October 2006

LONDON CLIMATE CHANGE AGENCY
ANNUAL REPORT 2005/06
 

Background

The establishment of the London Climate Change Agency (LCCA) was a manifesto commitment by the Mayor of London in the 2004 election. The LCCA 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.

The establishment of the London Climate Change Agency as a municipal company was approved by the London Development Agency (LDA) Board on 22 July 2005 and The London Climate Change Agency Ltd was subsequently established as a municipal company wholly owned by the LDA in March 2006.
One of the LDA’s five statutory purposes as set out in Section 4 of the Regional Development Agencies Act 1998 is to contribute to the achievement of sustainable development in the United Kingdom where it is relevant to its area to do so (i.e. Greater London). Such sustainable development includes sustainable energy, water, waste and transport.
The LCCA is a delivery agency and implementing projects in the sectors that impact on climate change, especially energy, transport, waste and water. The LCCA plays 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 2015, as the crucial first step on a long-term path to a 60% reduction from the 2000 level by 2050.
Due to the formative nature of the LCCA this report necessarily covers the period since inception rather than the previous 12 months. The progress in key activity areas have been, as follows:-

Creation of a Centre of Climate Change and Energy Engineering Excellence

Objective:

• The creation of a centre of climate change and energy engineering excellence, offering advice and support to the GLA Group, the London Boroughs, other public bodies and the private sector.

Achievements

• Established the LCCA as a limited company on 2 March 2006 with two credible Independent Non-Executive Directors (Gerry Acher of London Climate Change Partnership and formerly of KPMG and Lord Whitty, former Environment Minister at DEFRA). Allan Jones MBE, as Chief Executive Officer, is the only Executive Director currently.
• Developed a carbon accounting software tool for the GLA Group in conjunction with the Toronto Atmospheric Fund; it will be used to report on the total emissions arising from GLA Group activities on an annual basis.
• 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.
• 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.
• Recruited 4 qualified engineers and 1 climate change specialist with previous experience in decentralised energy, renewable energy and other climate change projects.  LCCA currently has 8 full time members of staff, 2 of whom are on secondment from The Carbon Trust and KPMG.  The new Engineering Director, Paul Yiannouzis started work on 16 October 2006.
• Liaison with and provision of advice to 6 London Boroughs and the Corporation of London, including presentations to/meetings with Chief Officers and elected members of the councils.
• Letter sent to all London Boroughs and the Corporation of London regarding presentation on the LCCA and consideration of how the Boroughs and the LCCA can work together. Resulting in meetings with 3 Boroughs to date and 2 dates for future meetings.  
• Held explorative meetings with circa 15 major landlords and interested parties as next steps in setting up a Better Buildings Partnership in London.
• Held GLA Group Energy Managers’ Workshop which identified 4 key areas where LCCA could provide assistance namely: procurement of low carbon technology, set up of energy efficiency revolving funds, merits of purchasing green tariff energy over investing the premium in on site low carbon or renewable energy technology and advice/training on best practice in energy and water efficiency and technology.
• Provision of technical advice to GLA Planning Decisions Unit on such matters as trigeneration and technical advice on specific major developments .
• Provision of technical advice to the Mayor and Deputy Mayor on specific major development proposals such as the Beckton Desalination Plant and Belvedere Incinerator.
• Liaison with and providing technical advice on major new and existing development, including presentations to/meetings with the London Boroughs, other public sector, developers and consulting engineers and architects on projects such as Elephant & Castle, Kings Cross, New Wembley, Crystal Palace, Lower Lea Valley/Olympics, Thames Gateway, Heathrow East Terminal, London Underground Trigeneration Cooling, South Kensington Project, Whitehall CHP and City of London projects.
• Stimulating the ESCO model and market for other Regional Development Agencies and English Partnerships.
• Liaison with and providing technical advice to the Mayor, Deputy Mayor, GLA Environment Team, Government and Review Teams, including presentations/ meetings on the proposed Further Alterations to the London Plan, New Mayoral Powers and Climate Change Duty and the Energy Review and Stern Review.

  
In progress:

• Recruitment of 2 further posts is underway.
• Development and formulation of energy efficiency revolving funds for the GLA Group currently under discussion.
• Assisting with the implementation of the Carbon Accounting tool for GLA bodies.
• Furthering work with London Boroughs in these areas identified collectively as being of use:
o Providing advice on the set up of Energy Efficiency Revolving Funds including information on examples used in practice.
o Dissemination of best practice and technical advice on energy efficiency technologies for planning officers.
o Provision of advice on setting strategic Borough planning targets in relation to climate change.

