Made in London: A sustainable energy strategy for the capital

London Essays – Issue 3: Green

Made in London: A sustainable energy strategy for the capital

The Mayor’s environment advisor argues that we need to think beyond the grid when it comes to greening our energy. We particularly need to find new ways of heating our water and our spaces. Could the Tube do it for us?

By Matthew Pencharz

Urban areas are growing at an astonishing rate: London’s pop­ulation has increased by around one million since Boris Johnson was first elected seven-and-a-half years ago. If the ambitions to meet decarbonisation targets are to be realised, it is in cities that much of the action needs to be taken to stay within a 2°C increase in global temperatures and avoid dangerous climate change.

Fortunately, cities – including London – have been showing leadership in addressing climate change where, arguably, some nation states have fallen short. Since the Mayor was elected in 2008, carbon emissions in London are down 14%, or 20% per capita: quite an achievement given our population growth and with a 20% expansion of the economy over that time.

Progress is being made, but we must accelerate our actions and ensure that we capture the attendant benefits from addressing climate change, such as improved health and social outcomes, while still growing our economies. We need to answer the energy trilemma: how can we provide energy that is secure, affordable and sustainable?

It’s worth starting by looking at where our emissions actually come from. In London just over a fifth of emissions are accounted for by transport – mainly petrol and diesel, with some electricity for the tubes and trains plus the small but growing electric vehicle fleet. Another 30% or so is accounted for by electricity, powering our TVs and microwaves, our office lifts and data centres. That leaves the remainder – almost half – accounted for by natural gas, heating our spaces and water. This may come as a surprise. In the debates on climate change and UK emissions reduction, we hear very little indeed about how we should decarbonise the systems that heat space and water.

The more radical among the environmental community appear to believe that focusing attention on renewable electricity generation – especially solar and wind – almost to the exclusion of everything else will magically decarbonise our energy supply. Of course, decarbonising the electricity grid is vital, especially as we seek to electrify our transport – and, in the past year, we have seen the carbon intensity of the electricity grid reduce by 6.5%. But focusing solely on electricity won’t address emissions from natural gas and, since gas accounts for by far the highest proportion of our domestic bills, it won’t have the dramatic effect on fuel poverty we all want to see.

With the Government having no robust policies on heating, the Mayor and his team have been focused on working to decarbonise our supply in a manner that maintains the competitiveness of the market. We believe that more local energy generation within London, using district heating networks, can address the trilemma. By bringing more energy production into London we can ease pressure on upstream generators and make the supply more secure. We can reduce the carbon intensity of the heat and power, making it more sustainable, and provide cheaper energy to residents. The Mayor has therefore set a target that 25% of the capital’s buildings’ energy demand should be met from local sources by 2025, with an expectation of a far greater penetration by mid-century.

District heating has been common in Nordic countries for generations. Instead of each individual property having its own boiler, a network of pipes carries hot water from energy centres to a number of buildings, both commercial and domestic. Of course, installing the pipes is expensive and disruptive, so, to be competitive, one needs a large demand for heat, entailing a mixture of land uses in a relatively small area. As the most densely developed part of the UK (or, indeed, Europe), London is the perfect place to deliver district heating.

However, London is a complicated place for district-wide schemes. These may cross borough boundaries, all 32 of which (33 including the City of London) are their own planning authority below the GLA. This requires de-risking investment, overcoming scepticism and taking a strategic view of the city’s long-term energy supply.

Through the London Plan, the Mayor’s strategic planning document, we are ensuring that new developments are as energy-efficient as they can be and could also connect to a district heating system in the future. In order to meet the London Plan’s stringent carbon emissions targets, this often means requiring an energy centre on site, providing heat and power at a lower economic and environmental cost to residents and tenants.

In City Hall the Mayor has a team drawing up district-wide energy masterplans, working with developers and boroughs to help large-scale projects to market. We are working to ensure London’s combined heat and power generators, which produce both electricity and heat, get the market rate for their power. Ofgem is about to award City Hall a junior electricity supply licence, through which we will effectively act as a broker between these generators and Transport for London, which uses more power than all of Leeds. This will result in a 20–30% better rate for the power generators than they currently receive from the wholesale market, making investment in further energy centres far more attractive: this will help set the rules of the market to answer the trilemma.

In the past few years we have seen a number of London firsts. The South East London Combined Heat and Power (SELCHP) facility generates energy from waste at a plant in Bermondsey. The plant was built over 20 years ago but only started producing combined heat and power two years ago, when it was connected to a district heating network, and now provides cheap, sustainable heat to some social housing blocks. We are now seeing new developments in the regeneration areas around SELCHP wanting to connect to its network. If all four major waste facilities in and just outside London had their currently wasted heat utilised in this way, we could see 260,000 homes in London heated from renewable sources.

Could the tube heat us?

We must, though, look further ahead – to mid-century and beyond, when the circular economy will have minimised waste to a point that there is little left to burn and the drive to decarbonise our energy system should mean we will no longer be using natural gas. What then will be the primary source of our heat? A GLA report from a few years ago suggested that up to 38% of London’s heat demand could be met from waste and environmental heat sources, for example from sewage treatment works, electrical substations, other industrial processes, the river and the Tube.

The last of these is a particularly attractive option. All the energy that goes into running the Tube eventually becomes heat from train braking – and then there are all those people using the network, each of them a little, or not so little, radiator. The Tube also runs through some of the densest development in London and under some exciting regeneration schemes, which could certainly be connected to district heating networks.

City Hall is working with Islington Council on a world first, connecting the pre-existing Bunhill heat network in Clerkenwell to a nearby Northern line vent-shaft close to City Road. This will provide low carbon, renewable, cheaper heat to at least a further 500 residents initially.

We believe that this project will prove the concept of turning currently wasted heat from the Tube into a resource and a revenue stream. The income can be used to help keep fares lower while maintaining investment. It is one answer to the energy trilemma. Already, we are seeing boroughs and developers opening conversations with the Tube and City Hall about similar schemes for new developments close to other deep-level Underground lines. And indeed, there are similar conversations going on with the operators of electricity distribution infrastructure – substations and transformers give off huge amounts of heat – about using their heat for new developments.

We are at the beginning of an exciting transition to a decentralised low-carbon energy system, providing secure, affordable and sustainable heat and power. If we are to meet the carbon emissions targets we have set ourselves, we have a great deal to do. But if the rules of the market are set right, with appropriate incentives and nudges, we can deliver energy without subsidy, at a competitive price. This does, though, mean looking at how we are currently meeting all of our energy requirements, and not just in regard to power. Heat is our greatest energy demand and so calls for more of our attention.