Low Carbon London

Low-Carbon London Martin Powell Director of Projects

Shaping Cities in a Complex World

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Building a Great Global City

• London is a dynamic, exciting city, a hub for business, a magnet for tourists, a stage for international sporting and cultural events and home to a diverse population.

• London speaks over 300 languages and practices 14 different faiths.

The London Development Agency

• The LDA aims to improve the quality of life for all Londoners; working to create jobs, develop skills, and promote economic growth.

• The LDA invests to deliver the Mayor’s vision for economic development in London: the Economic Development Strategy (EDS).

• We have three areas of focus: • Jobs – promoting business growth • Skills – providing the skills that employers need • Growth – developing and regeneration of communities

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Governance and funding

• The London Development Agency (LDA) has an annual budget of £500m per year, and employs around 500 staff

• It is accountable to the Mayor of London

• Performance targets are set in consultation with the Mayor and agreed by the Secretary of State

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Working relationships

• We work with the 33 London Boroughs, subregional partnerships, Government departments and key partners from the voluntary, community, public and private sector.

• The LDA is one of nine English Regional Development Agencies (RDAs) across the UK. We work with RDAs across England to ensure a wider co-operation, so that our regional work achieves a national impact.

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Climate Change

• Mayoral commitment to address the challenge of climate change, to improve the quality of London’s environment and to reduce London’s environmental footprint: • A strategic approach to environmental improvements in London presents both a challenge and an opportunity for London’s economy. • Key opportunities for the LDA include: • business case for environmentally responsible business practice • innovation in sustainable design for London • Investment in public realm improvements • New business opportunities and supply chain development in environmental innovation and technology

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1 What kind of City 8

The 21st Century

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Will effect the ways we live

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Scale

50 % of the worlds population lives in cities 75% of the worlds energy are consumed by cities 80% of the world’s GHG are emitted by cities source: Clinton Climate Initiative

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By 2050 80% of the worlds population will be in cities

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• Cities are thrilling, exciting, creative, liberating, cruel and inhuman

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What kinds of city do we want

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2 Shaping our Obelisks 19

The London Plan

Compact City Principles

• Well designed, compact, connected • Mix of uses • Integrated with public transport • Adaptable for change • Development on brownfield sites • Growth based on public transport • Development on a human scale

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The shaping of our Investment • LDA as landowner and developer • Over 70 sustainability standards to be met:  Energy Efficiency  Renewables  Water Use  Flooding and Surface Water  Open Space & Biodiversity  Materials  Waste & Recycling  Inclusive/Disability  Construction Practice

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Massive New Transport Investment

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London’s heat load density distribution

(Source: The London Plan) 23

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North West Passage 2007

The Shapers for our interventions

• Tight, ambitious targets set by the London Plan • Exemplar Sustainability Standards to be achieved • Alignment to Transport Investment • Head Load densities to be mapped • Culturally diverse city • A genuine urgency!

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The Big Obelisks • Olympics Park • Green Grid • Trees • Great Spaces • River Use • Green Enterprise District • District Heating • Zero Carbon Scheme

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3 The Big Obelisks

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6 July 2005 29

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5 Olympic Legacy Venues

Legacy thinking from outset: Strategic Need Business Planning Financial Sustainability Environmental Sustainability Community Use High Performance Use Fully Inclusive

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Evolution 2013

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The memory of the Games?

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Zero Carbon development

A zero carbon development is one that achieves zero net carbon emissions from energy use on site, on an annual basis.

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4 Going Green

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London’s Carbon Footprint • 8% of total UK CO2 emissions are from London, primarily from the domestic and commercial sectors • Improving thermal efficiency in London’s existing housing stock = 10% reduction in total CO2 emissions in London, and much greater reduction would come from increased energy efficiency in existing commercial buildings.

2006 carbon dio 50

London is committed to playing its role

Today

2020 European 20-20-20 Target (2009)

2025 London Mayor’s Climate Change Target

2050 UK Climate Change Act (2008)

• Reduction in greenhouse gas emissions by 60% below 1990 levels by 2025

• Reduction in greenhouse gas emissions by 20% below 1990 levels by 2020 • 20% increase in renewables • 20% cut in energy consumption

• Reduction in greenhouse gas emissions by 80% below 1990 levels by 2050.