Flagship projects

Objective:
• To ‘show by doing’ in the delivery of flagship projects.
Achievements:
• London Transport Museum Photovoltaic Project

o 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.
o The 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 2,075 tonnes during its lifetime.
o 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.
o Planning permission was granted by Westminster City Council which set 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

o The 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 3,300 tonnes during its lifetime. The project is being funded and implemented by the LCCA.
o The project benefits from a grant of £155,276 awarded under the DTI Major Photovoltaic Demonstration Programme, managed by the Energy Saving Trust.
o Palestra is 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.
o 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 further by implementing their own renewable energy system.
o Planning permission was granted by Southwark Council and is one of the first examples of a combined photovoltaic/building integrated wind turbine system in the UK. The installation of the system has already been completed with commissioning to be completed in October 2006.

City Hall Photovoltaic Roof and Solar Shading

o The project comprises a 70kWp photovoltaic system with 55kWp of photovoltaic panels on the curved roof and 15kWp of solar shading on the eyebrow on the 9th Floor. The solar energy system will generate 3,100,000kWh of renewable electricity and reduce CO2 emissions by 3,000 tonnes during its lifetime. The project is being funded and implemented by the LCCA.
o The project benefits from a grant of £270,757 awarded under the DTI Major Photovoltaic Demonstration Programme, managed by the Energy Saving Trust.
o Planning permission was granted by Southwark Council and the project is scheduled to commence on site in October 2006.
In progress:

Fuel Cell CHP

o City Hall has been identified for one of the fuel cell CHP locations to achieve a particular commitment in the Mayor’s Energy Strategy. A feasibility study will be undertaken.
o Palestra is another potential fuel cell site and a feasibility study for a fuel cell CHP trigeneration system is currently under way for this site.
 
LDA Development Projects

o 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 could lead to the development of up to 4 large scale wind turbines (8MW total capacity) that will contribute towards the renewable energy planning obligation for the site.
o The LDA has also asked the LCCA to assist them on the zero carbon development project recently announced by the Mayor. The LCCA is also supporting the Steering Group in this work.  
London ESCO
Objective:
• The establishment of a public/private joint venture London Energy Services Company or ESCO is a key part of the LCCA strategy and business plan, particularly in terms of tackling market failure. The London ESCO will deliver low carbon decentralised energy solutions in new and existing development. Initially, the focus will be on cogeneration (combined heat and power), trigeneration (combined heat, power and heat fired absorption cooling) and integrated renewable energy on local private wire district energy systems and networks but will also include special projects such as fuel cells, environmentally friendly waste to energy technologies and renewable gases and biomass fuels.
Achievements:
• Development of project pipeline in advance of procurement of the London ESCO.  Further projects have subsequently been added to the list which now stands at circa 50 potential London ESCO projects with some 34 different parties.  Projects include EDF Energy and joint projects as well as those identified by LCCA.
• Procurement process undertaken from November 2005 to February 2006 and preferred partner (EDF Energy) selected in March 2006.
• Memorandum of Understanding (MOU) exchanged between the LCCA and EDF Energy in June 2006.
• Introduction of EDF Energy team to developers as LCCA’s intended partner in the London ESCO for the first tranche of priority potential London ESCO projects. The first tranche of immediate projects will deliver a reduction in CO2 emissions of approximately 310,000 tonnes pa.
• Regular working and Shadow Board meetings (running in parallel to legal meetings) set up to establish working practices and strategy.
• London ESCO Ltd established as a public/private joint venture company between London Climate Change Agency Ltd and EDF Energy (Projects) Ltd in September 2006. The final shareholders agreement reflects the significant negotiated positions of the MOU.  The basic financing model (19% LCCA; 81% EDF) has been retained, but greater flexibility has been introduced in the financing vehicles of projects to make best use of EDF’s financing abilities and make both parties investment go further than originally envisaged in the event that there are sufficient attractive projects.
• The London ESCO Board is a small technical executive board with the LCCA Chief Executive Officer (CEO) as the LCCA’s director and 5 EDF Energy (Projects) Ltd directors to maintain the unregulated status of the company. The LCCA Engineering Director is the LCCA’s alternate to act in the absence of the LCCA CEO and the LCCA Company Secretary and Finance Manager is an observer to maintain a financial monitoring/governance link between the London ESCO and LCCA
In progress:
• Draft heads of terms established with the LDA for the proposed Gallions Park - Zero Carbon Development, currently being marketed for private development. Dagenham Dock Sustainable Industrial Park and Silvertown Quays are also in the course of negotiation with the LDA.
• Pre Qualification Questionnaire submitted for the proposed Elephant & Castle development Multi-Utility Services Company (MUSCO) following which the London ESCO received notification that it will be invited to the next round subject to the LCCA forming a consortium for the MUSCO.
• Interim proposals are under way for the Kings Cross and New Wembley developments.
• Secondary opportunities for commercialisation of fuel cell CHP and transport, water services and renewable hydrogen identified with 3 separate companies as part of the London ESCO procurement exercise which is being pursued now that the primary objective of establishing the London ESCO has been achieved.
 
