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Monthly Archives: December 2013
December 2013: This month the Mayor has been asked questions in relation to:
a debate on how the Mayor will look to address the number of excess winter deaths in London; the impact on London as a result of the Government’s redefinition of fuel poverty; the Mayor’s plans to help tackle fuel poverty (MQs referred to in this answer can be seen here 4251 and 3836); the long terms impacts of climate change; RE:NEW targets to 2015; the Mayor’s view on the recent ‘Green Crap‘ debate; the level of increase in London domestic energy bills over the past three years; funding to improve energy inefficient damp London housing; windfall tax on energy suppliers (see following for link to answer referenced); the energy costs to Londoners as a result of gas fracking; Canary Wharf waste heat offtake; details of the recent £5.6m DECC funding to tackle fuel poverty in London; promoting low cost low carbon energy supplies in London (also see the following MQ 4254); the impact to London as a result of the recent changes to ECO; supporting community-led energy projects such as Brixton Energy; the Mayor’s Low Carbon Entrepreneur competition; opportunities for the London Pension Fund Authority (LPFA) to invest in low carbon projects; thes costs of nuclear power (read Liberum Capital note referred to in question here); London’s top 500 energy-consuming buildings; Nuclear Power versus decentralised energy; the Mayor’s support for fracking and nuclear power; the Mayor’s ambition – as set out in his recent draft Housing Strategy to retrofit London’s “entire stock for improved energy performance by 2020″; the late publication of the RE:NEW evaluation report; the Mayor’s energy advisor visit to heat pump system at One New Change; the Mayor’s energy advisor visit to the Barkantine CHP system; the Mayor’s work with the Better Buildings Partnership; the Mayor’s energy advisor’s work with the C40; the Mayor’s energy advisor visit to Islington’s Bunhill CHP scheme; the Mayor’s energy advisor visit to the Olympic site CHP system; recent events the Mayor’s energy and environment advisor has spoken at; the Mayor’s view on Labour’s proposals for an energy price freeze; future funding for the RE:NEW support team; the Mayor’s comments on wind power; RE:NEW housing retrofit targets; the award-winning Bunhill CHP; the number of fuel poor households to be delivered by RE:NEW; London’s resilience to a nuclear power station radiation leak; fuel poverty advice given to callers to the Mayor’s Know Your Rights helpline; the impact on solid wall insulation as a result of changes to the ECO; tower block residents assisted under the RE:NEW programme;
Previous months questions to the Mayor can be found here.
December 2013: An oral evidence session between officials and the London Assembly Budget & Performance Committee (see earlier post for details) highlighted the slow progress of the Mayor’s domestic energy efficiency retrofit programme RE:NEW. A new paper (06a(v)) presented to the 18th December meeting of the London Assembly Budget Monitoring Sub-Committee provides some data helping illustrate the extent of the shortfall.
The current forecast for 13/14 (right hand chart) shows that RE:NEW is predicted to just miss the project target – however, the performance level to date indicated shows that even this reduced level of delivery is still some way off. The oral evidence session (referred to above) in fact suggests that only 3% of the 13/14 target has as yet been achieved (996 tonnes of CO2 compared to a target of 29,416 – earlier post). Paper 06a(v) provides some explanation for the slow progress:
- Delivery of the RE:NEW Phase II carbon targets is significantly delayed and contractors will miss their obligations. This is largely due to delays in availability of ECO (government subsidy). Delivery of the carbon savings from the interim Support Team has exceeded targets for quarter two
- Performance payments have been withheld from contractors and the funding is being reallocated to the RE:NEW Support Team in order to reduce the shortfall in performance. However, this is not sufficient to completely mitigate the lower savings from RE:NEW Phase II and this, combined with a delay in confirmation from the European Investment Bank for ELENA funding prior to commencing procurement of the full RE:NEW Support Team, means its is forecast 75 per cent of 2013/14 carbon targets will be achieved.
- The targets for future years have been reviewed and updated in light of the above and as planned. They have been reduced for 2014/15 and 2015/16, but an additional year of delivery (2016/17) has been added, which leads to an increase in carbon savings overall – albeit over a longer period.
