Zero Emissions City - City of London · City of London, Zero Emissions City Prepared for: City of London, Department of the Built Environment AECOM Quality information

Zero Emissions City City of London City of London, Department of the Built Environment July 2018

City of London, Zero Emissions City

Prepared for: City of London, Department of the Built Environment

AECOM

Quality information Prepared by Checked by Approved by

HR Sustainability Consultant

MT Regional Director

VF Associate Director

Revision History Revision Revision date Details Authorized Position

1 04/05/2018 Draft MT Regional Director

2 01/06/2018 Final VF Associate Director

3 13/07/2018 Additional revisions VF Associate Director



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Prepared for: City of London, Department of the Built Environment AECOM Limited Aldgate Tower 2 Leman Street London E1 8FA aecom.com

© 2018 AECOM Limited. All Rights Reserved.

This document has been prepared by AECOM Limited (“AECOM”) for sole use of our client (the “Client”) in accordance with generally accepted consultancy principles, the budget for fees and the terms of reference agreed between AECOM and the Client. Any information provided by third parties and referred to herein has not been checked or verified by AECOM, unless otherwise expressly stated in the document. No third party may rely upon this document without the prior and express written agreement of AECOM.



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Table of Contents 1. Executive Summary ..................................................................................................................................... 6 2. Introduction .................................................................................................................................................. 9

2.1 Purpose of the Study ........................................................................................................................ 9 2.2 Overview of the City of London ......................................................................................................... 9 2.3 Scope of this report........................................................................................................................... 9

3. Background, Policy and Regulatory Context .............................................................................................. 11 3.1 Drivers for a Zero Emissions City ................................................................................................... 11 3.2 Summary of policies and legislation ............................................................................................... 12

4. Establishing a baseline .............................................................................................................................. 13 4.1 Fuel consumption ........................................................................................................................... 13 4.2 Carbon emissions ........................................................................................................................... 16 4.3 Renewable, Low and Zero Carbon (LZC) energy generation capacity ........................................... 20 4.4 Summary ........................................................................................................................................ 21

5. Modelling the pathway to zero carbon ....................................................................................................... 22 5.1 Modelling approach ........................................................................................................................ 22 5.2 Estimated end uses of energy and CO2 .......................................................................................... 24

6. Future projections: The ‘No Change’ baseline ........................................................................................... 26 6.1 Anticipated changes ....................................................................................................................... 26 6.2 Energy demand and CO2 emissions ............................................................................................... 28

7. CO2 reduction trends ................................................................................................................................. 30 7.1 Refurbishment of existing building stock......................................................................................... 30 7.2 Uptake of electric and renewable fuel vehicles ............................................................................... 30 7.3 Decarbonisation of the electricity grid ............................................................................................. 32 7.4 Decarbonisation of the gas grid ...................................................................................................... 33 7.5 Smart energy management ............................................................................................................ 34 7.6 Battery storage ............................................................................................................................... 34 7.7 Changing energy efficiency and CO2 emission standards in buildings ........................................... 34 7.8 CO2 reductions: City of London and stakeholder opportunities ...................................................... 35 7.9 Summary ........................................................................................................................................ 40

8. Looking ahead to 2050: The pathway to zero carbon ................................................................................ 41 8.1 Scenarios modelled ........................................................................................................................ 41 8.2 Results and discussion ................................................................................................................... 41 8.3 Summary ........................................................................................................................................ 46 8.4 Note: The impacts of climate change on energy demands ............................................................. 47

9. Conclusions and recommendations ........................................................................................................... 49 9.1 Conclusions .................................................................................................................................... 49 9.2 Recommendations .......................................................................................................................... 52

10. Action Plan ................................................................................................................................................. 57 10.1 Action Plan ..................................................................................................................................... 57 10.2 Milestones ...................................................................................................................................... 63

Appendix A Stakeholder Workshop ....................................................................................................................... 64 Appendix B Policy & Legislation ............................................................................................................................ 68

International policies and legislation .......................................................................................................... 68 National policies and legislation ................................................................................................................. 68 Greater London Authority (GLA) policies and legislation ............................................................................ 71 City of London (CoL) local planning policy and guidance .......................................................................... 72 LZC energy: Financial incentive schemes ................................................................................................. 73

Appendix C Comparison against 2009 CO2 emissions report ............................................................................... 75 Appendix D Modelling methodology ...................................................................................................................... 76

Key assumptions about the built environment ........................................................................................... 76



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Energy demands ........................................................................................................................................ 76 Impact of refurbishment ............................................................................................................................. 76 Transport .................................................................................................................................................... 77 Uptake of EVs (and renewable fuel vehicles) ............................................................................................ 78 Low and zero carbon technologies ............................................................................................................ 78 LZC impact on total CO2 emissions ........................................................................................................... 79

Appendix E CO2 savings from Citigen ................................................................................................................... 80

Figures Figure 1. Fuel consumption in Inner London (2015 data) ...................................................................................... 13 Figure 2. Fuel consumption by fuel type in 2015 (%) ............................................................................................ 14 Figure 3. Fuel consumption by sector and fuel type in 2015 (GWh)...................................................................... 14 Figure 4. Fuel consumption by road vehicle type in 2015 (%) ............................................................................... 15 Figure 5. Number of vehicles by type in 2016 from screen-line counts (%) Source: CoL Corporation .................. 15 Figure 6. CO2 emissions by sector in 2015 (%) ..................................................................................................... 17 Figure 7. CO2 emissions by sector and fuel type in 2015 (ktCO2) ......................................................................... 17 Figure 8. Estimated breakdown of road transport CO2 emissions (LAEI 2013) ..................................................... 18 Figure 9. Historic CO2 emissions, 2005-2015 (ktCO2)........................................................................................... 18 Figure 10. Non-domestic buildings fuel consumption ............................................................................................ 19 Figure 11. Fuel consumption in the road transport sector 2005-2015 (GWh) ........................................................ 19 Figure 12. Estimated split of fuel consumption by end use (% of total GWh) ........................................................ 24 Figure 13. Estimated breakdown of gas and electricity consumption in the existing building stock (%) ................ 24 Figure 14. Estimated split of CO2 emissions by end use for existing building stock (% of total CO2 emissions) ... 25 Figure 15. Projected new development within the City of London by 2050 ........................................................... 26 Figure 16. BAU scenario: City of London projected annual CO2 emissions 2015-2050 ........................................ 28 Figure 17. Registration of electric vehicles in the UK. Source: SMMT .................................................................. 31 Figure 18. City of London CO2 emissions from road transport 2015-2050 ............................................................ 32 Figure 19. Potential City of London CO2 emissions based on alternative electricity grid decarbonisation rates (assuming no other CO2 reduction measures) ...................................................................................................... 33 Figure 20. ‘Realistic’ pathway to 2050, no electricity grid decarbonisation ............................................................ 42 Figure 21. ‘Realistic’ pathway to 2050, including electricity grid decarbonisation at 2.5% per year ...................... 43 Figure 22. ‘Accelerated’ pathway to 2050, no electricity grid decarbonisation ...................................................... 44 Figure 23. ‘Accelerated’ pathway to 2050, including electricity grid decarbonisation ............................................ 45 Figure 24. Range of potential CO2 trajectories based on the scenarios modelled ................................................ 46 Figure 25. Annual City of London CO2 emissions with refurbishment of the existing stock, comparing 2015 and 2050 'High' climate scenarios (ktCO2 per year) ..................................................................................................... 47 Figure 26. Comparison of carbon emissions estimates, 2009 study versus current methodology ........................ 75

Tables Table 1. City of London fuel consumption by sector and fuel type in 2015 (GWh) ................................................ 13 Table 2. Fuel consumption by road vehicle type in 2015 (GWh) ........................................................................... 15 Table 3. City of London carbon emissions in 2015 (ktCO2) ................................................................................... 16 Table 4. LZC installations within the City of London. ............................................................................................. 20 Table 5. Projected increase in floorspace by 2050. ............................................................................................... 27 Table 6. No Change baseline: Changes in fuel consumption compared to 2015 (GWh) ....................................... 28 Table 7. Maximum potential LZC capacity ............................................................................................................. 36 Table 8. Estimated proportion of 2015 energy demands that could be met by maximising LZCs (%) ................... 36 Table 9. Summary of individual impacts of CO2 saving measures ........................................................................ 40 Table 10. Fuel consumption in the 'Realistic' pathway to 2050.............................................................................. 42 Table 11. Fuel consumption in the ‘Accelerated’ pathway to 2050 ........................................................................ 44



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1. Executive Summary

Objectives of the study

The City of London, as part of its corporate objectives for 2018-2023, has identified energy resilience and the achievement of positive environmental outcomes as key issues. To assist in meeting these objectives the City of London (CoL) has commissioned a study to

Define the baseline and source of existing CO2 emissions in the City of London

Understand the impacts of national and GLA policy and initiatives on future emissions in the City of London

Define opportunities for City of London to deliver further CO2 emission reductions through local measures

Identify potential scenarios to achieve zero carbon by 2050

Use the scenarios to define the actions required to achieve the vision of delivering Zero Carbon by 2050.

Recommendations from this study will be developed into a number of tasks for implementation through the Climate Action Strategy. There are numerous drivers for the City of London Corporation to pursue its Zero Carbon City aspiration. In addition to national Government and GLA policies and strategies there are economic drivers, around energy costs and security of supply, ensuring that the City retains its global competitiveness, social drivers around corporate social responsibility and reporting requirements which are an important component for investment, and environmental drivers for reducing CO2 emissions and improving air quality.

The study has focussed on Scope 1 and 2 emissions and therefore includes an assessment and analysis of fuel use from building and transport operations within the City and upstream purchased energy. Scope 3 emissions have been excluded from this analysis.

Modelling a pathway to Zero Carbon

To assess how the City of London could deliver a Zero Carbon target a model was developed which aims to assess the potential reductions from national (UK Government), regional (GLA) and local (City of London) measures.

The model outputs a high-level temporal analysis of the scale and direction of changes that could occur in regards to energy demand and CO2 emissions. Results are disaggregated by sector, building use category, vehicle types, and energy end uses, under alternative climate scenarios. This allows the user to:

• Project energy demands and CO2 emissions on an annual basis through the year 2050; • Roughly quantify the impacts of key trends, variables and CO2 reduction measures; • Conduct sensitivity testing to identify key opportunities, implications, and risks; and • Estimate the remaining CO2 emissions that may need to be offset once all measures are adopted.

