Wealth Creation and Managing Climate Change:The London Approach

Andy DeaconGLA Environment Team

Latest IPCC Findings

Stern review and Economics• Tackling climate change is a

“pro-growth strategy”• Showed that the costs of

action to reduce emissions now will be 1% per year or less, whereas the damage costs of business as usual are likely to be in the order of 5 to 20 % of global GDP.

• London’s financial services sector bears the brunt of impacts wherever they occur in the world.

• 2005 saw weather-related catastrophe losses total almost $80 Billion worldwide, and over 99% of all catastrophic losses were due to weather–related events.

Carbon Markets

IFSL/UKTI 2007

European 2003 summer temperatures:

normal by 2040s, cool by 2060sobservationsHadCM3 Medium-High (SRES A2)

2003

2040s

2060s

Tem

per

atu

re a

no

mal

y (w

rt 1

961-

90)

°C

Hot in the city

• 600 people died in the August 2003 heatwave

• London had highest numbers of deaths for any UK region

• London’s heat island means inner London can be up to 9°C warmer than the greenbelt

• Further development may intensity the heat island effect

How is London vulnerable to CC ?

Sources:1 Statistical authorities, various websites 3 Munich Re, Topics 2002 2 Munich Re, 2004 a GLA DMAG estimates

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1 Tokyo Japan 40 7102 San Fransisco Bay USA <5 1673 Los Angeles USA <10 1004 Osaka, Kobe, Kyoto Japan 20 925 Miami USA <5 456 New York USA <10 427 Hong Kong China 10 418 Manila, Quezon Philippines 30 31

9 London UK 15a 30a

10 Paris France 30 25

Natural Hazards (3)

Rank City Country

City GDP as % of

country's GDP (1)

Risk index (2)

Current CO2 emissions from London

44 mt CO2

Industrial7%

Ground BasedTransport

22%

Domestic

38%

Commercial and public sector

33%

Emissions Map – Total CO2 (2003)

Energy Strategy Objectives• Reduce London’s contribution to

climate change, by minimising emissions of carbon dioxide from all sectors (commercial, domestic, industrial and transport) through energy efficiency, combined heat and power, renewable energy and hydrogen;

• Help to eradicate fuel poverty, by giving Londoners, particularly the most vulnerable groups, access to affordable warmth;

• Contribute to London’s economy, by increasing job opportunities and innovation in delivering sustainable energy, and improving London’s housing and other building stock.

Mayor’s Climate Change Action Plan• Four new programmes

– Green Homes– Green Companies– Green Transport– Green Energy Supply

• Plus action on GLA own activities and on new build

• An action-based, funded programme to tackle climate change

10

20

30

40

50

2000 2010 2020 2030 2040 20501990

Car

bo

n D

ioxi

de

Em

issi

on

s (M

tCO

2)

Profile of national targets and aspirations (against 1990)

Today

45.1m 44.3m

15%20%

25%

30%

60%(vs 2000)

Required CO2 reductions

Target for London = 60%

10 year target (2016)

= 20%

Proposed London reductions to achieve 450ppm stabilisation

600 million tonnes CO2

to 2025

Energy Hierarchy

1. Use Less (Be Lean)

2. Supply Energy Efficiently (Be Clean)

3. Use Renewable Energy (Be Green)

Tonnes CO2

Building Regulations 2006

CHP

Lean

20% Renewable target in tCO2

Energy efficiency Measures

Clean Green

CCHP

Final CO2 emissions

tCO2

tCO2

tCO2

tCO2

savings

savings

savings

Tonnes CO2

Building Regulations 2006

CHP

Lean

20% Renewable target in tCO2

Energy efficiency Measures

Clean Green

CCHP

Final CO2 emissions

tCO2

tCO2

tCO2

tCO2

savings

savings

savings

Prioritising decentralised energy generation and

renewables• Design to minimise CO2

emissions from the outset • Maximise passive design and

integration with CCHP/CHP• All major new developments

should establish or connect to a local combined cooling, heat and power network

• Minimise need for active cooling systems

• Incentivise new technologies, as an alternative to fossil fuels

• Further Alterations proposals - developments to achieve a reduction in CO2 emissions of 20% from onsite renewable energy generation

Further Alterations to the London Plan

Proposed new policy:• Boroughs should ensure that all LDFs identify and safeguard existing

heat and cooling networks and maximise the opportunities for providing new networks that are supplied by decentralised energy. Boroughs should ensure that all new development is designed to connect to the heating and cooling network. The Mayor will and boroughs should work in partnership to identify network opportunities, to ensure the delivery of these networks and to maximise the potential for existing developments to connect to them.

