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Monthly Archives: March 2014
March 2014: As part of its ambition to be a ‘junior’ or ‘license lite’ electricity supplier, the GLA last week released a tender advert seeking the “provision of Electricity Market Services to an Applicant for a UK Electricity Supply Licence Services to the Greater London Authority (GLA).”
Under rules Ofgem issued in 2009 [and after a two year process (see para 3.59 (p99) of the 2007 Energy White Paper which kick started this activity!)] , Ofgem introduced additional licensing options to make it easier for small energy companies including decentralised energy schemes to operate as a licensed supplier on the public network. The key element of making a ‘license lite’ supplier’s business ‘easier’ is by releasing them from having to engage in a series of complex electricity industry supply codes and actions (such as the Balancing & Settlement Code (BSC), data transfers, settlement, being party to the Master Registration Agreement (MRA), and being signed to the Grid Code and the Connection and Use of System Code (CUSC) – and more!)
However, the rules set by Ofgem still require the license lite supplier to have arrangements in place with a fully licensed third party, who is able to deal with these codes and action, and who can act on behalf of the license lite supplier to ensure that it is fully operating under the rules of the electricity market. The tender released by the GLA is seeking to establish a relationship with a ‘third party full licensed supplier’ for these services. The key question to this whole process has always been ‘what is the benefit to the third party – who has invested in complying with all these codes and actions – of offering these services to a license lite supplier’? The GLA tender is seeking to address this key issue and see if there is in fact any appetite in the market for a fully licensed supplier to offer these services to what is in effect a potential competitor.
Interestingly, the Mayor’s energy advisor, Matthew Pencharz, stated during an evidence session to the London Assembly Environment Committee earlier this week, that two companies have already expressed an interest in the tender to the GLA.
“TfL is seeking tenders on behalf of the GLA for the provision of electricity market services as described below.
The GLA requires electricity market services to support an application for a GB electricity supply licence by the GLA under proposals of the UK Office of Gas and Electricity Markets Authority of 6th February 2009 entitled – ‘Distributed Energy – Final Proposals and Statutory Notice for Electricity Supply Licence Modification (Ref: 08 / 09).
Under Ofgem’s proposals, Ofgem may enable an applicant for an electricity supply licence (in this case the GLA) to be granted a licence without the applicant needing to become a party to the Balancing and Settlement Code and Master Registration Agreement and other codes, providing the licence applicant has presented a realistic implementation plan for robust alternative arrangements with another licensed electricity supplier to provide services, to enable the electricity market to function without the GLA being a party to the relevant codes.
The GLA is seeking parties interested in providing or securing the provision of robust and cost effective alternative arrangements from a licensed electricity supplier that will satisfy these requirements of Ofgem.”
Why do all of this? The GLA’s ambition is to purchase decentralised energy systems exported low carbon electricity (mostly from CHP plants in London) and then sell this output to a single consumer – London Underground (one of the biggest electricity users in the UK) – passing more of the value of this purchased electricity back to the generator than is currently the case (estimated at between 10-20 per cent more according the Mayor’s energy advisor), helping improve the business case for more low carbon generation plant in London.
Further background to GLA’s work in this area can be found here.
March 2014: News that a £5m contract has been awarded “by the London Borough of Tower Hamlets for the refurbishment of Stebon Primary School. The school will be the first Passivhaus School in London and only the sixth in the UK to be delivered under the highly sustainable Passivhaus standards, which are more traditionally used in house building.”
A submission to Tower Hamlets council as part of the planning application sets out some detail of how the refurb will seek to achieve a passivhaus standard:
- The sustainability and energy strategy have informed the building design. Passive design strategies have been adopted and include good orientation, compact building form, low U values, high air tightness, thermal mass, maximizing natural daylight internally, and solar control to southerly facades.
- Passivhaus utilises passive solar gain and night time purge ventilation in summer, coupled with heat recovery and rigorous thermal and airtightness requirements to greatly reduce energy consumption.
The report goes on to say to “achieve Passivhaus certification requires:
- Considered form and orientation – typically compact and east-west orientation making Stebon a good contender
- High levels of insulation
- Elimination of thermal bridges
- Air tightness
- Mechanical ventilation with heat recovery (MVHR)
- Winter solar gains
- Summer natural ventilation with night-time cooling”
An energy statement for the development provides further detail.
