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Tag Archives: Decentralised Energy
November 2014: A major decentralised energy project in Victoria has moved a step further with the appointment of Clarke Energy to deliver a 3MWe Combined Heat and Power (CHP) engine. A news release from Clarke Energy sets out that the mixed use Nova Victoria project, comprising residential, offices and commercial sites, will be connected to a district heating scheme where:
- GE’s Jenbacher units will run a combined heat and power (CHP) configuration to generate 2.96 megawatts (MW) for the area enough electricity to power more than 5,700 standard U.K. homes.
- Once operational in 2016, the CHP configuration will power the on-site Energy Centre, export electricity to the grid and provide heat to Nova residents and businesses as well as reduce carbon emissions.
- Based on 8,000 operating hours per year, the gas CHP is expected to offset more than 6,500 tons of carbon dioxide.
The Mayor’s planning decision from 2012 provides some additional background to the energy strategy of the development. Energy strategies submitted as part of the planning application for the development can be downloaded here and here.
June 2014: This month the Mayor has been asked questions in relation to:
Energy efficiency in the private rented sector; carbon offsets used by new developments;
How much energy is produced in London by decentralised energy systems;
heat recovery from London’s buildings; meetings with London community energy groups; total spend by the Mayor on domestic energy efficiency programmes;
Mayoral action following the publication of the government’s Community Energy Strategy; energy companies supporting the Mayor’s License Lite application;
progress against the Mayor’s decentralised energy target; the government’s new Urban Energy Fund; money spent by the London Energy Efficiency Fund (LEEF);
hospitals using the Mayor’s RE:FIT programme; visits to the Kingston heat pump development; visits to the London Array Wind Farm; Ofgem approval of the Mayor’s License Lite application; local authorities using RE:FIT; the Mayor’s first license lite supply deal; feedback from the C40 Johannesburg summit; consumer redress to high heat charges on district heating networks;
ESCO deals signed under the Mayor’s RE:FIT programme; Mayoral support for the Green Deal in London’; Green Deal Communities Fund; costs associated with applying to DECC’s Green Deal Communities Fund; green jobs created by Mayoral programmes;
low carbon sector jobs created; attracting green investment into London; the Mayor’s High Level Electricity Working Group;
Previous months questions to the Mayor can be found here.
June 2014: Progress continues by the Mayor to obtain a junior electricity supply license – otherwise known as ‘license lite’. A tender was issued in March to start the process of attracting support from a fully licensed electricity supplier to help with the Mayor’s application to Ofgem (details here) and further information was issued by the Mayor in a recent press release ‘Mayor to become London’s smallest electricity supplier‘ which stated that “The ground-breaking move will permit him to offer the capital’s small electricity producers up to 30 per cent more for their excess energy than existing suppliers do, which he will then sell on to TfL, the Met and others at cost price.” The Mayor’s announcement attracted significant media interest including this piece in the Guardian,
A very good paper presented at the GLA’s Investment & Performance Board last week provides some further detail on issues that need to be considered as the ‘License Lite’ process progresses. The paper highlights that:
- A principal risk remains timing because the type of licence application is new to all parties and therefore timing remains difficult to predict.
- There is strong government support for the Mayor’s Licence Lite project. In May 2014 Matthew Pencharz and a GLA officer attended a round table discussion on licence lite chaired by the Secretary of State for Energy and Climate Change, Ed Davey to discuss progress of licence lite.
- A detailed draft economic model has been prepared in consultation with Transport for London, with whom discussions are in train for the purchase by it of electricity supplied from decentralised energy systems by the GLA under its licence.
- The financial outcome of the model is positive, but cannot be confirmed until tenders for the provision of the market services have been received from tenderers who have responded to the preliminary questionnaire during August of this year.
- Selected London boroughs have been briefed and provisionally identified the electricity capacity best sold under licence lite, together with other suitable public sector electricity generating capacity in London.
- The objective is for submission for a Mayoral Decision to approve the grant of the licence to the GLA by Ofgem and to approve entering into the necessary contracts to enable the project to proceed to completion in October 2014. Subject to that, the licence may be granted to the GLA in November 2014, operations commencing in April 2015.
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: 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?
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: 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‘.
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?‘
January 27 2014: The Government’s new Community Energy Strategy is being launched today and press reports have highlighted that it will include a new £10m Urban Community Energy Fund (UCEF). This mirrors the existing Rural Community Energy Fund, and is clearly welcome news for London-based community-led energy projects.
This fund will be open to non-rural communities and will provide up to approximately £150,000 of funding for feasibility and pre-planning development work to help projects become investment ready. The funding will be available in two stages:
- Stage one will be a grant of up to approximately £20,000 for feasibility of renewable energy projects.
- Stage two will be a loan of up to approximately £130,000 to support pre-planning development work, planning applications and to develop robust business cases to attract further development.
No details as yet to when the Fund will be launched or how long it will operate for. Hopefully this will all become apparent later today…
January 2014: The Mayor has recently posted online his response to the Department of Communities and Local Government (CLG) Allowable Solutions (AS) consultation, released last year. Allowable Solutions are central to the achievement of the Government’s commitment to delivering zero carbon homes by 2016, and have been under discussion for several years now, with significant delays in any Ministerial decisions being made (too much to go into here – see articles here and here) . The Zero Carbon Hub have also led on much of the detailed development behind the potential measures that could be used.
The Mayor raises a number of concerns to Government over their proposals, including:
- London is less likely to benefit from them than other parts of the country, because London’s building stock and the complex logistics of working in London make it more expensive to install both retrofit and energy supply measures.
- The current proposals are likely to mean that AS in London are uncompetitive. In combination with proposals under the Housing Standards Review, there is significant risk that the well established plans in London to support the deployment of decentralised energy and heat networks through the planning system will be undermined.
- It is unlikely that district heating will be funded under AS without revisions to the proposals.The development of decentralised heat and power generation and district heating forms an integral part of London’s and other cities’ contribution to the delivery of Government’s heat strategy. It appears to be an ambition for AS that they should support district heating and it might often make sense for a developer to contribute to a district heating network if his/her future developments could in turn receive low carbon affordable heat from that network. However, except perhaps if the central fund route were the sole option, it is difficult to see how the proposed options would support district heating.
London boroughs are already making significant headway in establishing their own allowable solution mechanisms as a consequence of the Government’s delay in setting out their own policy – see details of Islington’s Carbon Offset Fund here.
See article in Building magazine also detailing the Mayor’s response.
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.“