The paper goes on to report latest CO2 saving estimates of two further Mayor’s climate change projects – RE:FIT (the public sector building retrofit project) and the London decentralised energy programme. The latter states that “Significant progress has been made on several projects, particularly with regards the Lea Valley Heat Network, Lakeside Energy from Waste, Greenwich Power Station and the Kew Gardens Decentralised Energy scheme.“
20 December 2013: The Mayor today published for consultation his budget for the GLA group for 2014-15 (press release).
The budget document states that a “new look GLA business plan has been published which includes a set of key performance indicators (KPIs) covering all main Mayoral policy and programme activities to be delivered by the GLA.” It’s welcome to see that amongst the 10 “major GLA programmes supporting the Mayor’s ambitions” [p7] a key deliverable will be “retrofitting more of London’s homes and public workplaces, saving carbon and cutting bills” – referring to the RE:NEW and RE:FIT programmes respectively.
Page 14 of the document also states that:
“The Mayor is continuing to work towards improving London’s environment.
Energy supply and master planning is key to delivering sustainable development for London’s economy. Investment will continue through a Decentralised Energy programme to help bring decentralised energy projects to the market.”
At the same time however, it appears from the draft budget that the ‘Development, Enterprise & Environment’ Directorate is facing a massive reduction in its funding from the Mayor. No separate breakdown for the ‘Environment’ section is provided, but the data (table below) indicates that:
- The draft 2013/14 budget for this Directorate seems to be have massively overestimated – the current forecast outturn being 25% lower than predicted. It’s not clear however what is contributing to this huge underspend.
- The level of underspend must have contributed to a significantly reduced future budget for the department – from a forecasted £31.2m just over a year ago, down to £19.9m for the forthcoming year (a 36% reduction)
- And the 15/16 plan for the ‘Development, Enterprise & Environment’ Directorate is down to just £10.7m – a 66% reduction from the forecasted 13/14 budget
- The planned reduction in budget for this Directorate far exceeds all others, some of which – like the Mayor’s Office – will remain static over the three year period.
There’s unfortunately to detail whatsoever within the budget document on the specific environment-team spend, or of future funding going to individual programmes. No further information is provided on the KPIs for the 10 ‘key deliverables’ (as mentioned in para 1 above) – however – future RE:NEW and RE:FIT programme targets to 2016 were recently set out in the Mayor’s draft Housing Strategy. Additionally, an interesting exchange on the Mayor’s retrofit programme RE:NEW was recorded in a November 2013 evidence session on the draft budget to the London Assembly Budget & Performance Committee (see page 17 of transcript) – also copied below:
December 2013: The Mayor announced last week that he has commissioned work to “create the capital’s first Long Term Infrastructure Investment Plan”, which will make a high level assessment of the full range of infrastructure delivery in the city, looking at how it is managed currently and what could be improved. The scope of the plan will cover public transport, roads, energy, water, sewerage, waste, broadband and green infrastructure
As part of this work, a Call for Evidence has been issued setting out five ‘core questions’ (see link for details), open to all to respond to, with a deadline for submissions of 24 January 2014.
The Mayor’s Infrastructure Group has been leading on the development of the plan, and their December 2013 meeting set out a working paper with some further detail on what the plan will consider, including the consideration of climate change and future energy demands on London. Included in this paper are a number of important proposals including mention of developing a London-wide Energy Master Plan and a GLA-led body delivering Green Infrastructure:
- “To address these issues, and address the implications of climate change, a range of recommendations are being proposed. All need further explorations in terms of feasibility and value for money, but provide a starting point for determining how London may need to respond to its infrastructure needs. The list of draft proposals to date is attached at Annex A; they include: Develop an Energy Master Plan for London, based on favoured approach of either continued nationally led centralised provision, or a decentralised model based on local energy production from a range of low and zero carbon energy sources. (Favoured approach to be set out in the Infrastructure Investment Plan for London).
- Create a GLA-led delivery body to deliver green infrastructure projects to reduce the amount of rainwater entering the drainage system. Potentially to be funded from the water companies and developers.”
Potential concerns over future stresses to London’s electricity system led to the Mayor writing recently to Ed Davey, Secretary of State for Energy, and the formation of the Mayor’s High Level Electricity Working Group.
A strategic outlook on London’s future energy needs (both power and heat) is an absolute requirement of any future London infrastructure plan: much of London’s electricity distribution assets are in need of replacement, London’s population is set to grow significantly to 2020 and beyond, and the the Mayor’s own target for London to source 25% of its energy needs from decentralised energy will require a significant shift to the introduction of low carbon, localised generation capacity being introduced onto London’s electricity network.
The Long Term Infrastructure Investment Plan for London will be produced in two stages – an interim report (inviting comment) in February 2014 and a final report in Summer 2014.
December 2013: National Grid news release announcing that “Work to dismantle the gas holders at National Grid’s site in Battersea got under way recently and the local community are being invited to find out how this and future work will play a part in the exciting redevelopment plans for the area.