Inward Investment Projects

Objective:
• Working with the support of Think London in catalysing and encouraging investment in sustainable energy and green technologies in London and the build up of the resources (skills and materials) needed to complete them in support of the Mayor’s Energy Strategy and the LDA’s Economic Development Strategy. The LDA’s Green Alchemy – Turning Green to Gold report identified that the sustainable energy industry is set for growth and could be worth around £3.35 billion by 2015 employing between 5,000 and 7,500 people. 
Achievements:
• Negotiations and assistance in business planning on potential inward investment in London in low carbon/renewable energy/hydrogen technologies that will contribute towards the Mayor’s Energy Strategy. Active discussions are at advanced stage with 2 manufacturers considering setting up either manufacturing or assembly plants with associated training in London. Regular meetings with 5 companies plus exploratory meetings with other companies are being held.
In progress:
• Working with private waste contractors and London Remade on the research and development of anaerobic digestion, gasification and pyrolysis technologies (as part of integrated waste recycling systems) to develop renewable gases/hydrogen markets to meet the objectives in the Mayor’s Energy Strategy.
• Working with biomass providers to develop a biomass market in London.

Dissemination of Information
Objective:
• The dissemination of information on the LCCA’s activities and achievements in London to generate a catalytic effect in London, nationally and internationally. To be a catalyst for action to tackle global climate change.  
Achievements:
• Presentations by the Chief Executive Officer and other LCCA staff at circa 50 conferences/seminars/workshops since April 2005 to date.
• Circa 20 interviews and articles by Chief Executive Officer in the national media (newspapers, television and radio), technical and trade journals since November 2004 to date.
• More than 100 website articles and references on the London Climate Change Agency.
• LCCA Briefings – 4 published to date.
• Chief Executive Officer inclusion in the Greenpeace film on decentralised energy “What Are We Waiting For”.
• LCCA website – following successful procurement of the domain names www.lcca.co.uk and www.londonesco.co.uk temporary website pages were set up. LCCA fuller interim website subsequently established.
• Liaison with and attendance on the London Climate Change Partnership, London Energy Partnership and London Hydrogen Partnership steering groups and committees by an LCCA officer.
• Contributions to consultations on the Further Alterations to the London Plan, New Mayoral Powers and Climate Change Duty and the Government’s Energy Review and Stern Review, with particular emphasis on the regulatory barriers to decentralised energy. The Government has now committed to review the regulatory barriers and commission a study on how a future large scale decentralised energy system would impact on centralised energy and climate change as part of the Energy Review.
• Several Canadian, USA and Danish trade visits to the LCCA organised by the Foreign & Commonwealth Office, UKDTI and Think London, including presentations and meetings both at the LCCA and London Embassies.
• Launch of the inaugural Large Cities Climate Leadership Group (C20) by the Mayor and the LCCA in London in October 2005. The concept of the Group is that the world’s cities cause most of the world’s CO2 emissions, will be most affected by climate change and can therefore show the leadership and action to tackle global climate change. Second meeting of the Group will take place in New York in May 2007.
• The Large Cities Climate Leadership Group established a partnership with the Clinton Climate Initiative which was announced by Mayor Ken Livingstone and President Clinton in Los Angeles in August 2006. The Partnership will work together to reduce carbon emissions and increase efficiencies in the largest cities in the world.

In progress:
• Tendering for the construction of a full website is in progress.
• Further articles and films on the LCCA.
• LCCA Founders Forum in October 2006.
• Writing of a chapter of a new book entitled “Corporate Strategies for Climate Change & Sustainability”.
• Continuing discussions and meetings with No.10, DTI, Treasury, Defra and Ofgem on removing the barriers to decentralised energy.

Further information

For further information on the LCCA, contact info@lcca.co.uk . Briefing No’s 1 (February 2006), 2 (March 2006) and 3 (August 2006) are also available from the same source.

 

Allan Jones MBE
Chief Executive Officer
London Climate Change Agency