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Monthly Archives: December 2012
13 December 2012: DECC yesterday released their consultation on the ECO brokerage. Previous posts (here and here) have highlighted the potential of the brokerage to local authorities and community groups to further access the £1.3 billion annual funding directed through the Energy Company Obligation (ECO) to support the take up of energy efficiency measures. However, Government have taken the view that local authorities and RSLs will not be able to trade on the brokerage.
The ‘Guide to the ECO brokerage‘ sets out the Government’s case:
“Why can’t a Local Authority or Registered Social Landlord trade on brokerage?
The primary objective of brokerage has always been to stimulate the Green Deal market. Therefore in the very first instance we will look to restrict trading to domestic Green Deal Providers. However, over time we will look to open the platform to other sellers. We are committed to working with social landlords and local authorities to see how this can best be done.
Will energy companies be able to pick and choose which companies they buy from on brokerage? Could this disadvantage smaller Green Deal Providers?
ECO brokerage is a blind trading mechanism. Energy companies will not be able to see who they are buying from. Therefore, if a smaller Green Deal Provider can offer ECO at a competitive price they will be able to compete on the brokerage platform.
DECC will be monitoring ECO Brokerage trading activity for any evidence of uncompetitive behaviours from buyers and sellers.”
The ECO brokerage consultation adds that:
“53. …It should be noted that all Green Deal Providers, non-Green Deal Provider delivery agents, and Local Authorities and Housing Associations/Registered Providers of Social Housing can all still access ECO directly via a direct bilateral partnership with ECO obligated energy companies, although we recognise the challenges involved in this for some providers.”
The consultation makes sets out that there was a clear majority in favour for establishing a brokerage, and hence the Government will put a brokerage mechanism in place on “a voluntary basis while it carries out this consultation asking for views, and any supporting evidence, on the need to regulate energy companies to use the brokerage service.”
The Brokerage will operate as fortnightly anonymous auction where ECO providers will be able to sell “lots” of ECO Carbon Saving Obligation, ECO Carbon Saving Communities and ECO Affordable Warmth, to energy companies in return for ECO subsidy. The auction process will be delivered by the Government Procurement Service through an e-auction online platform that allows energy companies to bid in real-time between 9am and 5pm on each auction day. Dates of first auctions are as follows:
18 December – first full test auction
15 January – first full live auction
Auctions will then take place fortnightly after that
An ECO brokerage Impact Assessment is also available to download.
December 2012: Islington has posted a really entertaining video on Youtube describing some of the background to the development of the Bunhill CHP Scheme, as well as the benefits being delivered to the local community through the provision of lower carbon, affordable, heat and power. The project has taken close to 10 years to come to fruition, and the district heat scheme extends across Finsbury Leisure Centre, Ironmonger Row Baths, and Stafford Cripps, St Lukes and Redbrick Housing Estates. Do watch if you get a chance!
December 2012: Interesting press release from the Cabinet Office stating that Government will use its considerable buying power to contract PPAs (power purchase agreements) directly with stalled renewable electricity projects.
“The Government Procurement Service (GPS), part of the Cabinet Office Efficiency and Reform Group, is the UK’s largest energy customer, spending £1.5bn a year on gas and electricity. GPS buys energy for 75% of the entire public sector which accounts for 3% of total UK energy demand. In the New Year it will open a pilot to diversify 2% of its demand, worth £25m a year.
For the first time ever, contracts will be offered direct to renewable generators for a set proportion of their capacity for up to 25 years. This will appeal to new projects which can bank on the guaranteed business to attract investment. We are aware of at least 150 projects which are currently stalled and may need finance. A small 10MW generator is estimated to return £5m a year to the local economy as well as creating jobs in the energy and construction industries. This pilot is for non-intermittent power such as biomass and energy from waste.”
December 2012: No information as yet from DECC on when further details on the ECO brokerage will be released (see earlier post – The ECO brokerage – on this). There has however been a little information on the brokerage from a couple of sources which are worth mentioning:
- An Inside Housing story stating that “The vast majority of social landlords will be excluded from the first sustainability auction for energy company obligation funding to improve the energy efficiency of homes.”