“The site was once used to produce town gas which was made from coal. However after the discovery of natural gas under the North Sea town gas became obsolete and the gasworks closed. The gasholders however continued to be used for gas storage but now improvements to the gas network and storage methods mean that they are no longer needed. Their removal will help transform the area enabling the site to be redeveloped and much needed housing to be built.”
Some fascinating historical background to the site can be found at www.BatterseaGasholders.com. And here’s a great drawing of one of the Battersea gasometers – part of a series of drawings of London gasometers – by artist Daniel Preece.
December 2013: The Mayor’s recently released draft housing strategy states that “The capital also has some of the worst housing conditions in the country, thus prioritising estate based regeneration through improving the quality and energy efficiency of existing homes remains a key priority. To achieve this the Mayor will make available funding to ensure that by 2016 all council landlords will be in a position to independently resolve their Decent Homes backlog, and will support affordable housing providers to retrofit their entire stock for improved energy performance by 2020.”
Section 2.6 of the consultation paper directly addresses ‘Retrofitting and improving energy efficiency’ and provides some useful information on the Mayor’s ambitions for his flagship environmental programme, RE:NEW:
“To increase retrofit numbers under the government’s Energy Company Obligation (ECO) and Green Deal schemes, the RE:NEW programme has put in place measures to assist all large landlords in London to identify works that can be carried out to their stock, procure the works, access finance and manage contractors. This support will continue until at least 2016, maintaining the momentum for the successor ECO arrangements. The GLA is keen to expand retrofit activity on a more strategic area, or even whole borough, basis. The Green Deal also represents an innovative way to finance energy efficiency works which saves money for individual households. The Mayor will continue to promote the opportunities that the Green Deal offers to Londoners across all tenures. As Table 1 shows, the projected rate of delivery in London is therefore expected to increase significantly over the next three years. “
All of this may however change markedly following the Government’s recent announcement that it will scale back the level of support going to insulation through the ECO as well as significantly reduce the level of solid wall insulation (SWI) installations: the boost in support to SWI systems was often quoted by Government as being a huge advantage to the Mayor’s retrofit ambitions in London due to the high prevalence of solid wall homes here.
December 2013: A run through some of the exciting decentralised energy developments currently being taken forward in London – as detailed by Energy for London – ahead of the major national Heat13 conference, which took place in London last week.
December 2013: Presentations and an audio record of the the recent Future of London workshop on the ECO and RE:NEW have recently been posted online. This was a really helpful event include contributions from the GLA’s interim RE:NEW Support Team on the range of areas they provide help to London local authorities with – see slide below (and for further details on their activities see an earlier post here), Havering Borough Council, EDF Energy, and Agility ECO – an interesting new consultancy working with local authorities on the ECO, made up of previous supplier obligation experts at British Gas.
December 2013: The latest GLA Investment Performance Board meeting includes a useful progress report on the various Mayoral delivery programmes. ‘Project Performance Report‘ paper 10b Appendix 2 includes information of some challenges currently being faced by the Mayor’s residential energy efficiency scheme RE:NEW. The paper states:
“Delivery of the RE:NEW Phase II carbon targets are significantly delayed and contractors will miss their contractual obligations. This is largely due to delays in the availability of ECO. The mitigation options are being reviewed including withholding performance payments and reallocating funding to the RE:NEW Support Team to reduce any shortfall in achieving the carbon targets. This combined with a delay in having to wait for confirmation from the EIB for ELENA funding prior to commencing procurement of the full RE:NEW Support Team means the 2013/14 carbon targets may not be achieved…”
The delays have led to the project being graded an ‘amber’ rating under the paper’s ‘traffic light’ performance system.
- RE:NEW has retrofitted over 99,000 homes to date since it was created in 2009
- Over the next three years, RE:NEW will aim to support the letting of contracts that will save approximately 186,000 tonnes CO2 per annum through retrofitting approximately 232,000 homes
- Capita Symonds were appointed to operate an interim RE:NEW Support Team – and began work in June of this year, with the GLA’s £150k funding covering programme activities until the end of December 2013. The RE:NEW paper proposes extending this funding by up to £200k for the Support Team to continue activities until the end of March 2014.
- In contrast to the Investment Board’s mention of programme delays, the Housing Group’s paper relates that “progress made by the [RE:NEW Support] team to date has been excellent. The target of 1,500 tonnes of CO2 saved has been substantially exceeded; two contracts have been signed, with Brent Housing Partnership and LB Lewisham representing a total capital value of £24 million, and a saving of 4,333 tonnes CO2 per annum. There are a further 6 projects in procurement equating to a further £17.5 million capital investment and a saving of almost 6,000 tonnes CO2. This includes projects from Tower Hamlets Homes, LB Wandsworth and LB Havering. A further 17 boroughs and housing associations are engaged with the Support Team at the earlier stages of project development.”