March 2014: This year’s Green Sky Thinking programme has been announced and, as with previous years, has a selection of really excellent events focussed on sustainability and the built environment. Lots of fascinating subjects covered – below are links to some of the energy-related talks – check the programme linked below for the full week’s activities. All events take place between 28 April – 2 May.
And a few others – details of which are on the programme, but dates to be confirmed. These include:
The Value of Energy Efficiency in Commercial Buildings
How will we Heat London?
5 March 2014: London Assembly press release calling “on Mayor Boris Johnson to press Whitehall to reverse cuts to programmes designed to reduce energy consumption in the capital. A motion agreed at a today’s Assembly meeting urges the Mayor to lobby the government to rethink reductions to the Energy Company Obligation (ECO) and a two year extension to the time limit for energy companies to fulfil the requirements. The Mayor should also lobby ministers to set out a national infrastructure project that will help to cut fuel bills for 1.2 million London homes by 2015.” Read the news release here.
Also today, the government released their consultation on the revised changes to ECO.
March 2014: Some welcome news that E.ON are refurbishing the engines of their Smithfield-based Citigen Combined Heat and Power (CHP) district heating systems. The following Edina press release sets out 4 new major gas-fired CHP engines will be installed this year and commissioned by the beginning of 2015. Edina helpfully provide some background to the scheme:
A City of London case study on the network is available here.
March 2014: The Guardian features results from a new academic study looking at world heritage sites that could be threatened by climate change, reporting that the “Tower of London …will be lost to rising seas”. Elsewhere, the Evening Standard reported predictions from former weather caster Michael Fish stating that “Hot weather days in London could increase sevenfold because of climate change“. Sounds like wellies and ice creams all round…
March 2014: CIBSE article on CHP and district heating in London “With the Government and planners keen for developers to look at district heating for communal heating schemes, the technology is on the up and up. But size matters with heat networks are are some schemes too small to reap the benefits?” Good article – raising some real concerns over what technical and financial concerns should be considered when pushing district heating – with contributions from the GLA and Islington Council: read the full article here.
March 2014: The London Assembly Environment Committee held the first of two oral evidence sessions on progress made by the GLA’s energy and climate programmes. The first of these sessions was held on 6 February and focussed on the Mayor’s home energy efficiency programme, RE:NEW. Evidence was provided by representatives from a number of organisations, including EDF Energy, the Energy Saving Trust, Hillingdon Borough Council and the Mayor’s Housing Advisor. The full transcript can be accessed here – and a webcast can also be viewed here. Points of interest raised during the debate included:
- The RE:NEW programme is awaiting confirmation they they have been successful in their application to the European Investment Bank’s European Local Energy Assistance (ELENA) programme for £2.6m to put in place a support team over a three year period starting from April 2014 (the RE:NEW programme support team is currently operated for the GLA by Capita).
- RE:NEW is currently working with Greenwich, Havering, Newham and Westminster, Hyde Housing and Peabody Gallions developing “bigger projects that would be more attractive in terms of bringing in Energy Company Obligation (ECO) funding“.
- Borough responses suggested that RE:NEW was “not very hands-on with project development.” RE:NEW is keen to find out what boroughs are doing but “there is very little support there for boroughs in terms of developing projects and overcoming planning issues.“
- RE:NEW should be instead be focussing on what the GLA could do to “enhance [borough activities] even further if it wants to deliver ambitious carbon reduction targets“
- Further criticism was targeted at the RE:NEW programme stating that the funding resource was mainly going to Capita : “We see that the resources are actually on those people, basically, for the Capita resource. Local authorities are not really getting the benefit of that on the whole“.
- An often confusing debate takes place on how many homes were retrofitted through the RE:NEW programme and how many homes were insulated across London in total. A number of 400,000 homes is quoted by the Mayor’s Housing Advisor during the session. Though not explained, this number is most likely made up of the following: 327,00 treated through the Government’s CERT programme over the period April 2008 – December 2012 (see cell V35 of EST CERT data here), and 70,000 homes visited by the RE:NEW team and provided with ‘easy measures’ over the period July 2011-December 2012 (see MQ here for details). For more on this, see earlier post here.
- RE:NEW Phase 3 has a target of retrofitting 175,000 homes.
Just ahead of the evidence session – somewhat belatedly – the Mayor published the full evaluation report of the main RE:NEW roll-out phase which ran from July 2011-May 2012 (a summary report had previously been issued – details here). A second oral evidence session will take place on 26 March, focusing on the Mayor’s decentralised energy programmes, with the Mayor’s energy advisor, Matthew Pencharz, in attendance.