Three scenarios were developed in the model to test the sensitivity of different levels of national and regional actions and the impact this would have on the measures -

1 ‘No change’ – this scenario assumes that the only change in CO2 emissions is an increase in CO2 due to new development, with no CO2 reduction measures and no change to the current carbon emission factors.

2 ‘Realistic’ – this scenario takes a cautious view of potential decarbonisation measures, with relatively easy wins such as PV installations and other changes taking place in line with recent trends.

3 ‘Accelerated’ – this scenario considers the effect of fully implementing policies or stated governmental aspirations relating to CO2 reduction, through measures such as refurbishing the entire building stock, covering all suitable roof area in PV, banning traditional fuel vehicles and decarbonising the gas grid.

The results from these scenarios are shown in the table and graph below:



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Change compared to 1990

Change compared to 2015

Remaining shortfall (ktCO2 per year)

‘No change’ scenario 46% decrease 14% increase 983 ktCO2

‘Realistic’ scenario 79% decrease 56% decrease 378 ktCO2

‘Accelerated’ scenario 96% decrease 93% decrease 64 ktCO2 The following table shows the breakdown of measures and the estimated percentage reduction that could be delivered by each individually. As these have been tested as discrete individual factors the results are not cumulative and will have impacts on each other, which is why they do not add up to 100%.

Estimated maximum % reduction in CO2 emissions compared with 2015 levels

Electricity grid decarbonisation Up to 76%

Delivery and expansion of heat networks that use electrically-driven heat pumps

Up to 17%

Refurbishment of the existing building stock Up to 11%

Replacement of gas boilers with heat pumps Up to 14%

Behaviour change e.g. ‘lights off’ policy, lower heating, etc. Most measures discussed deliver around 1-4%

Uptake of low carbon vehicles Up to 7%

Transport management Up to 3% Recommendations

Based on the results of this study we recommend that in order to achieve the ambition of delivering the Zero Carbon target the City of London Corporation should:

• Take steps to support and respond to the proposed decarbonisation of the national grid; • Take a proactive role in supporting the forthcoming changes to the City’s energy infrastructure; • Take steps to support and respond to the proposed decarbonisation of the transport sector; • Ensure that new development delivered within the City supports progress towards the Zero Carbon

target; • Provide support for heat network development and expansion within the City; • Show leadership on improving the existing building stock through measures to reduce CO2 emissions

on its own estate; • Provide support to stakeholders in delivering CO2 savings within their estates; • Investigate options for delivering off-site CO2 emission reductions to achieve the Zero Carbon vision; • Set up a process to monitor and review CO2 emissions and progress against the recommendations and

actions set out in this report to assess progress towards the Zero Carbon target.



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Next steps

An action plan has been created for the Corporation to respond to the results, conclusions and recommendations presented in this report, the key actions are summarised below:

• Establish a means of monitoring and reporting of key metrics to monitor progress towards the Zero Carbon target.

• Work with UKPN, the GLA and other stakeholders to understand how the Corporation can support the delivery the anticipated changes to local energy infrastructure including reinforcement of electricity networks, power storage, uptake of smart systems, development and expansion of heat networks, access to secondary heat sources etc, through planning policy, studies, guidance and direct investment.

• Work with TfL, the GLA and other key stakeholders to support and encourage the uptake of low carbon vehicles through the provision of charging infrastructure and assessing other opportunities such as intelligent road pricing.

• Work to improve the performance of the existing building stock within the City by improving the Corporation’s own estate, undertaking a building stock assessment, providing guidance and support , driving refurbishment through the planning system or business rates and promoting monitoring and reporting schemes.

• Use the planning policy to ensure that new development achieves high performance through better guidance on building design and support for connecting to heat networks and delivering low carbon heating systems.

• Undertake further assessments and consultation on the options for offsetting to deliver the Zero Carbon target.



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2. Introduction

2.1 Purpose of the Study

The City of London, as part of its corporate objectives for 2018-2023, has identified energy resilience and the achievement of positive environmental outcomes as key issues. To assist in meeting these objectives the City of London (CoL) has commissioned AECOM Limited to review the energy use and carbon emissions for the City’s central London geographic area, to identify trends and their causes, and to map out future trajectories in carbon emissions based on a response to different technology, policy and behavioural Interventions with a view to make the City of London a Zero Emission City by 2050. The recommendations to achieve a zero or near zero emissions for the City will then be developed into the work for implementation through the Climate Action Strategy.

In order to be able to identify a pathway to a zero emissions City the following work has been undertaken. An assessment of the existing energy use in the City by the commercial, public service, domestic and transport sectors has been undertaken based on the total energy use and carbon emissions broken down by fuel source. The energy use and resulting carbon emissions over a 10 year period have been modelled to identify trends since 2005. In order to be able to identify different scenarios that could help the City towards zero carbon a division of fuel use by end use (e.g. lighting, cooling, etc.) is also provided. A workshop session with local area stakeholders was hosted with the City, to discuss the proposed scenarios and establish broader thinking behind potential challenges and opportunities for some of the proposed scenarios. The workshop sessions were divided into four themes of transportation, behavioural change & offsetting, energy infrastructure and buildings and groups were asked to consider a number of issues and consider how issues are currently being addressed, the development of measures to reduce emissions and what potential barriers might be. The measures were discussed in a national, regional and local context as set out in

In setting and meeting this long term ambition and low carbon vision, it will be important to work with a broad range of business and industry stakeholders, many of who were represented at the stakeholder engagement workshop, to understand their needs and ambitions. Collaboration will be key to the collective buy-in to the aims and objectives for supporting the development of a zero carbon strategy that reduces and manages demand, optimises use of renewable and low carbon energy sources, promotes innovation around energy management and transitions the City to a cleaner and resilient energy future. To facilitate the development of a preferred trajectory, a stakeholder event was held to acquire the thoughts of those occupying, owning, managing, investing and delivering buildings and infrastructure in the City.

2.2 Overview of the City of London

The City of London is a unique part of the UK, covering one square mile of central London with around 7,500 residents and over 480,000 people commuting to work every day. The City also welcomes 18 million visitors each year. This population profile split is likely to remain with an increase of at least another million square metres of commercial office space alongside modest growth in the residential floorspace. It is a very densely built-up area, giving limited opportunities for delivering large scale energy infrastructure in situ.

Given the prominence of commercial entities based in the City, businesses, residents and visitors rely on energy infrastructure for continuity and resilience of supply and carbon reduction, assisting them in fulfilling Corporate Social Responsibility goals, carbon accounting targets and personal commitments.

The utility and energy service companies are central to providing and influencing the future provision and carbon performance of energy supplies for the future City. Known as global centre for green finance facilitating environmentally responsible investment, the promotion of this role must be matched with local action to demonstrate the City's commitment to clean growth and support and implement a framework so that all stakeholders are able to participate.

2.3 Scope of this report

This study has considered:

• Scope 1 emissions – Emissions from sources owned or controlled by the organisation (in this case, organisations, both public and private within the City of London area). This would include e.g. emissions from the combustion of gas for space heating or the use of petroleum products in the transportation sector. However, fuels associated with onsite construction activities are not assessed due to unavailability of data.



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• Scope 2 emissions – Emissions from the consumption of purchased electricity, steam or other sources of energy generated upstream, and most likely sourced from outside the City boundary. This includes energy supplied to the built environment.

The study has not considered Scope 3 emissions, which are those that arise indirectly from the activities of an organisation but that are not controlled by the organisation. It therefore excludes the embodied carbon associated with the demolition and construction of new development and infrastructure or emissions resulting from the manufacture of goods used in the City.



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3. Background, Policy and Regulatory Context The following section sets out the key drivers, policies and regulations relating to energy use and carbon emissions which support low and zero carbon energy generation and energy efficiency in buildings initiatives in the City of London.

3.1 Drivers for a Zero Emissions City

Various targets and regulatory drivers have been created at a national and international level to incentivise action to avoid the potentially devastating impacts of climate change. These include economic, social and environmental drivers.

3.1.1 Economic drivers

The City of London is leading the way with the Green Finance Initiative promoting London and the UK as a leading global centre for the provision of green financial and professional services. It follows that the City of London should also itself be striving to be a green location by lowering emissions. In order to be able to operate as a global financial centre the resilience of the City’s energy supply is key to ensuring that there is both continuity in supply and also that the supply is sufficient to meet the needs of the of City’s occupants, both commercial and residential while also enabling further growth.

There are a number of economic drivers for addressing emissions within the City, primarily addressing the energy demand side will have an immediate effect on energy costs of the City of London as a landlord and occupier, commercial organisations, other public and third party sector bodies by lowering energy bills. This can be achieved through improvements in the building stock, smart technology and also behavioural change, changing the mind-set of how organisations and individuals operate.

Cost associated with carbon taxes, through more efficiently designed buildings will lead to less energy offset requirement to achieve a zero emission development. Reducing energy demands in existing buildings will also make them a more attractive option for prospective tenants.

3.1.2 Social drivers

Through addressing emissions within the City, the type of energy being used and the demand for energy will affect the emissions reporting of any Corporate Social Responsibility reporting that the City of London or other City businesses choose to, or are required to report on. Promoting energy efficiency, using alternative and cleaner fuel sources will affect the amount of greenhouse gases that are attributable to an organisation, particularly Scope 1 and Scope 2 emissions. Requirements for Scope 3 emissions reporting are becoming more prevalent and help demonstrate a more complete view of an organisation’s emissions. Providing a framework for addressing energy supply and promoting energy efficiency will help support organisations in their own activities, making the City a target location for existing and new business developments.

In addition to the organisation level addressing emissions and air quality, studies have shown that there is a growing trend for more values-driven businesses to be more attractive to the new generation of millennials entering into the workforce. There is a growing culture of people wanting to have a better worklife balance and a healthier lifestyle, and a recent study “ City Streets” promoted by the City of London at the interim stage identified walkable streets and reduced congestion as the top priorities for the City to address by those living and working in the City.

3.1.3 Environmental drivers

As a densely built area and with nearly half a million commuters coming into the City every day, the impact of supporting the energy demands of the population and their transportation of them has significant environmental impact in terms of air quality and carbon emissions. A dense urban environment can lead to a heat island effect, caused by the conductivity and absorption of construction materials retaining heat, also the height of buildings and interwoven narrow streets typical of the area means that night-time cooling is at a slower pace resulting in increased cooling demand. Changes in the way in which energy, especially heating, is provided will also have an effect on air quality, as gas boilers, gas-fired combined heating and power (CHP) and diesel generators all have a local impact on NOx levels, PM10 and CO2, whereas an increasing use of heat pumps would avoid this.