The Housing paper also relates that the GLA is hoping to secure up to £3.85 million from the European Investment Bank’s (EIB) ELENA programme “to procure the full RE:NEW Support Team for three years”. The funding process with the EIB has however taken longer than anticipated, leading to the necessity to provide funding to an interim support team.
The paper interestingly also sets out risks associated with not securing this ELENA financing, as well as not being able to access sufficient ECO funds as a consequence of the Government’s recent pronouncements on the supplier obligation energy efficiency programme. The paper states “Changing the ECO model would require secondary legislation…The [GLA] Environment Team is currently developing a proposed lobbying approach to help to address this risk, which may include lobbying for a regional target. If successful this could improve the follow [sic – must be ‘flow] of funding for projects.”
The paper highlights that a formal submission to the EIB has now been made and “funding confirmed in principle” should be sometime this month. Hopefully the EIB will be presenting the GLA with a welcome Xmas present this year – watch this space!
December 2013: In response to a series of Mayoral Questions (here, here and here) the Mayor has now posted his submission to the Department for Communities and Local Government (CLG) controversial (see here, here, here and here) Housing Standards Review report and consultation.
The MQ responses highlight that the Mayor has written to CLG’s Secretary of State, Eric Pickles, expressing “concerns with proposals for a National Standards set which could limit the GLA’s ability to apply planning policy on housing design and space standards as well as energy standards in new housing“.
The Mayor has also asked Mr Pickles to meet in order “to discuss these proposals, and requested the opportunity to make further comments, once CLG reaches a clearer position on the proposals”.
The Mayor’s submission document sets out that:
- London developments are already demonstrating that the carbon compliance level could be more stretching without undermining viability.
- London’s ‘interim’ standards should be retained and continue to be applied in accordance with the London Plan energy hierarchy
- Disputing the Housing Standards Review view that Government “does not believe that an interim level would be helpful to developers and is not minded therefore to set one in a nationally described standard”, the Mayor responds “On the contrary, the setting-out of a clear strategy and requirements over time in the London Plan, including ‘interim’ targets between Building Regulations and Zero Carbon has effectively created market certainty, allowing developers to innovate and to bring down costs, in a manner that serves government’s intentions from 2016.“
- That the “solutions developers are obligated to consider under the London Plan ‘energy hierarchy’ do not lead to technological blind alleys. On the contrary, heat networks are fuel and technology flexible. Rather than creating ‘blind alleys’ they make the transition to zero carbon sources of heat easier” and that
- “In the absence of the [London Plan’s] approach” the Government’s proposed changes would “undermine a key tenet of DECC’s Heat Strategy for cities“.
The submission importantly states that: “CLG have agreed to meet with GLA officers to discuss interim arrangements which allow the Mayor to maintain London Plan 2013-2016 carbon reduction targets”
A recent assessment of the energy policies under the London Plan – undertaken and published by the GLA – sets out that a significant level of energy-related commitments have been secured including:
- Equivalent of circa £32m investment secured through energy efficiency measures alone.
- Circa £20 million of investment in new CHP plant able to produce 29MW of electricity and heat.
- Circa £133 million of investment in communal heat network infrastructure for ~ 53,000 dwellings
- Circa 55 permanent jobs created in maintaining heat network infrastructure and associated energy supply plant. Additional jobs will also be created in the supply chain
The House of Commons Environment Audit Committee undertook their own review of the Housing Standards Review document, publishing their results on 20 November. The report echoes the Mayor’s sentiments stating:
- That local choice in favour of practical, sustainable local solutions will be radically curtailed and replaced with a lowest-common-denominator national standard
- That the proposed replacement for CSH standards on energy and carbon emissions, the 2016 zero carbon homes standard, has been significantly diluted
and goes further [para 33]:
- The specifications around the zero carbon homes target have been watered down to such an extent that the proposed standards in Building Regulations now fall some way short of the higher levels of the CSH.
- There is no guarantee that further dilution will not occur in the run-up to the implementation of zero carbon homes in 2016.
- DCLG must maintain CSH energy assessments as a tool for local authorities to lever in renewable energy until Building Regulations deliver genuinely zero carbon homes, which was the original target and is defined by CSH level 6.