March 2014: A paper presented at February’s GLA’s Investment & Performance Board sets out the Environment Team’s priorities for this year (2014/12). Amongst the range of initiatives being taken forward are a number targeted on energy:
- Spatial energy masterplan – to identify where and what type of energy infrastructure is required to close the energy gap and provide London with a resilient and competitive energy system.
- Decentralise energy for London – the DEfLon programme will focus on creating a pipeline of decentralised energy projects and overcoming market barriers to give access to the retail electricity market
- Biodiesel from used cooking oil – to help decarbonise London’s bus fleet by using biodiesel from used cooking oil (UCO) or other waste products.
- Mayor’s Business Energy Challenge – advice and awards programme to support businesses saving money through improving energy efficiency.
The issue of a new ‘spatial energy masterplan’ for London is particularly interesting, and something discussed at in an earlier investment board meeting as part of the GLA’s work on developing the capital’s first Long Term Infrastructure Investment Plan.
The newly name DEfLon programme is likely to be a successor to the existing DEPDU support team which itself followed on from DEMaP, highlighting the importance of bringing forward decentralised energy projects in the capital.
A second paper presented to the Board provides detail on funding commitments for the Environment team. Amongst these is mention of £10k to continue updating the London Heat Map which also – interestingly – mentions that “The Heat Map has enabled £133m investment in on-site heat networks alone in 2012-13“.
The biodiesel report will most likely build on the findings of a study commissioned by the GLA in 2013 ‘The market for biodiesel production from used cooking oils and fats, oils and greases in London‘.
February 2014: A new report produced by the UK Green Building Council’s (UKGBC) Zero Carbon Non Domestic Task Group examines the case for action supporting zero carbon non domestic buildings by 2019. The report includes the following information on energy consumption in London office buildings.
“Figure 3 demonstrates the impact of building regulations in a portfolio of London office buildings constructed since 1998. In particular the 50% decrease in ‘landlord and shared services’ energy is consistent; landlord and shared service energy is, in the majority, regulated energy which is covered by the building regulations. The variation in occupier direct energy use reflects the variation in densities, small power and hours of operation.”
The report can be downloaded here.
March 2014: As part of work Which? are helpfully taking forward on consumer protection rights issues for people connected to district heat networks, Which? held an online discussion on consumer attitudes to district heating. Though the thread started some time ago in 2013, contributions from unhappy customers signed to a number of new networks in London are still raising their issues as of only a few days ago. Schemes in Dalston, the Olympic Village, and an unnamed SE London scheme are referenced (some of which are copied below). It should be said that one commenter does also mention “The Pimlico district heating scheme has been running for many years without any consumer issues.”
“Hi. I have just recently moved into a 2 bed new build in Dalston, East London a year ago. I have now received my first E-On bill for our heating and it comes in at a whopping £579 / 3600kWh (and this is just for 10 months). Whilst I normally welcome any energy saving initiative, I am left ultimately baffled why…”
“I have been living in a building in SE London with such a scheme for nearly two years now. Our heat bill is never below £45 per month, even in summer when it’s only used for showers for 2 people. In the summer months half of our monthly heating bill is made up of the service charge!”
“I live in an apartment block in London which operates such a scheme. Whilst this is my main residence I only occupy the apartment four nights per week. My average bill is circa £36 per month. Only £5 of this is the actual usage, the remainder being standing charge and VAT.”
“Me and my partner moved into a 1-bed apartment in the Olympic Village, London at the end of November and we have just challenged the DH supplier (East London Energy) about the costs. Many residents were shocked, as we were, to receive high bills. We were only told at the last minute that the DH scheme would be how our heating/hot water would be supplied, and while I’m all up for it in principle, I feel that the companies supplying it are ripping us off. We’re paying about £40 per month and we’ve had the heating set at 10 degrees a lot of the time.”
“My prices via EON in SE London:
standing charge: 85.871p/day (31 days=£26.61)
VAT @ 5%
My spend with EON (district heating only, electricity is on top of that through a different supplier) in 2012/13: £814.84 for a 2 bed flat.”
“Here at Olympic Village we are trying to get through to the Olympic Development Authority and East London Energy who have set their costs too high to be sustainable for the consumer. At the moment, still waiting for something meaningful from them to show they’re taking our concerns seriously enough.”
Which? are now following up their 2013 work – see ‘District heat users – are you happy with your service?‘