Another effect of the dense urban environment is that emissions from transport have a negative impact on the air quality. City is an Air Quality Management Area, any technologies or solutions proposed need to ensure that the air



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quality will not deteriorate through their use. Encouraging alternatives to vehicle use, particularly limiting or excluding non-low emission vehicles will help improve local air quality and indeed some initiatives such as the Low Emission Neighbourhood schemes already in place as a three year programme can be used to facilitate this. Air pollution is of such a concern due to both short and long term health impacts that both DEFRA and the City of London produce daily data on air quality which is easily accessible by the public.

Local authorities are uniquely placed to respond to these measures. The City of London can play a key role in facilitating a transition to a zero emissions City, by providing infrastructure that supports CO2 reduction measures, ensuring that suitable policy and monitoring mechanisms are in place, and also leading by example, adopting best practice measures and encouraging others to do the same.

In addition to drivers there are a number of key policies and legislation which support a clean growth strategy, these are set out below at the international, national, regional and local level. A summary is provided below and further details are provided in 10.2.

3.2 Summary of policies and legislation

3.2.1 International

There are a number of international policy commitments which the UK is party to at a global and European level which have implemented commitments into UK legislation. These include the 1997 Kyoto Protocol which committed Parties of the UN Framework for Climate Change to set binding emission reduction targets up to 2020 after which the Paris Agreement will take effect. These agreements related to national level commitments to reducing greenhouse gas emissions, in order to keep global temperature increases below 2oc.

At a building level directives such as the EU Energy Performance of Buildings Directive (EPBD, 2002) requires all EU countries to improve their Building Regulations and introduce energy certification schemes. The 2010 recast EPBD required countries to move towards new and retrofitted ‘nearly zero energy buildings’ standards by 2020 (2018 for public buildings). Translated to UK legislation through regulations such as Energy Performance of Buildings Regulations enables the UK to become more accountable for the development and redevelopment of building stock.

3.2.2 National & Regional Policies

Over recent years there have been a number of key national and regional policies and strategies that support the objective of reducing emissions including the Climate Change Act (2008) which sets a legally binding target to reduce UK CO₂ emissions by at least 26% on 1990 levels by 2020 and at least 80% by 2050, and the UK Renewable Energy Strategy (2009) which commits the UK to generating 15% of its energy from renewable sources by 2020.

Also the recently published Industrial Strategy: building a Britain fit for the future (2017) set ‘Clean Growth’ as one of four Great Challenges for the future of industry. Being at the forefront of resolving this challenge could bring a significant competitive advantage for UK’s businesses that embrace it and growth rates are predicted to be four times higher than the national GDP. This ambition is supported by a range of policy proposals set out in The Clean Growth Strategy; Leading the way to a low carbon future (2017).

The National Planning Policy Framework states that “Local planning authorities should adopt proactive strategies to mitigate [...] climate change”, and “design their policies to maximise renewable and low carbon energy development”.

Further details of specific policies and legislation are summarised below in Appendix B .



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4. Establishing a baseline This section describes the baseline fuel consumption and CO2 emissions from the building stock and transportation sector in the City of London. Historic trends covering the years 2005-2015 are presented, where relevant, in order to provide further context. Then, an estimate is made of the currently installed low and zero carbon (LZC) energy capacity.

4.1 Fuel consumption

4.1.1 Data sources and methodology

Fuel consumption figures were taken from the Department of Business, Energy and Industrial Strategy (BEIS) publication: ‘Sub-national total final energy consumption statistics: 2005-2015’ (published in 2017).1 Transport fuel data was additionally taken from ‘Sub-national road transport fuel consumption statistics: 2005-2015’ (published 2017) which reports petroleum and/or diesel consumption for cars, motorcycles, buses, light commercial vehicles and heavy goods vehicles (HGVs). 2015 is the most recent year for which data is available. For further information, see the ‘Sub-national methodology and guidance booklet 2016 (BEIS, December 2016).2

4.1.2 Current baseline

Table 1 shows that total fuel consumption in the City was approximately 2,875 GWh in 2015. This is one of the lowest totals for Inner London authorities, similar to the total consumption for the London Borough of Hackney in 2015 (2,854 GWh), and around 60% lower than Westminster (7,766 GWh) , as shown in Figure 1, though the area coverage and building tenure mix vary considerably.

Figure 1. Fuel consumption in Inner London (2015 data)

The largest portion of fuel consumed was electricity (65.9%), with gas and petroleum accounting for 25.6% and 8.5%, respectively. Other fuels, including bioenergy & waste, coal, and manufactured fuels make up the remainder (<0.01%). This is illustrated in Figure 2. Note that bioenergy and waste is not reported by sector.

Table 1. City of London fuel consumption by sector and fuel type in 2015 (GWh)

Fuel Consumption (GWh)

Non-domestic Domestic Road transport

Rail Bioenergy & waste

Total

Gas 708 29 - - - 736

Electricity 1,866 27 - - - 1,894

Coal - 0.001 - - - 0.001

Petroleum 39 0.3 205 0.1 - 245

Manufactured fuels - 0.003 - - - 0.003

Bioenergy & waste - - - - 0.044 0.044

Total by sector 2,613 56 205 0.1 0.044 2,875

1 https://www.gov.uk/government/statistical-data-sets/total-final-energy-consumption-at-regional-and-local-authority-level 2 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/609332/Sub-national_Methology_and_Guidance_Booklet_2016.pdf

https://www.gov.uk/government/statistical-data-sets/total-final-energy-consumption-at-regional-and-local-authority-level

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/609332/Sub-national_Methology_and_Guidance_Booklet_2016.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/609332/Sub-national_Methology_and_Guidance_Booklet_2016.pdf



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Figure 2. Fuel consumption by fuel type in 2015 (%)

Figure 3 depicts the breakdown of fuel consumption by sector, based on the information provided in Table 1. Note that fuel consumption for railways, bioenergy & waste and manufactured fuels are not shown as these constitute a very small proportion of the total.

Figure 3. Fuel consumption by sector and fuel type in 2015 (GWh)



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As shown in Figure 3, the majority (91%) of fuel consumed is associated with the non-domestic sector. Petroleum associated with road transport accounts for roughly 7% of fuel consumed in the City, whereas the domestic sector accounts for merely 2% of total fuel consumed.

Within the non-domestic sector, 71% of fuel used is electricity, followed by gas (27%) and petroleum (2%). This likely reflects the high proportion of office floorspace within the City. Within the domestic sector, consumption is more evenly split between electricity (49%) and gas (51%).

Table 2 shows the reported fuel consumption for road transport in 2015. Total transport fuel consumption in the City was approximately 205.4 GWh (17,665 ktCO2e) in 2015. The estimated breakdown by vehicle type is shown in Figure 4. Fuel consumption by road vehicle type in 2015 (%), which indicates that the majority of road transport fuel (around 60%) was used for cars and taxis.

Note that the data source used only reports petroleum and diesel for the road transport sector. Electricity use (for electric or hybrid vehicles) is not represented in the dataset. Biogas/biodiesel is also not reported. The City of London is considered likely to have a higher-than-average proportion of hybrid, electric or other renewable fuel vehicles, due to the prevalence of private hire cars and the use of hybrids and biodiesel engines in TfL buses. The BEIS statistics may therefore overestimate the amount of petrol and diesel used within the City.

Table 2. Fuel consumption by road vehicle type in 2015 (GWh)

Figure 4. Fuel consumption by road vehicle type in 2015 (%)

Figure 5. Number of vehicles by type in 2016 from screen-line counts (%) Source: CoL Corporation



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4.2 Carbon emissions


CO₂ emissions for the City were taken from BEIS ‘UK local authority and regional carbon dioxide emissions national statistics: 2005-2015’ (published in 2017).3 2015 is the most recent year for which data is available.

For further information, see the ‘Technical Report: Local and Regional Carbon Dioxide Emissions Estimates for 2005-2015 for the UK’ (BEIS, June 2017).

Note that CO2 emissions for transport are not reported by vehicle type in the BEIS dataset used, but a rough estimate has been made based on Local Authority Emissions Inventory data from 2013.4 The LAEI dataset is understood to form part of the BEIS dataset and therefore it is assumed that these are generally in alignment.


The 2015 data breakdown for the City is shown in Table 3, and is used as an emissions baseline in this study. (For an explanation of the key methodological difference between these estimates and those used in a previous 2009 carbon emissions report carried out by URS, see Appendix C ).

Table 3. City of London carbon emissions in 2015 (ktCO2)

* ‘Large installations’ refers to large industrial users. For more information, refer to the BEIS Technical Guidance.3

The BEIS estimate for 2015 total CO2 emissions in the City of London is 860 ktCO₂. This total consists of the non-domestic, domestic and transport values shown in Table 3, adjusted for land use, land use change and forestry (LULUCF) emissions.5

As shown in Figure 6 and Figure 7, the majority of emissions in the City are attributed to the non-domestic sector (91%), followed by the transport sector (7%). Domestic emissions account for merely 2% of total CO2 emissions, reflecting the low number of residents (the BEIS CO2 dataset indicates that the population was roughly 8,800 in 2015). The single largest proportion of CO2 emissions results from non-domestic electricity use which accounted for nearly 75% of total emission in 2015.

3 https://www.gov.uk/government/statistics/uk-local-authority-and-regional-carbon-dioxide-emissions-national-statistics-2005-2015 4 The LAEI (2013) dataset reports the percentage (%) split of CO2 emissions by vehicle type for 2008, 2010 and 2013, along with predictions for 2020, 2025 and 2030. Linear interpolation was used to estimate the split of road transport emissions for all years from 2008-2030 and the 2020-2030 trend was extrapolated to 2050. Then, the LAEI estimate for 2015 (% of emissions by vehicle type) was applied to the BEIS 2015 figure (total CO2 emissions from road vehicles). 5 Land Use, Land Use Change and Forestry. This adjustment reflects the fact that certain land use activities (e.g. planting or cutting down trees) may act as either a sink or source of CO2 emissions.

https://www.gov.uk/government/statistics/uk-local-authority-and-regional-carbon-dioxide-emissions-national-statistics-2005-2015

https://www.gov.uk/government/statistics/uk-local-authority-and-regional-carbon-dioxide-emissions-national-statistics-2005-2015



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Figure 6. CO2 emissions by sector in 2015 (%)

Figure 7. CO2 emissions by sector and fuel type in 2015 (ktCO2)

The LAEI 2013 inventory includes a breakdown of road transport emissions, which is described in Figure 8 below. Note that, as stated in Section 4.1.2, these figures assume that all vehicles use either diesel or petrol.