There’s no information over whether the Mayor has met with Mr Pickles as yet – and CLG have as yet not indicated when they are to finalise and publish their conclusions to the Housing Standard Review’s proposals. However it’s clear that the London Plan’s energy and climate policies have – and are continuing to – create a major shift in the development of more energy efficient buildings in London. Developers, architects and sustainability experts are delivering some of the most innovative green buildings in the world here in London as a consequence of the London Plan, and hence it would be a huge surprise if the Mayor allowed his successful planning policies to be diluted by the Government’s latest – and hugely confused – zero carbon buildings proposals.
1 December 2013: …is not anywhere on Number 10 or DECC’s websites but behind a ‘paywall’ in today’s edition of the Sun on Sunday. But is now also reproduced below:
Cameron: We can help the poorest and stick to our green policies
Coalition on pledge to keep energy bills down
By DAVID CAMERON, Prime Minister, and NICK CLEGG, Deputy Prime Minister
LABOUR leader Ed Miliband rocked Westminster with his pledge of a 20-month freeze on energy bills.
While ministers scoffed it wouldn’t work, they were stung by its popular appeal with voters.
Now after two months of head-scratching, they have come up with an alternative plan to keep prices down.
Here the Prime Minister and his Lib Dem deputy reveal plans to slash £50 off the average bill – and explain how they’ll do it:
BECAUSE of the hard work of the British people, and because we have stuck to our long-term economic plan, Britain’s economy is now on the mend – and we’re determined to help families in every way we can.
The Coalition is offering real help in these hard times: income tax cuts, a council tax freeze, a fuel duty freeze and free school meals for young children.
We have only been able to do this because we have taken difficult decisions and our economic plan is working.
This week, we will announce further help: proposals that will be worth around £50 on average to energy bill-payers.
We’re doing it without taking any help away from poor families or sacrificing our green commitments; and in a way that will keep Britain’s lights on in the long-term too.
When you look at your bill you see it is made up of various costs. Some of these we can’t control.
Most of what you pay is determined by the price of energy in the global market – the gas and oil we’re buying from the Middle East or Europe.
Politicians in the UK cannot wave a magic wand over these prices. To pretend you can is fantasy politics.
But there are bits that government can control – the parts of your bill that go to helping the poorest families heat their homes and to making Britain more energy efficient.
Some say we should drop these commitments entirely but we do not agree. As we approach winter, we refuse to turn our backs on the worst-off families. And if we abandon our green commitments, it is our children and grandchildren who will pay the price.
This Coalition Government has never pursued quick fixes today when they’ll hurt people tomorrow – and we’re not going to start now.
So we are going to stick to these commitments but we are not going to ask you to pay for all of them through your bills.
The two million poorest families who currently receive a discount on gas and electricity will continue to do so, but Government will pay for it. We’re able to afford this because we have cracked down on tax avoidance – leaving us more money to help struggling families. We are also changing the way we fund improving energy efficiency in Britain’s homes.
We will all be better off when our homes lose less heat, so we want the energy companies to help insulate as many homes as possible over the next decade.
But – apart from in the worst-off homes – we’re going to spread the costs of these programmes over a longer time frame, reducing people’s bills.
And to make sure we carry on cutting enough carbon, the Government will pay for new incentives for people to insulate their homes.
Alongside the Green Deal, when you buy a new home you could get up to £1,000 from Government to spend on energy-saving measures – equivalent to half the stamp duty on the average house – or even more for particularly expensive measures.
It is an all-round win. Better insulation means cheaper bills, it will cut carbon emissions and boost British businesses who provide these services.
On top of that, we will offer cash incentives to landlords of the least energy-efficient properties so that, when they are between tenants, they can better insulate their properties. And we’ll also make sure our schools and hospitals are more energyefficient, too.
Taken together, these things mean we will meet our green commitments and support those employed in the insulation industry but, crucially, without putting the cost on energy customers.
Labour have promised a temporary price freeze on energy bills. But they’re taking people for fools. Energy companies would hike up prices both before and after the freeze – so families would end up paying more.
Not only that, by cutting investment in green energy, their freeze would threaten thousands of jobs.
Labour’s con is the worst of all worlds. When an offer sounds too good to be true it usually is.
The Coalition has come up with a serious and credible plan that actually works.
By taking the time to get this right, we’ve got the best outcome all round. No poor family will lose a penny of help.
Our clean energy sector will get the investment it needs, the lights will stay on and we will cut just as much carbon as we planned.
Instead of a fake giveaway, we’ve found another way to support Britain’s hard-pressed families when they need it most.