Supporting text:• This area wide approach should provide more market certainty for

Energy Services Companies (ESCo) as it should remove some of the risk of developments not being designed to connect to decentralised energy. The scale of opportunity for delivery may also increase competition between ESCos and encourage the creation of small and medium size ESCos to deal with the different scales of development.

Main Panel Recommendations on Climate Change

• Overwhelming support for Mayor’s approach

• New policy on Living roofs and walls • New policy on provision of heating and

cooling networks• Clarification on SPG on Renewable energy

and investigation of strategic fund• Review of SPG on Sustainable design and

construction and standards in relation to Code for Sustainable Homes

Panel recommendations (2)

• Adaptation policy – add minimising water use and green infrastructure

• Reference to role of soft landscaping in front gardens

• Standard for water usage in homes reduced to 105 litres/person/day for consistency with level 3 of Code

Overall Savings – Existing London Plan

CO2 emissions in tonnes/year from 113 developments with energy statements

Overall CO2 savings in tonnes/year from energy efficiency (EE), CHP/CCHP

and Renewable Energy measures (113 developments)

Cumulative CO2 savings over time

(113 developments)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

09/01/2003

09/03/2003

09/05/2003

09/07/2003

09/09/2003

09/11/2003

09/01/2004

09/03/2004

09/05/2004

09/07/2004

09/09/2004

09/11/2004

09/01/2005

09/03/2005

09/05/2005

09/07/2005

09/09/2005

09/11/2005

09/01/2006

09/03/2006

09/05/2006

09/07/2006

tonn

es C

O2/y

r

Total Savings

CHP

Energyefficiency andpassivedesign

Renewableenergy

Implementation of the London Plan

Release of the London Renewables Toolkit

Additional staff join GLA planning team

Supporting publicationsSustainable Design and Construction SPG: Published May 2006 and includes guidance how to approach community heating, CHP and CCHP in planning applications.

London Renewables Toolkit: Published in September 2005 to provide technical support to GLA planners, London borough planners and applicants on incorporating renewable energy technologies in line with the Mayor’s London Plan policies. http://www.london.gov.uk/mayor/

environment/energy/docs/renewables_toolkit.pdf

UK Power Flow Pattern 2006/7

• broad estimate is that only 40% of the heat generated in the combustion process in grid power stations is used in the generation of electricity

• Losses in power through transmissions and distribution amount to approximately 9% of demand

Decentralised energy generation

• Powering London into the 21st Century Report1:• High Decentralised Energy Scenario from 2005 to 2025:

– 33% Reduction in CO2 Emissions.– 35.5% of London’s Energy Demand.– 15% Reduction in Natural Gas Consumption.– Fuel Flexibility (inc. Renewables).– Local Security of Supply.

1. Greenpeace Powering London into the 21st Century – March 2006

Sources of savings from energy supply

Energy from biomass & waste

Combined Cooling Heat & Power

Micro-renewables

Changes in National Grid mix

47%

31%

7%

15%

Barriers to Increased Decentralised Energy

• There are serious market barriers which prevent decentralised energy from expanding to meet the climate change targets required of it.

• These are all matters that involve the interface between decentralised energy and the market for large scale, centrally generated electricity production:

i) For all but the small schemes (which currently have licence exempt status), the costs and burdens associated with licensable status in respect of electricity supply and distribution;ii) The cost of standby and top – up (imported) electricity to decentralised generators and the price offered by licensed suppliers for exported power;iii) The arrangements with licensed electricity suppliers for the transport of licence exempt electricity between decentralised energy sites;

• There is an urgent need for reform of the electricity regulatory and licensing system, so that medium size and larger decentralised energy schemes do not have to participate in a market structure which is not designed for them, but at the same time fully protecting consumers.

Investing in London’s Future

• Carbon scenarios to 2026• Different technology scenarios costed

• Hybrid scenario - £8.5 billion required over 20 years

• Investing in the low carbon future• Delivery mechanisms discussed with

investment community

• Substantial investment appetite identified

• Onward work looking at buying co-operative, rental scheme, project facilitation service & green fund.

C40 Cities Initiative on Commercial and Public

Sector Buildings• New end to end service

with three elements:– Energy audit– Carbon reduction

measures– Loan for upfront outlay

• Work with 5 of the world’s major banks and 4 Energy Services Companies

• $5 billion raised so far

What’s on the Horizon?• Carbon Reduction Commitment

- Proposal to save emissions totalling 1.2 MtC/year by 2020 from large non energy intensive business and public sector organisations

• Other consultations arising from Energy White Paper – ongoing Decentralised energy work by OFGEM and others

• Carbon performance standards – – Building Regulations tightening– Code for Sustainable Buildings– Energy Performance of

Buildings Directive• Local authority performance

indicators