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Figure 8. Estimated breakdown of road transport CO2 emissions (LAEI 2013)

4.2.3 CO2 emission trends

The BEIS data has been used to track a historical trend for emissions in the City for the years 2005 through 2015. On aggregate, as shown in Figure 9, total CO2 emissions have fallen by nearly 48% between 2005 and 2015. This is mainly the result of changes in fuel consumption, and changes in the carbon intensity of the fuels consumed.6

Figure 9. Historic CO2 emissions, 2005-2015 (ktCO2)

The decrease is primarily attributed to decreasing emissions from non-domestic buildings, which account for the majority of both fuel consumption and CO2 emissions. There was a decrease in both gas (-25%) and electricity (-(-28%) consumption over this period, as shown in Figure 10. Domestic emissions decreased by 27% over this

6 Note that because carbon emissions statistics use a different methodology and include some point-source estimates these may not necessarily align directly with fuel consumption statistics given.



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period, reflecting a decrease in gas consumption (-22%) and despite a small increase in electricity consumption (+7%).

The grid emissions from electricity decreased by roughly 25% during this period, rom 0.46 kgCO2/kWh in 2005 to 0.35 kgCO2/kWh in 2015,7 whereas those for natural gas remained relatively stable. Because of this, and because electricity accounts for the largest single proportion of fuel used within the City, changes in electricity consumption have a disproportionate impact on total CO2 emissions.

Figure 10. Non-domestic buildings fuel consumption

Transport emissions decreased by 22% during this period. This is likely influenced by the steep decline in petrol cars, which can be seen in Figure 11; when petrol cars are excluded, the consumption of petroleum products for road transport consumption actually increased during this time.

Figure 11. Fuel consumption in the road transport sector 2005-2015 (GWh)

When interpreting these results, it is important to note that:

• Changes in CO2 emissions do not necessarily reflect changes in fuel consumption or energy efficiency. For instance, an increase in electricity use may be offset by a decrease in electricity grid emissions.

• Similarly, year-to-year changes in fuel consumption relate to factors such as weather and should therefore be interpreted with caution.

• Emissions from electric vehicles and biofuels are not included in the BEIS statistics and are not assessed.

7BEIS ‘Government GHG Conversion Factors for Company Reporting’ (2017) available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/650244/2017_methodology_paper_FINAL_MASTER.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/650244/2017_methodology_paper_FINAL_MASTER.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/650244/2017_methodology_paper_FINAL_MASTER.pdf



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• Fuel consumption and CO2 emissions from heat networks are not disaggregated in the BEIS datasets. This is a source of uncertainty in the baseline estimate and is discussed in more detail in Appendix E .

Therefore, this information can not necessarily be used to assess the impacts of any CO2 reduction measures that may have been implemented within the City of London during this time period.

4.3 Renewable, Low and Zero Carbon (LZC) energy generation capacity

4.3.1 Acronyms

• LZC: Low and zero carbon (technologies)

• PV: Photovoltaic panels

• SHW: Solar hot water

• ASHP: Air source heat pump

• GSHP: Ground source heat pump

• WSHP: Water-source heat pump

• CHP: Combined Heat and Power

• DHN: District Heat Network


The current amount of renewable capacity installed in the City was estimated from the following sources:

• OFGEM Feed-in Tariff (FiT) data

• OFGEM Renewable Heat Incentive (RHI) data

• BEIS installed CHP capacity

• CHP Quality Register

• EPC database8

It is possible that some technologies, particularly those that produce renewable heat as opposed to electricity, are underrepresented in this assessment. In particular, the RHI database indicates that within the City of London there are between 1-5 non-domestic accredited installations and zero domestic installations. Due to the small number and lack of data on the technology or capacity, these have been excluded; however, it is likely that there are air or ground source heat pumps (ASHPs and GSHPs) not captured by this review.


Table 4 summarises the low and zero carbon energy installations identified within the City of London. This review indicates that there are various building-mounted PV arrays (around 340 kWp), a large PV array on Blackfriars Bridge (1.1 MWp), and Citigen, a gas-fired CHP district heat and cooling network (8.6 MW). In total, this amounts to roughly 10 MW of installed capacity.

Table 4. LZC installations within the City of London.

The Citigen network is within the boundary of the London Borough of Islington, but nearly all of the thermal energy

8The EPC database (accessed February 2018) includes records of 84 homes with ASHPs, two with biomass boilers and 38 linked to either a ground or water source heat pump. Because these represent a small proportion (around 2% of the total domestic stock), and because of inconsistencies in the way that EPC data reports heating fuel type, for the purpose of this report these installations have been excluded from the LZC total figures.



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supplied is consumed within the City of London. Citigen includes an 8.6MWe/8.3MWth gas-fired CHP engine which currently has an output of roughly 33,000 MWh per year.9 It is anticipated that connections will be provided within the next 1-2 years for Farringdon East Crossrail station and Bernard Morgan House. Connections have also been proposed to the Central Criminal Court and St Paul’s Cathedral, among other opportunities.

There is also a 1.4 MWh gas CHP engine at St Bartholomew’s Hospital, and the Bloomberg Building is understood to have three 520 kWe gas CHP engines.

4.4 Summary

Non-domestic electricity use is the single largest contributor to CO2 emissions, followed by non-domestic gas consumption, and then petroleum products used for road transport. This is to be expected given the type of activities that take place within the City. CO2 emissions decreased significantly from 2005-2015, primarily due to a decrease in non-domestic fuel consumption and a sharp decline in the carbon intensity of grid electricity.

There are relatively few renewable energy installations in the City by number, but there is a large solar array on Blackfriars Bridge, various (presumably building-mounted) small-scale PV installations, a large-scale cross borough district heat and cooling network (Citigen) along with CHP systems at St Bartholomew’s Hospital and the Bloomberg Building. It is considered likely that there are other renewable heat technologies installed that are not captured by available datasets.

9 https://www.theade.co.uk/assets/docs/case-studies/Edina_Case_Study_-_Citigen.pdf

https://www.theade.co.uk/assets/docs/case-studies/Edina_Case_Study_-_Citigen.pdf



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5. Modelling the pathway to zero carbon A modelling exercise has been carried out in order to demonstrate possible pathways towards achieving zero carbon emissions from the City of London by 2050. The core aim of the model is to provide a quantitative evidence base for the City of London to identify priority actions for achieving the goal of becoming a zero carbon City by 2050.

The model outputs a high-level temporal analysis of the scale and direction of changes that could occur in regards to energy demand and CO2 emissions. Results are disaggregated by sector, building use category, vehicle types, and energy end uses, under alternative climate scenarios. This allows users to:

• Project energy demands and CO2 emissions on an annual basis through the year 2050;

• Roughly quantify the impacts of key trends, variables and CO2 reduction measures;

• Conduct sensitivity testing to identify key opportunities, implications, and risks; and

• Estimate the remaining CO2 emissions that may need to be offset once all measures are adopted.

5.1 Modelling approach

The model is an Excel-based tool that allows users to modify the following variables:

• New office, retail, hotel and domestic floorspace

• Energy performance and rate of refurbishment of existing buildings

• Carbon emissions standards of new buildings

• Decarbonisation of the electricity grid

• Uptake of heat pumps and district heating networks

• On-site renewable energy generation

• Uptake of electric vehicles and biofuels

• Transport changes such as journey reductions/restrictions

• Carbon offsetting measures including large-scale offsite LZCs and tree planting

5.1.1 Buildings

Energy demands in buildings are based on current and projected amounts of new floorspace for offices, retail, hotels and housing (see Section 6.1). The user has an option to add a ‘buffer’ to assess the impacts of delivering more or less floorspace for a particular use category.

Based on user inputs for the rate of refurbishment, the percent of existing buildings that are upgraded, uptake or low carbon heating technologies, and the anticipated types of heating system, the model recalculates floor areas for new, existing, and refurbished buildings by heating system type for each year of the analysis.

Energy consumption in new buildings has been estimated using bespoke benchmarks, developed by AECOM on behalf of the GLA in 2015 (see 0). These benchmarks assume that new buildings achieve compliance with Part L 2013 fabric performance standards.

Energy consumption is then calculated by multiplying the floor area (m2) or number of dwellings by the relevant benchmark for each planning use category (kWh/m2 or kWh/dwelling), accounting for typical heating or cooling efficiencies. Energy consumption for existing buildings is calibrated so that the first year of the calculation (2015) aligns with 2015 BEIS fuel consumption data.

CO2 emissions are then calculated based on current fuel emission factors for gas and electricity, and a user-selected electricity grid decarbonisation scenario for comparison. For the purpose of calculating CO2 emissions, it is assumed that all new buildings achieve a further CO2 reduction of 35% for regulated energy uses, which is the minimum target for on-site reduction for major developments as per the GLA London Plan (2016).



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5.1.2 Transport

The user can select one of three different road transport fuel trajectories which are intended to represent economic growth with no CO2 reduction measures. These are based on (1) historic trends for CoL road transport fuel consumption from 2005-2015, (2) BEIS Future Energy Projections for road transport petroleum use and (3) LAEI projections for CO2 emissions by vehicle type.

Percentage reductions are applied to represent reductions in the number of journeys, travel restrictions (e.g. no private cars during the week), and uptake of renewable fuel vehicles. It is assumed that vehicles currently using diesel will switch to biofuel, whereas those currently using petrol will switch to electricity, with the exception of diesel cars which are also expected to switch to electricity.

These reductions are used to recalculate the amount of petrol, diesel, biofuel and electricity used for each vehicle type through the year 2050. CO2 emissions are then estimated based on the user’s selected electricity grid decarbonisation scenario and IAG projected fuel emission factors for petrol and diesel. Biofuels are assumed to be net zero carbon.

At present the BEIS dataset does not report electricity use for transport and it is not clear whether these emissions should be allocated to the location of charging (which would be consistent with the approach taken for electricity use in buildings) or location of travel (consistent with the approach taken for other transport fuels). Therefore, EV emissions are included in the total figures but can be reported separately.

