Boroughs local plans need to be in conformity with. Chapter 5 sets out policies in accordance with the hierarchy: In particular: Policy 5.2 sets CO 2 reduction targets from energy efficiency interventions for both residential and non-residential buildings until 2031 (zero carbon) Policy 5.5 sets the policy requirements for London Boroughs to identify and establish DE networks, including the development of Energy Master Plans Policy 5.6 sets out the policy requirements for development proposal with regards DE

8 Mayor of London Key Manifesto Commitments 2050 target committing London to be a zero-carbon city by Establish Energy for Londoners, a notfor-profit company providing: Help Londoners generate more low-carbon energy and increase their energy efficiency, Support local and community energy enterprises, Buy clean energy generated across the city, using it to power GLA and TfL facilities. Lead on work to cut energy bills for Londoners: explore the business case for savings on bills by bulk-buying energy. Solar strategy energy generation to make the most of the city s roofs, public buildings and land owned by TfL. Reduce energy demand by working with the industry to accelerate the rollout of smart meters. Back district heating schemes that make the most of waste heat from the Tube, such as that in Bunhill, Islington.

9 DECENTRALISED ENERGY PROJECT DELIVERY UNIT (DEPDU) EU funded, EIB manager ELENA technical assistance 4 years, 2.8m project development support programme 2011 to 2015 Superseded by Decentralised Energy Enabling Project in 2016

10 DEPDU Project Development Support Capacity Building Heat Mapping Policy Support Resourcing

11 Case Study Gospel Oak District heating - Heat network supplied by waste heat from a new 4.6MW gas turbine CHP installation at the Royal Free Hospital - 3.5MW GT heat recovery system, 1.3km heat network - System supplies existing housing estates (~ 1,500 units) - CAPEX: 5.7m - Project commissioned in CO 2 savings: 2,890 t/year - DEPDU role: assist LB Camden with initial feasibility, design and energy supply contract preparation

12 Conclusions from DEPDU Plan big, start small Public leadership essential - where more than two entities are involved Political support Senior officers agenda The Champion Idea to construction - 3 to 7 years Persevere many blind alleys

13 Decentralised Energy Enabling Project (DEEP) Know-how, skills, capability, coordination, leadership and support. Providing intervention in areas of market failure 3.5m, programme to Oct 2019 Funding: 50% funding from ERDF and 50% GLA match Building and consolidating previous work programmes: Heat mapping and capacity building Energy master planning DEPDU pipeline Research, piloting, and facilitating early operation

14 Programme Outputs 1. Decentralised energy production capacity (MW electricity and heat) 2. CO 2 reductions (tonnes of C02) 3. Capital investment levered ( 87.5m)

15 DECENTRALISED ENERGY Advisory Services Programme Consultancy Framework FRAMEWORK LEVEL 1 (Lot) LEVEL 2 (Sub-Lot) 1.1 ENERGY GENERATION. ENERGY CENTRE DESIGN AND CONTROLS 1.2 ENERGY TRANSMISSION. DISTRICT HEATING NETWORK DESIGN AND CONTROLS 1. TECHNICAL 1.3 ENERGY DISTRIBUTION & SUPPLY IN BUILDINGS. SECONDARY SYSTEMS DESIGN AND CONTROLS 1.4 FESIBILITY STUDIES FOR DE PROJECTS 1.5 TECHNICAL SPECIFICATIONS & COSTING OF DE PROJECTS 1.6 ENERGY ICT 2. COMMERCIAL & FINANCIAL 3. LEGAL 4. STRATEGIC 2.1 BUSINESS CASE/PLAN FOR ENERGY PROJECTS 2.2 DELIVERY VEICHLES, OWNERSHIP & FUNDING STRUCTURE FOR ENERGY PROJECTS 2.3 COMMERCIAL DOCUMENTATION FOR ENERGY PROJECTS 2.4 FINANCIAL MODELS FOR ENERGY PROJECTS 2.5 PROJECT DOCUMENTATION FROM INCEPTION TO MARKET FOR ENERGY PROJECTS 3.1 LEGAL DOCUMENTATION FOR ENERGY PROJECTS 3.2 EU AND UK ENERGY REGULATION, ELECTRICITY & HEAT MARKETS AND LICENSING 4.1 ENERGY STRATEGIES & MASTERPLANNING 4.2 ENERGY POLICY, MARKETS AND PLANNING FOR DE AND CHP IN THE UK AND LONDON

16 DEEP Agreements GLA Support Agreement Consultancy procurement support and management GLA Tripartite Call-Off GLA pays consultant Consultancy Framework Beneficiary Consultant Guaranteed services

17 Organisational structure GLA Investment and Performance Board (Programme Sponsor) Ensures work of project aligns with priorities and policies of the Mayor Monitors progress against programme and KPIs. Responsible for the overall direction and operation of the programme Ensures the rationale for intervention is developed and maintained. Decides whether to support projects Project Director Responsible for the day-to-day operation of the project Manages mini-competitions for pieces of work via procurement framework Manages budget Commercial/Legal Advisor Project Manager Strategic/ Technical Advisor Provides advice to Project Director assessing projects to support Preliminary evaluation of project prospects for further support (go/no go) Writes specification Energy consultancy framework Provides advice to Project Director assessing projects to support Preliminary evaluation of project prospects for further support (go/no go) Writes specification

18 Alex Hobley, Project Manager, Greater London