Briefing No. 3 Update

August 2006

LONDON CLIMATE CHANGE AGENCY
ANNIVERSARY OF THE LAUNCH OF THE LCCA

Background

The establishment of the London Climate Change Agency (LCCA) was a manifesto commitment by the Mayor of London in the 2004 election and will implement projects in the sectors that impact on climate change, especially energy, transport, waste and water. The Agency will play a key role in helping to deliver the Mayor’s Energy Strategy for London, especially the target of reducing carbon dioxide CO2 emissions by 20%, relative to the 1990 level, by 2010, as the crucial first step on a long-term path to a 60% reduction from the 2000 level by 2050.
The London Climate Change Agency was launched by the Mayor on 20 June 2005 with the support of the following founders: BP, Lafarge, Legal & General, HSBC, Sir Robert McAlpine, Johnson Matthey, and the Corporation of London. The Agency is also being supported by the Rockefeller Brothers’ Trust, KPMG, Greenpeace, the Climate Group, the Carbon Trust and the Energy Savings Trust.

London Climate Change Agency Progress

The London Climate Change Agency was established as a municipal company on 2 March 2006 and is owned by the London Development Agency and chaired by the Mayor. The deputy chairman is the Deputy Mayor and the other non executive directors are the Chief Executive and a board member of the LDA and Gerry Acher of KPMG and Lord Whitty, former Environment Minister at DEFRA. The Chief Executive Officer of the London Climate Change Agency is the executive director of the company.
During the past year the LCCA has been implementing a number of initial set up projects, such as carbon accounting, and working on the establishment of energy efficiency revolving funds for the GLA Group, flagship projects and the establishment of the London ESCO.

Carbon Accounting

As part of the LCCA work with the Toronto Atmospheric Fund (TAF), including a 6 months secondment of the Director of TAF, a carbon accounting software tool was developed for the GLA Group. Carbon accounting is based on the model first developed by the Partners for Climate Protection in Canada and the Councils for Climate Protection in the UK and takes into account carbon emissions not only from energy, but also from water, waste and transport. The carbon accounting software has been purchased and disseminated to the functional bodies in the GLA Group. It will be used to report on the total emissions arising from GLA Group activities on annual basis.
The LCCA has also been helping the LDA to develop a framework for identifying and, where possible, quantifying opportunities to reduce CO2 emissions through its development work and contact with business in London.

Better Buildings Partnership

The LCCA has been exploring ways to replicate the success of the Toronto 'Better Buildings Partnership' in the capital.

Implications for CO2 Emissions of Housing Growth in London

Based on research funded by the Energy Saving Trust, the LCCA commissioned a study projecting growth in CO2 emissions from the expansion of housing in London, and identifying the most effective areas of intervention for the LCCA. The study was conducted by Element Energy and was completed and presented to senior staff and Mayoral advisors in April 2006. The results will now be shared with key stakeholders such as housing associations, London Boroughs and developers.

Prototyping of a “Deep” Service Model for Domestic Energy Efficiency and Micro-generation

Based on research funded by the Energy Saving Trust, the LCCA, in partnership with the Design Council, developed the concept and business plan for a domestic energy service aimed at able-to-pay owner/occupiers, with a strong aspirational element and drawing on elements of new concierge services. The aim is to reach a group currently not reached by conventional energy efficiency offerings, and motivate them to invest in improving the energy performance of their homes as well as implementing micro-CHP and renewables. To test the service, and to establish whether it can be partially or entirely commercial, the GLA and DEFRA are funding a prototype in London. The LCCA is part of the steering group.

Energy Review, Stern Review and Review of the London Plan

As a catalyst for change the LCCA has been heavily involved in assisting in the development of policy and strategy in climate change, in particular, the removal of the regulatory barriers to sustainable energy and the establishment of a decentralised energy system in London.
The London Plan Review was published in May 2006 which makes climate change a top priority of the Review which sets radical new objectives for planners and developers to require new developments to connect to decentralised local energy supplies and achieve the highest standards of sustainable building design. The Review also doubles the carbon emission reductions that developments must achieve through on site renewable energy from 10% to 20%.
The LCCA is continuing discussions and providing information on the government’s Energy Review and Stern Review.    

GLA Group Energy Efficiency Revolving Funds

The LCCA has been working with the GLA Group functional bodies to develop energy efficiency revolving funds of the type implemented in Woking. An energy efficiency revolving fund is where a capital fund is established to invest in energy and water efficiency projects but the revenue financial savings are reinvested or ploughed back into the capital fund to reinvest in more projects and so on, rather than reducing the annual revenue budgets. In this way more can be achieved in implementing projects and without finding all of the capital investment necessary up front.
In the 2006/07 budget round the London Fire and Emergency Planning Authority was able to approve £3 million in a revolving fund to invest in energy efficiency and renewable energy projects. Other functional bodies were not able to approve similar funds in the last budget round but will be investing some of their existing budgets in energy efficiency projects. The revenue financial savings brought about by these projects can be reinvested to provide initial revolving capital funds which can then be supplemented with additional funds as part of the 2007/08 budget round.

London Transport Museum Photovoltaic Project

The original photovoltaic scheme comprised 26.91kWp of photovoltaic arrays. However, when the Museum asked the LCCA for help with their project the LCCA established that the original scheme did not capture all of the photovoltaic potential at the Museum and a revised more complete scheme was investigated.
The £505,000 project now comprises a 52kWp photovoltaic system with 43.02kWp of photovoltaic panels on the roof and canopy to be installed during the Museum refurbishment contract (Phase 1) and 8.98kWp of glass/glass louvres above the Main Hall to be installed after the Museum refurbishment contract (Phase 2). The solar energy system will generate 2,136,000kWh of renewable electricity and reduce CO2 emissions by between 1,415 tonnes and 2,075 tonnes during its lifetime.
The project benefits from a grant of £120,327 awarded under the DTI Major Photovoltaic Demonstration Programme, managed by the Energy Saving Trust, with the balance of funding from Transport for London.