5.1.3 Low and Zero Carbon (LZC) technologies

The total potential LZC capacity for the City is discussed in Section 4.3. CO2 savings are calculated on the assumption that PV and large wind turbines will displace grid electricity whereas SHW and water source heat pumps (WSHPs) will displace gas. The user can input the amount of suitable roof area that is covered by PV or SHW, up to 100%. It is assumed that, even if there is an increase in floor area, the total footprint and therefore amount of suitable roof area will not change over time. There is no limit on the size of offsite/large-scale PV arrays or wind turbines that can be added; these are used to illustrate the scale of potential offsetting that would be required in order to reach net zero carbon.

As a detailed assessment of WSHP feasibility has not been carried out, the user is limited to a range of sizes up to three times larger than a known WSHP located upriver at Kingston-upon-Thames and this is for illustrative purposes only.

Air and ground source heat pumps are represented in the model as one of several options for heating systems. The model calculates the split of floor area for each building use category and age by heating type for each year based on user inputs. Energy demand benchmarks and typical system efficiencies are then used to derive total fuel consumption.

5.1.4 Other assumptions

Several options are available to override the calculated fuel consumption or CO2 emissions. For instance, users can input reductions in total building energy use due to changes in behaviour, or reduce energy demands for lighting and appliances. These do not represent any specific policies but can be used to assess the relative impact of policies that would target e.g. energy management strategies or specific end uses.

In 2015, CO2 emissions for fuels/sectors other than gas, electricity and road transport accounted for 11 ktCO2, which is <2% of the total emissions for that year . For the purpose of this analysis, this figure is held constant; it is assumed that this amount would be offset, along with all other residual emissions.

Emissions from the London Underground are not reported in the BEIS dataset for the City and have been excluded from this report. Note that these would be expected to include a high proportion of commuter travel; emissions from commuting (Class 3) are outside of the scope of this study.

In addition to large-scale offsite LZCs, the user can also input a number of trees planted per year, assuming that each tree can absorb around 150 kg CO2 over 10 years. Again, this is intended as an illustrative measure to highlight the offsetting requirements.

Further details are provided in Appendix D and model inputs/outputs can be viewed in the enclosed Excel spreadsheet.



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5.2 Estimated end uses of energy and CO2

The model described above has been used to provide a rough estimate the split of end uses of energy and CO2 emissions for buildings within the City of London. There is significant uncertainty associated with these results (see Appendix D ); however, they can provide a broad picture which can be useful to inform more detailed studies and development of demand reduction strategies.

A sense check was carried out to confirm that the benchmarks adequately represent the existing building stock. The predicted electricity consumption was found to be around 10% higher than BEIS 2015 figures and the predicted gas consumption was around 2% lower. Recognising the year-to-year fluctuations in energy consumption, this variation was considered acceptable for the purpose of this study.

5.2.1 Fuel consumption

The estimated split of fuel consumption in the existing building stock is shown in Figure 12. This includes both gas and electricity (percentages refer to the proportion of total GWh used in 2015). Note that these figures show energy consumption, not demand, i.e. they account for the efficiency of different systems. This means that, for instance, while demands for cooling and heating are roughly the same, heating is often delivered by gas boilers with an efficiency of around 82% whereas the efficiency of chillers can be 300% or higher. It is also understood that the City of London represents a unique case compared with the rest of the UK and therefore estimates based on national benchmarks and generic building forms may still not accurately reflect the actual end uses.

Figure 12. Estimated split of fuel consumption by end use (% of total GWh)

Figure 13 shows the estimated breakdown of gas consumption (left) and electricity consumption (right) based on AECOM estimates of floor area and heating type and bespoke energy benchmarks.

Figure 13. Estimated breakdown of gas and electricity consumption in the existing building stock (%)



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5.2.2 CO2 emissions

On the basis of this modelling, a rough estimate of the CO2 emissions by fuel type, and end use in buildings is provided in Figure 14 below. Percentages indicate the proportion of total CO2 emissions; figures add up to 92% and the remaining 8% comprises transport and all other uses. Figure 14. Estimated split of CO2 emissions by end use for existing building stock (% of total CO2 emissions)



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6. Future projections: The ‘No Change’ baseline This section of the report briefly describes the potential change in energy demand and CO2 emissions that might occur under a ‘No change’ development scenario, in which no action is taken to reduce CO2 emissions. In this assessment, the only variables considered are:

• New development of office, retail, hotel and domestic floorspace; and

• Changes in demand for road transport fuels.

6.1 Anticipated changes

6.1.1 Buildings

Energy consumption for the existing building stock is assumed to remain at 2015 levels throughout the analysis period (see section 4.1.1).

Net changes in office, retail, hotel and domestic floorspace are shown in Table 5 below. The total floor space for other planning use categories is presumed to remain at current levels.

Figure 15 shows the current estimated split of floorspace within the City, compared with the anticipated new totals in 2050.10 The changes would be roughly equivalent to the following relative increases in floor area: Offices +26%; Housing +71%; Hotels +77%; Retail +58%.

Figure 15. Projected new development within the City of London by 2050

10 Note that, for the purpose of this study it has been assumed that the additional floorspace will be added with no loss of existing floorspace. In reality, most if not all new development within the City will take place on previously developed sites.



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Table 5. Projected increase in floorspace by 2050.

Type Unit of measure As of 2016 2016-2021 2021-2026 2026-2031 2031-2036 2036-2041 2041-2046 2046-2051 Source

Offices m2

8,700,000 1,226,000

414,000

180,000

180,000

180,000

180,000

180,000

City of London Local Plan Monitoring Report – Offices (2017) Graph 4 Projected Office Floor space

Housing dwellings 7,079 1,030 744 730 730 730 730 730 City of London Housing Stock (2016); Housing Monitoring Report (2018); GLA London Plan (Draft 2017)

Hotels bedrooms 5,063 2,333 925 850 850 850 850 850 City of London Local Plan Monitoring Report – Hotels (2017)

Retail (A1-A5) m2

578,600

49,000

49,000

49,000

49,000

49,000

49,000

49,000

Retail units in the City of London (2017); City of London Retail Needs Assessment (2017)

Retail (A1-A2)

m2 387,722 32,800 32,800 32,800 32,800 32,800 32,800 32,800 Split of use classes is based on the City of London report, Retail units in the City of London (2017) Retail

(A3-A5) m2 190,878 16,200 16,200 16,200 16,200 16,200 16,200 16,200

NOTE: Rates of development after 2026 are assumed to continue through 2050.



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6.1.2 Transport

The projected change in demand for road transport fuel is based on the BEIS average annual year-to-year change in total (petrol and diesel) fuel consumption for the City of London from 2005-2015 (see Section 4), i.e. there is a net decrease over this period. This aligns closely with the BEIS national projections for changes in road transport fuel consumption. Fuel consumption for non-road transport is assumed to remain at 2015 levels throughout the analysis period.11

6.2 Energy demand and CO2 emissions

Based on these assumptions, the estimated future gas and electricity consumption within the City of London is presented in Table 6 below. Figure 16 shows the trajectory to 2050 using current fuel emission factors. The results are dominated by non-domestic buildings and, in particular, the high proportion of office floorspace.

Table 6. No Change baseline: Changes in fuel consumption compared to 2015 (GWh)

Figure 16. BAU scenario: City of London projected annual CO2 emissions 2015-2050

By the year 2050, annual CO2 emissions would reach roughly 983 ktCO2, a 14% increase from 2015 levels; emissions from buildings would increase by around 19%. As is presently the case, most of the increase in fuel consumption would result from electricity use in non-domestic buildings. Emissions from transport would tend to decrease from about 57 ktCO2 per year to 27 ktCO2 (-48%) over this period. The cumulative CO2 emissions from 2018 to 2050 would be roughly 33,200 ktCO2.

Change compared to… 1990



No change scenario 46% decrease 14% increase 983 ktCO2

Subsequent sections of the report will examine the impacts of anticipated trends, policy changes, and interventions that would be required to meet the goal of becoming a Zero Carbon City by 2050.

11 This approach has been taken due to unavailability of data but is expected to have only a small impact on the results, because the BEIS dataset indicates that non-road transport accounts for a small percentage (<1%) of total fuel use and CO2 emissions.



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Key risks of this outcome include:

• Fuel poverty and air quality issues not addressed; social implications

• Overheating and associated health risks

• Under different climate scenarios, the amount to offset might be higher due to e.g. cooling demands

• This scenario might be concordant with a lack of climate change mitigation in other regions or sectors, so effects might be magnified

• In a theoretical scenario where the electricity grid is 100% renewable any emissions from gas boilers or other fuels would become almost impossible to offset as adding more renewables would not offer a comparative saving.



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7. CO2 reduction trends This section of the report describes some of the key changes that are expected to take place in the built environment, transportation sector and energy infrastructure over the coming decade.

Sections 7.1 to 7.7 describe trends that are expected to take place on a primarily national and regional level. Section 7.8 describes opportunities for further CO2 reduction that can be more directly influenced by the City of London Corporation and local stakeholders. In reality these interactions are complex and distinctions are not set in stone.

7.1 Refurbishment of existing building stock

As demonstrated in Section 6.2, in order to achieve zero carbon emissions by 2050 it will be necessary to radically decrease emissions from existing buildings; in line with the Energy Hierarchy, the first priority in this regard is to reduce energy demand through fabric efficiency.

The Clean Growth Strategy emphasises the need to improve energy efficiency of buildings; for the existing stock this includes implementing higher standards (e.g. through MEES; see Appendix B ) with a particular focus on supporting businesses to improve their energy productivity and upgrading the energy standards of existing homes, with an aspiration for all buildings to achieve an EPC band C rating by 2030. Further changes will be implemented through the Building Regulations following an independent review into energy efficiency and fire safety standards.

In order to demonstrate the potential impact that this could have on CO2 emissions in the existing stock, an estimate has been made of the potential change in CO2 emissions from existing buildings that could be achieved if 50% of the existing stock was refurbished to meet fabric energy efficiency standards equivalent to Part L 2013.

The IES software assumes that energy use for cooking, hot water, heating and lighting decreases due to the use of more efficient fabric and services, while energy for cooling increases by around 30%. Energy for appliances and auxiliary uses is relatively stable. Overall, gas demand would decrease around 32% compared with 2015 levels, whereas electricity demand would decrease by around 7%. The refurbishment process would therefore reduce annual CO2 emissions by around 11% compared to 2015 levels.

The following should be noted:

• There are important reasons other than CO2 which support refurbishing the existing stock. Fabric and building services efficiency improvements can help to protect consumers against changes in fuel prices, mitigate fuel poverty and improve comfort.