The Mayor is committed to London becoming the greenest city in the world and to a city that becomes a world leader in improving the environment. 51

London has committed to ambitious carbon reduction targets

Profile of national targets and aspirations Profile of London’s reductions to achieve 450ppm stabilisation

Emissions profiles for an illustrative public sector building 2

Required COreductions Today Today

Carbon DioxideCarbon Emissions (MtCO emissions 2)

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45.1m

Proposed London reductions to achieve 450ppm stabilisation 15%20% 20% 25% 26% by 2020 CCA 10 year target 2008

15% 30

(2016) = 20%

600 million tonnes CO2 to 2025

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30%

BAU*

Desired national Target for Target for London profile =% 60 London = 60%

Desired London profile

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1990 1990 1

Profile of national targets and aspirations (against 1990)

44.3m

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Profile of a BAU Projection for non-residential emissions to 20221

2000

2010

2020 2020

2030 2030

2040

60% (vs 2000) 80% by 2050 CCA 2008

2050 2050

DECC modelling for CCC. Sources: CCAP (2006) CCC (2008) * Extrapolation based on CCA trend to 2022 for non-residential buildings

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The Mayor and the GLA alone cannot deliver more than 15 per cent of the necessary reductions

Responsibility for tackling climate change must be shared between the Mayor, the London boroughs (5-10 per cent of requirement), London’s companies and public sector organisations (35-40 per cent), Londoners (5-10 per cent) and national government (30 per cent). 53

The climate change programmes

Energy Efficiency

Energy Supply

Waste

Transport

Low Carbon Economy

Adaptation

London Mayoral Strategies

Delivery

Strategy

London Plan (Autumn 2009) Climate change, mitigation and energy strategy

Energy Master Planning

(municipal & bsuiness

Homes Energy Efficiency Programme

LDA Owned Energy Supply Projects

London Waste Strategies

London Transport Strategy Autumn 2009

Economic Development Strategy

Spacial and Public Realm Strategy

London Waste and Recycling Board

London Cycle Hire Scheme & Cycle Superhighways

Retrofit Academy

Trees and Parks Programme

Park Royal Partnership

Low Carbon Buses

Green Enterprise District

East London green Grid

Building Energy Efficiency Programme

Crystal Palace CHP

Better Buildings Partnership

London Thames Gateway Heat Network

Electric Vehicle Delivery Plan

Green Jobs & Skills

Green500

Royal Albert Basin

Low Carbon GLA Fleet

Low Carbon Economy Action Plan

Low Carbon Zones

LDA Contribution to Energy Supply Projects

Legible London

Olympic Fringe

Traffic flow smoothing Underground, overground & DLR energy efficiency London Green Fund

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Influencing national policy / stakeholder management / communications

Energy Efficiency

Energy use in existing homes is the largest single source of CO2 emissions in London

CO2 emissions from London, 2006

Domestic CO2 emissions from London, 2006

(excluding aviation)

100% = 44.3 million tonnes CO2

Commercial & Public Sector 33%

Industrial 7%

100% = 16.7 million tonnes CO2

Domestic 38%

Ground Based Transport 22%

38% of London’s total CO2 emissions are from domestic housing. Almost three quarters of this is from space and water heating. 55 London Energy and CO2 Emissions Inventory; DEFRA Source:

Homes Energy Efficiency Programme

• Two parallel streams: building up market using housing funds and LDA (next 12 years); launch new, large-scale, financed model (next 2-3 years) • Intensive joint working with London Councils/Boroughs on the business case. Building on experience with schemes in london • £1b could treat nearly 1.8m homes and deliver 3mt of CO2 savings p.a. • At least 2,000 jobs creation potential • A Retrofit Academy to deliver that supply • 1000 homes trialling “10 easy measures”; Autumn 5x1000 homes demonstrating business model; 2010/11 50-200,0000 homes demonstrate financed model

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Energy Efficiency

Energy use in commercial & public sector buildings is the second largest source of CO2 emissions in London

CO2 emissions from London, 2006 (excluding aviation)

100% = 44.3 million tonnes Industrial CO2 7%

Commercial & Public Sector* CO2 emissions from London, 2006 100% = 14.6 million tonnes CO2

Commercial & Public Sector 33% Domestic 38%

Ground Based Transport 22%

*Public sector: Health 23%, Education 47%, Offices 30%.