Planning permission for the photovoltaic array system has been granted by Westminster City Council which sets an important precedent for implementing renewable energy in listed buildings. This is the first example of such a project for an historic listed building in the UK. Phase 1 has commenced on site and should be completed by May 2007 with Phase 2 to commence shortly after.
Palestra Photovoltaic and Building Integrated Wind Turbines Project
The £436,000 project comprises an 84kW renewable energy system with 63kWp of photovoltaic panels on the roof and 21kW of building integrated wind turbines (14 turbines) also on the roof. The combined renewable energy system will generate 3,397,000kWh of renewable electricity and reduce CO2 emissions by between 2,250 tonnes and 3,300 tonnes during its lifetime. The project is being funded by the London Climate Change Agency.
The project benefits from a grant of £155,276 awarded under the DTI Major Photovoltaic Demonstration Programme, managed by the Energy Saving Trust, with the balance of funding from the LCCA.
Palestra will be the new home of the LDA and LCCA and was chosen following a detailed evaluation, negotiation and selection process of a number of buildings that met the location and accommodation criteria. One of the key criteria was the energy performance of the buildings and Palestra was the only building evaluated that had a Building Research Establishment Environmental Assessment Method rating (BREEAM – Very Good rating). In order to improve the energy performance of the floors to be occupied by the LDA/LCCA still further and to contribute towards the Mayor’s Energy Strategy the LCCA negotiated with the developer to include their own renewable energy system configured to supply the LDA/LCCA floors.
With the implementation of energy labeling under the EU Directive on Energy Performance of Buildings this project is a good example of selecting the best energy performing building available and then the occupier improving the energy performance and reducing carbon emissions still by implementing their own renewable energy system.  
Planning permission for the wind energy element of the project has been granted by Southwark Council to add to the already installed photovoltaic element of the project. This will be the first example of a combined photovoltaic/building integrated wind turbine system in the UK.
A feasibility study is also currently under way to determine whether a fuel cell CHP trigeneration system could be installed in Palestra.

City Hall Photovoltaic Project

The £541,500 project comprises an 81.18kWp photovoltaic system with 63.18kWp of photovoltaic panels on the curved roof and 18kWp of solar shading on the eyebrow on the 9th Floor. The solar energy system will generate 3,582,480kWh of renewable electricity and reduce CO2 emissions by between 2,375 tonnes and 3,480 tonnes during its lifetime.

The project benefits from a grant of £270,757 awarded under the DTI Major Photovoltaic Demonstration Programme, managed by the Energy Saving Trust, with the balance of funding from the LCCA.
A planning application has been submitted and subject to planning permission the project should be completed by October/November 2006.
Fuel Cell CHP
City Hall has been identified for one of the fuel cell CHP locations to achieve a particular commitment in the Mayor’s Energy Strategy. Palestra is another potential fuel cell site and a feasibility study is currently under way for this site. The fuel cell CHP project at City Hall will be the subject of a separate feasibility study.

LDA Development Projects

The LCCA is working with the LDA in identifying LDA development projects in which local decentralised energy systems could be delivered by an ESCO on a design, finance, build and operate basis to give the LDA (and their developers) the advantage of such ESCO developments and to enable the LDA to take the lead by ‘showing by doing’ in complying with the London Plan and the Mayor’s Energy Strategy as well as significantly reducing CO2 emissions in new development.
The development advice for the proposed Dagenham Dock Sustainable Industrial Park Wind Energy System is an early example of such a project which should lead to the development of up to 4 large scale wind turbines that will contribute towards the renewable energy planning obligation for the site. The study was completed in June 2006 and is currently being evaluated.
The LDA has also asked the LCCA to assist them on the zero carbon development project recently announced by the Mayor. A site has been identified by the LDA and the LCCA is supporting the Steering Group on this work.

  
London ESCO

On 6 March 2006, the Mayor of London announced that the London Climate Change Agency selected EDF Energy, one of the largest energy companies in the UK and the owner of London Energy and London’s public electricity network, as the preferred bidder to set up a joint venture energy services company (ESCO) whose remit is to develop sustainable energy schemes for London.
EDF Energy was selected as a result of a competitive negotiated procedure process from a very strong field of 9 energy and utility companies who had registered an interest in being the private sector partner in the London ESCO.
The London ESCO will design, finance, build and operate local decentralised energy systems for both new and existing development. It will be a private limited company with shareholdings jointly owned by the London Climate Change Agency (with a 19% shareholding) and EDF Energy (with an 81% shareholding). The company will tackle climate change by developing local decentralised energy solutions to London’s power, heating and cooling needs. It will identify and develop sites across the capital where investment in sustainable energy technology would reduce carbon dioxide and other greenhouse gas emissions, which are contributing to global warming.
The LCCA and EDF Energy have exchanged a Memorandum of Understanding which sets out the details of the shareholders agreement, memorandum of articles and articles of association which will now be completed by lawyers to establish the public/private joint venture London ESCO this summer. At the outset the joint venture partners agreed to a twin-tracking approach to develop ESCO projects at the same time as undertaking the legal work to establish the London ESCO and the LCCA/EDF Energy joint venture team is working on a number of projects in advance of the formal establishment of the London ESCO.

Further information

For further information on the LCCA, contact info@lcca.co.uk . Briefing No’s 1 (February 2006) & 2 (March 2006) are also available from the same source.

 

Allan Jones MBE
Chief Executive Officer
London Climate Change Agency
9 August 2006
LCCA BRIEFING NO.3