• The total cumulative CO2 emissions from buildings through the year 2050 depends on how quickly the existing stock is upgraded. Completing this refurbishment process within 10 years would save, cumulatively, around 500 ktCO2 by 2050 more than if the process took 20 years.

• The actual change in CO2 due to refurbishment will depend primarily on decarbonisation of the electricity grid, as well as any fuel switching.

• The demand for electricity for cooling in the existing stock could increase by around 30% (before accounting for alternative climate scenarios) by 2050. If this is the case, it will be particularly important to prioritise passive measures and encourage development of renewable cooling technologies. On the other hand, it is possible that some of this increase could be offset by improvements in chiller or heat pump efficiency.

• One of the key obstacles would likely be the absence of a policy driver to ensure that this process takes place. The MEES regulations are intended to drive progressive improvements in the existing stock but the impact this will have is not yet clear.

7.2 Uptake of electric and renewable fuel vehicles

Despite the heavy reliance on petroleum in the transport industry, the electric vehicle market has seen considerable growth in recent years. Indeed, since the launch of the Plug-In Car Grant in January 2011, 119,881 eligible cars

Potential savings from refurbishment

of the existing building stock:

Up to 11%



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have registered across the UK.12 According to the Society of Motor Manufacturers and Traders (SMMT), total new car registrations decreased by 12.2% from October 2016 to October 2017, but EV registrations increased by 47.5% during this time period. The total number of EV registrations is shown in Figure 17.

The government has announced an intention to prohibit the sale of new petroleum cars by 2040.13 In addition by April 2019 the current congestion charging zone, which includes the City, will also become an ultra-low emission zone.14 TfL has announced a target of having 100% low emission buses by 2030, and there is also a target to reduce journeys by 50% by 2044.15

Figure 17. Registration of electric vehicles in the UK. Source: SMMT

BEIS 2015 statistics indicate that road transport accounts for around 7% of total emissions in the City of London. Accordingly, if all vehicles could switch to either biodiesel (assumed to be net zero carbon) or 100% renewable electricity, overall CO2 emissions for the City of London would decrease by 7%. However, emissions from EVs would reduce the level of improvement that is possible.

A rough estimate of the potential impacts on CO2 emissions has been made assuming that:

• All buses and HGVs switch from diesel to biodiesel; and

• All cars, taxis, motorcycles and light commercial vehicles switch from petrol or diesel to electricity

This is illustrated in Figure 18. In this scenario, the total emissions from diesel would drop to zero (due to biofuels) and emissions from EVs would be around 6 ktCO2 per year. Including these EV emissions would represent a roughly 6% decrease in overall CO2 emissions.

12 https://www.smmt.co.uk/2017/11/october-2017-ev-registrations/ 13 DEFRA, ‘Air quality plan for nitrogen dioxide in the UK’ (2017) Available at: https://www.gov.uk/government/publications/air-quality-plan-for-nitrogen-dioxide-no2-in-uk-2017 14 Transport for London, ‘Ultra Low Emission Zone’ (n.d.) Available at: 15 Mayor of London, ‘Transport Strategy’ (2018) Available at: https://www.london.gov.uk/sites/default/files/mayors-transport-strategy-2018.pdf

Potential savings from switching to

renewable fuel vehicles:

7%

(excluding EV emissions)

6% (including EV emissions)

https://www.smmt.co.uk/2017/11/october-2017-ev-registrations/

https://www.gov.uk/government/publications/air-quality-plan-for-nitrogen-dioxide-no2-in-uk-2017

https://www.gov.uk/government/publications/air-quality-plan-for-nitrogen-dioxide-no2-in-uk-2017

https://www.london.gov.uk/sites/default/files/mayors-transport-strategy-2018.pdf

https://www.london.gov.uk/sites/default/files/mayors-transport-strategy-2018.pdf



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Figure 18. City of London CO2 emissions from road transport 2015-2050

The National Grid report ‘Future Energy Scenarios 2017’16 suggests that there could be between 1.9 and 9.3 million EVs on the roads by 2030 which ‘if not managed carefully […] will create challenges across all sections of the energy system, particularly at peak times’ (p. 20). The report further suggests that electricity peak demand could increase by more than 40% nationally (from around 60GW to around 85GW) by 2050, driven by multiple factors including EV uptake and heat pump demand. Although any increase for the City of London would depend on a multitude of local factors, it is clear that the impact could be very large.

The use of smart EV charging and, potentially, vehicle-to-grid systems could mitigate some of the effects on peak demand and help to moderate the effects of intermittent LZC electricity generation. This suggests that consideration should be given to the location and capacity of charging points within the City. Measures that promote walking and cycling will also become more important.

7.3 Decarbonisation of the electricity grid

The emission factor for grid supplied electricity is expected to fall progressively over time in response to a changing mix of generation capacity on the electricity network (including less coal, more renewable energy and a renewal of baseload nuclear power stations).

Projected fuel emissions in the HM Treasury/BEIS ‘Green Book Supplementary Guidance: Toolkit for valuing changes in greenhouse gas emissions' (2017)17 suggest that the CO2 emissions for domestic grid electricity would need to fall from the current levels of approximately 0.35 kgCO2/kWh to 0.13 kgCO2/kWh by 2030 in order to meet the UK’s CO2 reduction targets. The actual rate of decarbonisation could be much faster or slower; if grid electricity was 100% renewable, there could be zero net CO2 emissions for electricity which would represent a roughly 76% saving compared with 2015 levels.

Due in part to the fact that electricity use accounts for the large majority of CO2 emissions in the City, this is a key risk when considering the pathway to 2050 as insufficient decarbonisation could jeopardise the goal of becoming a Zero Carbon City. On the other hand, this also means that even as electricity consumption increases due to future development, CO2 emissions could decrease overall, which could prove highly beneficial.

Figure 19 below illustrates the impact of this uncertainty. It assumes that there will be an increase in energy consumption resulting from the new development, as per the BAU scenario (see Section 5.2). The other estimates shown are based on the same underlying assumptions, and the only variable modified is the fuel emission factor for electricity. (Note that fuel emissions for natural gas are assumed to remain stable at 0.184kgCO2/kWh in all cases.18)

16 http://fes.nationalgrid.com/media/1253/final-fes-2017-updated-interactive-pdf-44-amended.pdf 18 The emission factor for mains gas is on a slight upward trend due to an increase in the importation of liquid natural gas and a reduction in North Sea gas supplies. However, in terms of understanding the shifts in carbon savings for different LZCs, the

Potential savings from electricity grid

decarbonisation:

Up to 76%

http://fes.nationalgrid.com/media/1253/final-fes-2017-updated-interactive-pdf-44-amended.pdf



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By 2050, the estimated annual CO2 emissions range from 262 ktCO2 (a 70% reduction compared with 2015) to 983 ktCO2 (a 14% increase compared with 2015).19

These results indicate that CO2 emissions from grid electricity may be the single most important factor in whether or not the zero emission goal is achievable – a key finding because it is outside of the City of London Corporation’s control. This suggests that, although LZC opportunities are somewhat limited (see Section 7.8), it will be important to maximise renewable electricity generation to reduce reliance on the national grid. This might inform CoL decisions about where best to focus resources and any carbon offsetting funds.

Figure 19. Potential City of London CO2 emissions based on alternative electricity grid decarbonisation rates (assuming no other CO2 reduction measures)

7.4 Decarbonisation of the gas grid

According to the Parliamentary Office of Science and Technology ‘POSTNOTE: Decarbonising the Gas Network’ (November 2017), roughly 14% of all carbon emissions in the UK arise from the use of natural gas for heating. It is generally assumed that natural gas will continue to play an important role in delivering heating in the UK in the foreseeable future. However, as noted in the Clean Growth Strategy, in order to meet the carbon emissions requirements of the Climate Change Act 2008, it will be necessary to significantly decarbonise the gas grid in the longer term.

This could be done in a variety of ways, for instance by increasing the use of either biomethane or hydrogen gas:

• Biomethane is presently injected into the grid in small quantities, but its use is limited by the availability of wet feedstocks and it would likely be unable to meet more than 5-20% of the current gas demand.

• Assessments of a potential transition to hydrogen gas indicate that there are a range of cost and technical issues to overcome, which would require a considerable increase in the amount and speed of research being undertaken. The use of hydrogen would incur additional costs due to the need to convert appliances and infrastructure for compatibility.

Decarbonising the gas grid is considered a significant challenge and therefore it is difficult to assess the impacts on the City of London. Barring a technological step-change, it is anticipated that more significant CO2 reductions will result from changes in the electricity grid and energy efficiency rather than the gas grid.

projected change in the gas emission factor is small enough to be ignored relative to the effect of decarbonisation of the electricity grid. 19 An average figure is not reported because the trajectories are not considered to be equally likely.



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7.5 Smart energy management

The Clean Growth Strategy includes a target of making smart meters available to all homes by 2020. The Government has been working with energy suppliers to ensure that these are offered to customers. According to BEIS ‘Smart Metering Statistics’ (Quarter 2, 21017), as of June 2017 it is estimated that approximately 7.7 million smart meters were in operation around the UK, including domestic and non-domestic buildings.20

One of the key benefits of smart meters is by improving transparency and user access to their own energy data, making it easier to identify areas of waste. Although it is not clear whether or to what extent this affects user behaviour in the long term,21 the improved data collection could also facilitate the introduction of demand side response, and on a broader scale, help to balance energy demand and supply, which is particularly important at peak times.22 In principle, therefore, these have the potential to reduce energy consumption, although the impacts have not been quantified.

7.6 Battery storage

There have been significant improvements in battery storage in recent years with implications for energy consumption across all sectors. Battery storage could facilitate uptake of LZCs because it would help to moderate periods of intermittency for generation from solar and wind. As stated above, increasing EV uptake and the introduction of vehicle-to-grid systems could have a transformative effect on the way that energy is delivered to buildings. This would also have implications for the design of energy infrastructure and allocation of space for plant rooms within buildings, although the space requirements would depend heavily on the types of systems in use. The National Grid ‘Future Energy Scenarios’ (2017) report imagines the impact this might have on the built environment (p. 103):

‘Many buildings in this world would be able to act as mini power stations, with rooftop solar or small wind turbines, a battery and an integrated building control system linked to multiple smart appliances.’

Although batteries are likely to become crucial to future energy infrastructure, they do not offer CO2 savings per se and have therefore been excluded from the quantitative analysis in this report. Space availability and impact of retrofit, for new and existing buildings will also be a consideration.