- And a recent consultation by Ofgem on the ECO mentions that the regulator will have “no role in administering the ECO Brokerage and this Guidance does not address the brokerage or its administrative requirements. However we recognise that, on occasion, suppliers may seek credit for measures obtained through this platform. In order for such measures to be considered eligible under ECO, their installation, reporting and notification (etc) should be demonstrably compliant with the Order and this Guidance. For further information on the ECO Brokerage Mechanism please contact ECObrokerage@decc.gsi.gov.uk.”
DECC held an ECO brokerage workshop with PWC yesterday – where the software for the ‘ebay’ style online auction platform was trialled. Hopefully some further information will be released shortly…
December 2012: Following last week’s LSE Cities ‘Electric City’ conference which took place at the fascinating ‘Former Shoreditch Electricity Generating Station & Refuse Destructor’ some material have been posted online.
- A series of essays on the theme Electric City have been brought together in a publication for the conference which can be downloaded here. There’s not much specifically on London’s energy challenges, but the Global Problems: City Solutions contribution highlights an interesting point suggesting that “According to some reports, urban regions already produce ten times more renewable technologies patents than rural regions.”
- A selection of video interviews from the conference are posted on Youtube
- And the Guardian has posted a series of ‘exclusive data visualisations’ from the conference which includes ‘Unpacking London: energy & pollution’ highlighting that “Three quarters of London’s energy consumption is fueled directly by oil and gas, with the vast majority of the remainder generated by fossil-fuel-powered electricity. Just 2.1% comes either direct from waste and renewables or from renewably-generated electricity.”
6 December 2012: Ahead of the start of Phase III of the EU Emissions Trading Scheme (EUETS), which starts on 1 January 2013, DECC has today introduced new legislation which looks to simplify the rules around the CO2 ‘cap and trade’ scheme.
The EUETS covers around 1,100 energy-intensive industrial installations in the UK such as power stations, refineries and large manufacturing plants. Not surprisingly, not many of these participants are located at London, however, there are a few at the very lowest end of the EUETS requirements, and it is these sites which are addressed in the changes made today. DECC’s press release states that these ‘small emitters’, many of which are hospitals, have been given the opportunity to “‘opt-out’ of the EU ETS from 2013 into a lighter touch alternative scheme, which will address the disproportionately higher administrative costs faced by these installations.”
The ‘opt out’ list includes the following schemes in London:
- Bloomsbury Heat & Power
- The Natural History Museum Boilerhouse
- St. Thomas’ Hospital
- Guys Hospital
- Great Ormond Street Hospital for Children NHS Trust
- Chelsea and Westminister Hospital
- Royal Free Hospital Hampstead
- St Georges Healthcare NHS Trust
- Pimlico District Heating Undertaking (PDHU) Pump House
Other sites include the Hammersmith Hospital Energy Centre and the University College London Hospital.
Common to many of these installations is that they had chosen to utilise Combined Heat and Power (CHP) systems to provide greater energy resilience on site, access more affordable heat and power, and reduce the site’s overall environmental impact related to energy consumption. However, by choosing to install more energy efficient generation directly on site, rather than importing electricity from the grid, they also passed the threshold on energy consumption for inclusion under the EUETS rules (20MW thermal input). This brought these relatively modest generation sites under the complex EUETS rules, hence, this new action by Government to simplify the rules under their operation under the trading scheme is to be welcomed.
December 2012: Islington have officially inaugurated their council-owned CHP system which “will produce cheaper, greener heat for hundreds of residents in the south of Islington in competition to the big utility companies.”
The press release sets out that the Bunhill Energy Centre houses a 2 MWe gas-fired Combined Heat and Power (CHP) engine which is connected to a kilometre of new district heating network taking hot water to more than 700 local homes on the Stafford Cripps, Redbrick and St Luke’s estates, as well as the newly reopened Ironmonger Row Baths, and Finsbury Leisure Centre.