33% of London’s total CO2 emissions are from Commercial & Public Sector buildings. Over one third of this is from heating. 57 London Energy and CO2 Emissions Inventory; DEFRA Source:

Building Energy Efficiency Programme • It is a cost neutral means to reduce energy bills and carbon footprint of your buildings Insulation

Building management technologies

• Energy service companies (ESCOs) guarantee a set level of energy savings therefore financial saving - over a period of years • This guarantees a future income stream to fund investment in improvements

Cooling equipment

Low carbon heating

• If all municipal buildings, schools, universities and hospitals were retrofitted, could save 1m tonnes CO2 and represents 2% of London’s CO2 emissions

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Building Energy Efficiency Programme

We are developing a framework of approved ESCOs and will then support a rolling process of mini-competitions Mixed client bundles

Sutton

Bexley

UCL

1. Framework lots CNWL NHS

Options for other?

BEEP

Bundles split by building size, value, quality of baseline data

Bundles of buildings

2. Mini competition

Individual contracts between ESCO and client

More buildings through a new competition

ESCOs bid on savings or credentials 1. Desk top audit

2. Investment Grade Proposal

3. Works

3. Delivery 59

Lots e.g.: Self financed vs financed Services vs design & build

4. Extend

4. Monitoring

5. Delivery

Green500

• Unique combination of carbon management service plus performance based annual awards • Focus is on continuous, practical improvement in the carbon footprint of the organisation (not goods/ services supplied) • Set a target, agree a plan, implement the plan, annual assessment

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Better Buildings Partnership • Comprising major commercial property owners • Commits members to remove existing barriers • Leases • Agents • Valuation • Carbon benchmarks for all members on their London portfolios • Annual public awards by the Mayor for reaching the agreed benchmark

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Decentralised energy

• Targeting 25% of London’s energy supply from DE by 2025 • Includes Barking power station CHP (renamed Thames Gateway Heat Network), aiming for first heat delivery in 2011 • Three new areas of focus through LDA Decentralised Energy Delivery Team  London-wide energy masterplanning (2-year programme)  Technical and commercial centre of excellence including borough ‘SWAT team’  Part-financing for specific projects • Low Carbon Zones – prospectus launched May 2009, winning zones announced Autumn 2009

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Fuel-poverty needs to be addressed Levels of Fuel-poverty* in London Boroughs, 2008

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Waste

• £2b of £12b London’s energy consumption could be delivered through energy from waste • 3-year, £84m London Waste and Recycling Board fund-142 bids ranging from £5k to £10m; first disbursements expected September 2009

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Transport

• Bike hire scheme May 2010; 12 ‘cycling superhighways’ by 2012 • Full hybrid conversion of 8,000 vehicle bus fleet • LED traffic light conversion underway; street lights? • Securitising Underground electricity use? • Electric Vehicle Delivery Plan launched June 2009 • Own fleet: Delivery Plan Autumn 2009, start procurement early 2010 (1,000+ ultra low carbon vehicles) • International EV procurement initiative with Clinton Foundation 66

Local environment

• 10,000 new street trees • Air quality action plan by Summer • Range of urban realm improvements (Exhibition Road, shared space, etc) • 10% increase in central London green space would stabilise temperatures over the next century • New London Plan including Green Grid extension, green roofs, further protection for green space

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Low Carbon Economy Estimated Global Clean Energy Annual Investment to 2030, UK £bn 387

• Lots of discussion about low carbon economy, ‘green new deal’ • But all top-down estimates • Significant share of global stimulus going on green sector (~15%)

What is the real opportunity for London within this, if any? What would be needed to realise the opportunity?