7.7 Changing energy efficiency and CO2 emission standards in buildings

The impacts of new development on energy consumption will depend, at least in part, on the energy efficiency of the new building fabric and services. It is difficult to anticipate future changes in the national energy efficiency standards when one considers, for instance, the introduction of the Zero Carbon Homes policy in 2006 and its last-minute withdrawal in 2015, just before it was due to come into full effect. There is also considerable uncertainty surrounding Brexit and the UK’s future adherence to the EU Energy Performance of Buildings Directive. Therefore, this report has not assessed the likely impact of future changes to Building Regulations.

Nonetheless, broadly speaking, in order to meet the legally binding targets of the Climate Change Act 2008 it is anticipated that national energy efficiency standards will become more stringent as time goes on. Proposed language in the draft GLA New London Plan (2017) would require all major developments to achieve net zero regulated CO2 emissions, with a minimum 35% to be achieved on-site, including energy efficiency measures of 10% (domestic) and 15% (non-domestic).

It is important to note that the GLA requirement only covers ‘regulated’ emissions, i.e. appliances are excluded. As described in Section 24, appliances are estimated to account for around 44% of total electricity consumption and around 33% of total CO2 emissions. Based on our modelling (see Section 5), by 2050 around 47% of electricity consumed might be for unregulated uses, so even if all new development was net zero regulated carbon and there was no change in the existing stock, annual CO2 emissions would still increase by 2050.

20 BEIS (Quarter 2 2017) Smart Metering Statistics https://www.gov.uk/government/statistics/statistical-release-and-data-smart-meters-great-britain-quarter-2-2017 21 http://fes.nationalgrid.com/media/1253/final-fes-2017-updated-interactive-pdf-44-amended.pdf 22 BEIS, ‘Smart Meters and Demand Side Response’ https://www.gov.uk/government/publications/smart-meters-and-demand-side-response

https://www.gov.uk/government/statistics/statistical-release-and-data-smart-meters-great-britain-quarter-2-2017

https://www.gov.uk/government/statistics/statistical-release-and-data-smart-meters-great-britain-quarter-2-2017

http://fes.nationalgrid.com/media/1253/final-fes-2017-updated-interactive-pdf-44-amended.pdf

https://www.gov.uk/government/publications/smart-meters-and-demand-side-response

https://www.gov.uk/government/publications/smart-meters-and-demand-side-response



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7.8 CO2 reductions: City of London and stakeholder opportunities

The previous sections discussed some of the key trends relevant to spatial development and planning over the coming years that are expected to occur on a primarily national or regional level. This section seeks to identify opportunities for the City of London and stakeholders to respond to those changes and deliver greater CO2 reductions. Potential responses might include:

• Increasing the uptake of low and zero carbon energy technologies;

• Supporting the delivery of heat networks;

• Minimising emissions from transport e.g. through design of infrastructure, traffic management (including time restrictions on certain vehicles), or reducing journeys by promoting ridesharing, walking and cycling;

• Supporting higher standards of sustainable design and construction through awareness and training, e.g. establishing best practice networks or offering training to facilities managers; and

• Ensuring that the City of London Corporation implements best practice measures in their own buildings wherever possible.

7.8.1 Increasing LZC uptake

Key assumptions about the maximum possible deployment of LZCs are summarised below. For all technologies other than water source heat pumps (WSHPs), these are based on a 2015 study that AECOM carried out on behalf of the GLA to evaluate the potential LZC capacity in Greater London; see Appendix D .

• PV: Total potential coverage is based on the total available roof area, incorporating reduction factors for overshading, competing services, and conservation areas.

• SHW: Assumed to be suitable for flat roofs and south, south-east or south-west facing pitched roofs. For suitable domestic properties meeting these criteria, potential heat generation is based on a standard assumed installation size. For suitable non-domestic properties, it is assumed that systems will be sized to meet 50% of the hot water requirements.

• ASHPs: Assumed to be suitable for dwellings with an EER rating of ‘C’ or above and 50% of non-domestic properties.

• GSHPs: Assumed to be suitable for houses with an EER rating of ‘C’ or above, 5% of commercial properties and 40% of industrial properties. The total capacity is then based on the number of suitable buildings of different use categories, and assumes a standard installation size. The actual number is highly dependent on ground conditions, detailed engineering assessments and subject to Environment Agency approval; therefore, the figures are indicative only.

• WSHPs: As for GSHPs, the actual size of any WSHP in the Thames would be limited due to the risk to the environment of changing the river temperature, among other considerations. Although a detailed feasibility assessment has not been carried out, it is considered that a WSHP of around 2-3MW might be acceptable on the basis that there is currently a 2.3 MW installation at Kingston-Upon-Thames.23

Note: This renewable energy assessment is limited to technologies that are already in common use in the UK. There are a variety of alternative technologies which could potentially deliver CO2 savings, but are not widely available at present and have not been assessed. These include transparent façade-mounted PV systems, hydrogen gas grid and/or fuel cells, and carbon capture and storage (CCS).

The maximum potential LZC capacity for the City of London, based on these assumptions, is shown in Table 7.

23 https://heating.mitsubishielectric.co.uk/KnowledgeBase/Public/kingston_case_study.pdf

https://heating.mitsubishielectric.co.uk/KnowledgeBase/Public/kingston_case_study.pdf



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Table 7. Maximum potential LZC capacity

*Results shown for PV do not account for SHW installations.

To put these results into context, consider that, on this basis, the 1.44 MW of PV that is currently installed (see Section 4.3) equates to roughly 2% of the potential PV capacity, indicating that there is significant opportunity for expansion. However, due to the high demands and relatively small roof area, it is estimated that PV and SHW would only be able to meet a small proportion (2-3%) of the current electricity and/or hot water requirements.

This can be seen in Table 8, which shows the current estimated demand for heating, (non-heat) electricity, and hot water in the City, compared with the energy that could be supplied by maximising installation of heat pumps and solar technologies. These figures are rough estimates and are intended only to provide a sense of scale. The actual energy generated by LZC technologies is highly dependent on the location, condition, operation and other factors, an assessment of which would be beyond the scope of this report.

Table 8. Estimated proportion of 2015 energy demands that could be met by maximising LZCs (%)

These results indicate that opportunities for renewable energy generation within the City are limited. A small portion of electricity and/or hot water demands could be met by installing PV or SHW panels on all suitable roof areas, reducing CO2 emissions by around 2% compared with 2015 levels.

In principle, heat pumps could be installed in all new builds and eventually meet up to 100% of the City’s heat demand; this is discussed in more detail in Section 7.8.2.

It is clear that, in order to become a Zero Carbon City, energy demand would need to be minimised, and any remaining energy demand would need to be met using energy efficient technologies such as heat pumps or district heat networks, which must eventually use zero carbon fuels.

The inevitable impact of electricity grid decarbonisation is that the carbon savings from technologies that displace grid electricity will be reduced. This will make ground source heat pumps and air source heat pumps (that use mains power to ‘extract’ heat from local ambient heat sources, usually displacing gas heating fuel) more attractive as their net carbon emissions fall. Conversely, the carbon savings of

Potential savings from PV:

2%

depending on electricity grid decarbonisation



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combined heat and power (CHP), photovoltaics (PV) and fuel cells (that generate power locally, displacing grid electricity) will reduce, making them less cost efficient options for cutting emissions.

7.8.2 Heat pumps

Due to the difficulty of decarbonising the gas grid, it is likely that a large-scale shift towards electric heating will become necessary in order to meet the UK’s CO2 reduction targets. The 2017 National Grid Future Energy Scenarios (2017) report, which is based on a range of assumptions relating to economic growth, fuel prices, and consumer behaviour, suggests that the number of heat pumps in the UK by 2050 could increase by a factor of tens or hundreds in the coming decades.24

To demonstrate the potential impact that this would have on the City of London, a rough calculation was performed to estimate the change in gas and electricity consumption and resulting CO2 emissions if 100% of 2015 heat demand was met with ASHPs. In reality there are various buildings within the City that would not be expected to switch (i.e. those connected to Citigen or GSHPs), so this is intended only to provide a high-level assessment of the potential impacts, implications, and risks.

Assuming that heat demand accounted for 100% of gas consumption and about 11% of electricity consumption in 2015, this could be met with around 266 GWh of electricity per year using ASHPs. Total emissions for heat would decrease from roughly 212 ktCO2 per year to around 92 ktCO2, a 14% reduction compared with 2015 levels. The actual saving would depend on the grid emissions for electricity; with higher levels of decarbonisation, this could be more than a 20% saving.

As stated above, this scenario is not considered likely; however, it indicates that:

• The actual level of CO2 reduction will be subject to high levels of uncertainty related to the rate of electricity grid decarbonisation. In terms of the goal of becoming a zero emission city by 2050, this represents a significant risk which would need to be mitigated by:

─ Minimising electricity demand through other means, e.g. maximising renewable electricity generation and implementing behaviour change measures; and

─ Ensuring that alternative CO2 reduction measures are implemented as a back-up plan.

• Increasing electricity use will place additional demands on the grid infrastructure. Capacity issues may also arise from the increased use of EVs which will need to be taken into account in any discussions with network providers.

7.8.3 District heating networks

On the basis of AECOM’s experience in delivering heat networks, it is estimated that connecting to gas-fired CHP networks generally offers a roughly 20% reduction in CO2 emissions from heat compared with the use of individual heating systems due to the use of secondary heat.

Based on the estimated split of end uses described in Section 4.1.2, space heating and hot water accounted for around 22% of overall CO2 emissions in 2015, so connecting all buildings to heat networks would reduce CO2 emissions by roughly 4% compared with individual gas or electric systems. If all buildings were served by heat pumps, which offer around a 14% saving (see Section 7.8.2), then heat networks would be expected to deliver around 17% in savings. This estimate does not account for cost or technical feasibility.

There are various heat networks currently in operation in Greater London and many of these, including Citigen, incorporate gas-fired CHP engines. As stated previously, the CO2 emissions savings associated with the use of gas-fired heat networks will decrease as the electricity grid decarbonises, even though these are likely to play a role in the short to medium term.

24 Based on National Grid Future Energy Scenarios (2017) ‘Table HT1: Installed low carbon heating technologies in Two Degrees’ (2017) Available at: http://fes.nationalgrid.com/fes-document/fes-2017/

Potential savings from DHNs:

4-17%

compared to individual heating systems

Potential savings from heat pumps:

Around 14%

depending on electricity grid decarbonisation

http://fes.nationalgrid.com/fes-document/fes-2017/



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Eventually, the Committee on Climate Change suggests that, ‘gas-fired combined heat and power (CHP) will […] become incompatible with national carbon budgets.’ 25 Therefore, it is important to consider how developments can achieve compatibility with alternative fuel systems. If and when the use of gas CHPs is phased out, sources of waste heat could include heat recovery from the Tube or other opportunities to link buildings with complementary heating and cooling demands.