The efficiency of the new system is further improved by an on-site 115 metre-cubed thermal store (the tall cylinder seen above).
The energy centre was specially designed to minimise noise and adopted a “plug and play” method of construction with all the major components manufactured and prefabricated off-site in order to reduce disruption to residents.
The energy centre and heat network will be fully owned and managed by the council, and was funded by grants from the London Development Agency and the Homes and Community Agency. The council ownership and management of the scheme will help to maximise the benefits of the scheme for the local community and energy bill savings for residents. For more about the Bunhill Energy Centre and heat network see www.islington.gov.uk/heatnetwork
The Bunhill Energy Centre is part of Islington Council’s Decentralised Energy Programme and marks a return to energy production for Islington Council – for more than 70 years – from 1896-1969 – the borough had its own coal-powered station in Eden Grove, Holloway (more of which on this nice flickr post).
The top link to the site sets out some current concerns over the energy proposals on the site, especially in relation to connecting the different energy centres on site (which would hep form a more efficient area-wide heat network), and also the likelihood of using biomethane gas (the proposal in the developers application is to use the Green Gas Certification Scheme to link the London scheme to a site which is injecting biomethane elsewhere in the national gas transmission grid). The blog entry states that no such injection schemes are currently operating, which was true at the time of writing (early November 2012) but, coincidentally, the Poundbury anaerobic digestion (AD) in Dorset began operation just over a week ago (see here and here) and is injecting renewable gas generated from the AD into the gas grid.
December 2012: “Connecting the Walworth Academy into the local district heating scheme was the final phase in a rebuilding and expansion of the school’s facilities, giving it a new, state of the art study environment for engineering, science, technology and mathematics.” Heat is supplied from the Aylesbury Housing Estate’s district heating scheme. Further information here and here.
December 2012: The Office of National Statistics (ONS) last week issued its annual statistical bulletin with provisional figures of excess winter deaths (also referred to as excess winter mortality – EWM) in England and Wales for the winter period 2011/12, and final figures for the winter period 2010/11. Points to note include some important results in relation to London:
- In common with other countries, in England and Wales more people die in the winter than in the summer.
- EWM = winter deaths – average non-winter deaths
- There were an estimated 24,000 excess winter deaths in England and Wales in 2011/12 – an 8 per cent reduction compared with the previous winter.
- The regions of London, the South East and the East of England showed an increase in EWM between 2010/11 and 2011/12, with the largest percentage point increase occurring in London (2.0 percentage points higher)
- London also had the highest EWM index in 2011/12, with 18.9 per cent more deaths in winter compared with the non-winter period, compared with an average of 15.4 per cent for England and Wales
- Reference Table 2 shows that the increase in London occurred exclusively in people aged 85 and over. Furthermore, people aged 85 and over in London had the highest EWM index of any age group in any region.
- The Health Protection Agency reported that London had the highest level of influenza-like illness (ILI) within England and Wales (Health Protection Agency, 2012a), which may partly explain why this region also showed the highest level of excess winter mortality.
Direct link to the ONS bulletin here.
3 December 2012: Energise Barnet CIC, a social enterprise, has submitted a plan to Barnet Council to create £200 million of social, economic and environmental benefit through the installation of energy saving measures and renewables in 40,000 homes and buildings. Further details are on the following Energise Barnet press release.
Energise Barnet were awarded funding last year from Barnet’s Big Society Innovation Bank to help develop the proposal, and were also selected as a Pitch Pledge initiative (for which, see further information here and here).
Barnet highlighted earlier this year (see Q37) that it had “fully participated in both the Mayoral Group for London Councils and the Future of London research project on the Green Deal. It has used this involvement to enable an internal scoping process to take place on how it can best engage with the forthcoming national Green Deal agenda. From May 2012 the Council will begin work on preparing an Outline Business Case to explore and consider the way in which the Council might support the market to promote uptake ofthe Green Deal amongst local residents.”