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368

271

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WEO (reference) 2008

WEO 2008 (550ppm)

WEO 2008 (450ppm)

Source: World Economic Forum, 2008 Note: Covers investment in renewable energy generation and energ

NEF Global Futures 2008

What did we find? (I): Current strengths •

Carbon trading – London the dominant player in a small but iconic market – Highly mobile; others are targeting it (Tokyo)

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Finance – London is Europe’s cleantech finance centre (AIM, VC’s) – Sector being targeted (e.g. Singapore) – Big opportunity for finance sector to create new structures and financing mechanisms for energy efficiency, DE, renewables, etc

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What did we find? (II): Strengths to build on • Business services – Law, design, engineering, etc i gh H

– New low-carbon programmes, financing mechanisms all play to London’s strengths

Generation technologies

– Significant export potential

Industrial products

Gre i s u b n e

– London as academic hub – R&D less competitive than perhaps should be

Financial services Business services

Transportation technologies

s s e

• R&D/ academia

Research &

Alternative fuels

Electronic equipment

Aircraft Creative industries

– “Valley of death”

– Creative industries – Aviation 70

Pharmaceuticals Low

• Other industries have potential

Low

High

Comparative advantage

What did we find? (III): Impact of programmes • Programmes include – New waste facilities – Decentralised energy – Retrofit of homes and offices – EV’s and other transport measures

• Impact estimated under moderate scenario • Major contributor is retrofit, particularly homes – at relatively low cost

Electric vehicles Commercial public buildings (BEEP) Residential Buildings, Basic Waste (EfW and recycling) Residential buildings Microgeneration Commercial buildings (BBP)

720

14,357

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832

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847

50 52 78

126

845

284 2,674

1,260

24 44

1,675

78 68

2,436 Residential buildings Extra

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176 154 3,785 Decentralised Energy (CHP)

142

132 848

GVA (direct) pa (£m)

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Jobs pa

Investment total (£m)

Initial high-level recommendations to unlock sector value

• Consider changes to the UK’s tax regime if want to be competitive with other nations to attract and retain low-carbon business • Improve the planning regimes and processes (eg waste, DE) • Improve the processes for private enterprises to engage with Government • Improve collaboration across different players involved in this agenda • Improve access to finance

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Overall conclusions

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Conservatively 10-15,000 jobs, £720m GVA p.a.

Estimated annual incremental Low Carbon investment size of prize for London Source: Global Insight, Ernst & Young, New Energy Finance, Innovas

Current strengths under threat Potential growth areas not being aggressively pursued

2.8

£bn

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3.7

0.8

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Significant economic potential from mitigation; lack of financing mechanisms is a major barrier

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London arguably uniquely positioned: combination of universities and finance/business services

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Today

The Mayor's carbon mitigating actions

Potential incremental value to unlock

2005

The London Green Fund

London Green Fund Investors

London Green Fund

Retrofit Fund Investors Retrofit Fund Commitments

Waste Fund Commitments

London Green Fund Investment Commitments

Retrofit Fund

Project 1

Waste Fund Investors

Project 2

Waste Fund

Project Investors

Project 3

Project 1

Project 2

Project level investment could be sought to maximise f unds raised – however, this might lead to over-complication and should be considered by the project managers

Banks

Financing provided either on a project by project basis or on a programme wide basis

Banks

Project 3

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New Build Domestic Commercial Supply

0.4 0.3 0.9

Transport

Cars biofuels & LCVs

1.8 1.7 1.5

Cars behaviour change

1.5

Road user charging

6.2

Freight measures

Annual million tonnes of CO2 saved (2025)

Ground based aviation

0.4

PT driver behaviour PT infrastructure energy efficiency PT LCVs, biofuels

4.5

National grid

2.2 2.1

CHP Biomass & waste energy On-site microgeneration

2 1.7 1.4 1.7 1.8

Lighting and appliances

3.0 2.8

Thermal efficiency

Staff behaviour change

Building operations

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Lighting and appliances

Thermal efficiency

Behavioural change

Domestic new build Commercial/ industrial new build

,

CO2 savings by measure London on its own With Government support

6 4.4

2.5

0.9

0

5 The Beautiful City 76

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Potters Fields - Before

Potters Fields - After

Emissions from Road Lighting

• Estimated that UK has over 5 million road lighting points • CO2 Emissions for UK 2 million tonnes • London estimated to account for 12% • LED street lighting in London could save over 150,000 tonnes CO2 p.a.

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6 The Final Challenge 81

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80 Litres

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Summary

• London has set some challenging targets • A mix of Interventions is required to deliver these targets • Varying models of delivery is essential for success • Cities have the most to do and the most to gain • All cities are different but the challenges are the same • We can learn by replicating what is successful in cities and adjusting the approach to ensure the right delivery mechanism to enable action at scale!

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Thank You! [email protected]

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