7.8.4 Other sample measures

Below are some sample policy measures designed to target specific energy demand end uses that were discussed during the Zero Emission City workshop.

Rough estimates of the potential impact on CO2 have been made by proportionally reducing the fuel consumption in each category and then recalculating the CO2 emissions using current fuel emission factors.

These are derived from the baseline fuel consumption and CO2 emissions estimates provided in Section 4, which are taken from BEIS statistics, along with estimates of the split of energy end uses in buildings, as described in Section 5.2. These estimates do not account for other interactions (e.g. increases in other journeys following private car restrictions). They are illustrative and do not represent the likely outcome of any specific policy.

7.8.4.1 Implement travel restriction e.g. prohibit cars, taxis and motorcycles

As shown in Section 4, cars, taxis and motorcycles combined account for roughly 4% of total CO2 emissions. Assuming that journeys are evenly distributed throughout the week, and using current fuel emission factors for electricity, if these vehicles were only permitted to enter the City on weekends (i.e. two days in seven, a 71% reduction), this would equate to a save around 23 ktCO2 per year, or around 3% of total emissions.

During the Zero Emissions City stakeholder workshop, this measure was suggested and the following points were raised:

• Noted that most vehicles operating in the City have come from outside the City and therefore likely to have been charged previously therefore raising the question as to whether a high level of charging points are required.

• The City would like to reduce the number of vehicles overall.

• Time deliveries are often difficult for construction projects operating on restricted sites.

• The City already has policies in place for minimising engine idling and this extends to construction sites.

• Most of the waste collection is through private contracts therefore potentially more collection vehicles operating in the City than required. Better coordination between sites would be of benefit. The same is true of delivery vehicles. The City has addressed street congestion by ensuring that new developments have off street loading zones.

• Recognised opportunities for restricting emissions on private hire and taxi services, the benefits of which go beyond the City boundary.

• Stakeholders raised the option of new smart road pricing systems designed to address congestion, air quality and CO2 emissions.

7.8.4.2 10% reduction in energy demand for appliances

Although the use of electrical appliances has increased over the past few decades, conceivably the use of smart energy management tools, along with awareness and monitoring campaigns could help to reduce demand.

As shown in Section 5.2, based on estimates of the building stock profile and bespoke benchmarks, it is estimated that around 46% of electricity used in the City is for appliances (including IT), equating to roughly 38% of overall CO2 emissions. On this basis, every 10% reduction in electricity use for appliances would save roughly 30 ktCO2 per year, or 3.5% of total emissions.

During the Zero Emissions City workshop, this measure was suggested and the following points were raised:

25 https://www.theccc.org.uk/wp-content/uploads/2012/05/LA-Report_summary.pdf

https://www.theccc.org.uk/wp-content/uploads/2012/05/LA-Report_summary.pdf



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• In general there is a preference for measures that do not require users to change their behaviour (e.g. applications that optimise the use of appliances).

• It was acknowledged that campaigns such as those promoting recycling have been successful and perhaps something similar could be replicated for reducing use of appliances.

• The idea of best practice networks for sharing ideas and monitoring results was raised by several participants and the response was positive.

7.8.4.3 Lights off between midnight and 5am

At present, it is estimated that lighting may account for around 24% of total electricity demands and 20% of total CO2 emissions. In this sample scenario, it is assumed that turning the lights off between midnight and 5am would equate to a 5/24ths reduction in lighting demand, approximately 20%. This would save around 32 ktCO2 per year, which is just under 4% of total emissions.

During the Zero Emissions City workshop, this measure was suggested and the following points were raised:

• Residents would necessarily be exempt from any such policy; it could only be implemented in empty buildings or rooms.

• Some activities, such as trading, take place on a 24/7 schedule and these sectors would be negatively affected.

• It was thought that modern low-energy lighting and sensors/controls are already in common use as they are seen as cost-effective measures, and achieving further reductions in lighting demand may be difficult once these technologies reach saturation point.

7.8.4.4 Reduce heating demands

There are several ways to reduce heating demand which do not have a negative impact on occupant comfort.

• Turning down thermostats by 1-2 ºC can reduce heating fuel consumption, and it is considered an ‘easy win’ by the Energy Saving Trust.26 A rough estimate of the potential impact can be made by considering degree days and average set temperatures, which suggests that lowering thermostats from 19 ºC to 18 ºC would reduce space heating demand by around 10%.

• A study carried out by the Cambridge Architectural Research group on behalf of DECC in 2012 found that domestic properties could potentially reduce heating demands by 5-6% by reducing the length of the heating season.27

Depending on the usage and occupancy patterns of each building, a greater or lesser proportion of space heating demands may be met through internal gains (e.g. IT systems). Where internal gains meet a higher proportion of demands, the actual savings achieved by these measures may be considerably lower. Therefore, as a conservative estimate, we have assumed that heating demands could realistically be reduced by up to 5%.

Based on the split of energy end uses described in Section 5.2, heating is estimated as roughly 15% of total CO2 emissions in 2015, so a 5% reduction in heating demands represents less than a 1% decrease in CO2 emissions.

26 http://www.energysavingtrust.org.uk/home-energy-efficiency/energy-saving-quick-wins 27 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/128720/6923-how-much-energy-could-be-saved-by-making-small-cha.pdf

http://www.energysavingtrust.org.uk/home-energy-efficiency/energy-saving-quick-wins

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/128720/6923-how-much-energy-could-be-saved-by-making-small-cha.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/128720/6923-how-much-energy-could-be-saved-by-making-small-cha.pdf



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7.9 Summary

A summary of the opportunities discussed above is set out in Table 9, including national, regional and City of London measures. Percentages indicate the potential improvement against the current baseline levels (using 2015 data).

Table 9. Summary of individual impacts of CO2 saving measures

Description Potential % change in CO2 emissions compared with 2015 levels 50% of existing refurbished to Part L 2013 standard Up to 11% Uptake of renewable fuel vehicles Up to 7% Electricity grid decarbonisation Up to 76% Maximum PV uptake 2% District heating networks Up to 17% Heat pumps Up to 14% Private vehicles restricted to weekends only Up to 3% Decrease appliance use by 10% Around 3-4% ‘Lights off’ policy from midnight to 5am Around 3-4% Lowering thermostat temperatures by 1-2 ºC Around 5% Future changes that are considered likely to occur, but have not been assessed quantitatively include: Gas grid decarbonisation; smart energy management; battery storage; changing energy efficiency standards (e.g. Building Regulations, GLA policy, MEES); and supporting carbon reductions through awareness and training.

The next section will discuss the cumulative impacts of these changes under two CO2 reduction scenarios, based on a set of measures agreed with the City of London Corporation.



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8. Looking ahead to 2050: The pathway to zero carbon In the previous sections, it was shown that some CO2 reduction is likely to result from changes that are likely occur between now and 2050, with and without action from the City of London or local stakeholders. However, due to the high energy demands in the City and limited opportunities to generate renewable energy onsite, it is clear that there will still be a shortfall against the zero carbon target that would need to be addressed through CO2 offsetting measures.

The key question then becomes, how much offsetting will be required? A range of scenarios have been modelled to provide an estimate of the potential scale of intervention that might be necessary and identify key sensitivities.

8.1 Scenarios modelled

Note that the following scenarios are illustrative, not predictive, and are intended only to illustrate the range of uncertainty in order to help inform recommendations for CoL.

4 ‘No change’ – this scenario assumes that the only change in CO2 emissions is an increase in CO2 due to new development, with no CO2 reduction measures.

5 ‘Realistic’ – this scenario takes a cautious view of potential decarbonisation measures, with relatively easy wins such as PV installations and other changes taking place in line with recent trends.

6 ‘Accelerated’ – this scenario considers the effect of fully implementing policies or stated governmental aspirations relating to CO2 reduction, through measures such as refurbishing the entire building stock, covering all suitable roof area in PV, banning traditional fuel vehicles and decarbonising the gas grid.

8.2 Results and discussion

Note: The results presented in this report are modelled estimates which incorporate a wide variety of assumptions. They can be used to provide additional context and background to policy discussions but are not intended to predict actual fuel consumption or CO2 emissions.



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8.2.1 ‘No change’ path to zero carbon by 2050

Results of the ‘No change’ scenario are presented in Section 6.

8.2.2 ‘Realistic’ path to zero carbon by 2050

Key changes are summarised in Table 10 below. In the ‘Realistic’ scenario, gas demand in buildings decreases by 66% and electricity demand increases by 25% relative to 2015 levels. This is affected by the decreased use of gas for heating, due to energy efficiency and refurbishment of the existing stock. Gas demand also decreases, and electricity demand increases, due to buildings switching to electrically-powered heat pumps and the use of district heat networks. Diesel and petrol are phased out entirely by 2050 and replaced with biofuel and electricity. Overall, road transport fuel consumption decreases due to the BEIS projected downward trend in demand, the use of more efficient electric vehicles, and fewer journeys. Diesel consumption shows a disproportionally large drop as it is assumed that diesel cars will switch to EV rather than biofuels.

Table 10. Fuel consumption in the 'Realistic' pathway to 2050

Based on these assumptions, the CO2 emissions trajectory is shown in Figure 20. The graph shows the impact of several measures, applied sequentially. It can be seen that the refurbishment of the existing stock has a considerable impact and reduces annual emissions by around 10% compared with the ‘No change’ scenario; the impact of all other measures combined has less of an impact in relative terms.

Figure 20. ‘Realistic’ pathway to 2050, no electricity grid decarbonisation



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This pathway would result in an approximately 3% reduction compared with 2015 levels, with an annual shortfall of around 833 ktCO2 against the zero carbon target. For context, in order to offset this amount the City would need to build a roughly 3,000 MW solar farm (nearly 3,000 times larger than the one on Blackfriars Bridge or fifty times bigger than the UK’s current largest array).28 The cumulative CO2 emissions for the City through the year 2050 would be approximately 29,735 ktCO2 in total. Change compared to…

1990 Change compared to… 2015



To illustrate the scale of impacts from electricity grid decarbonisation Figure 21 shows the same trajectory assuming that the electricity grid decarbonises at a rate of around 2.5% per year, in line with recent trends.

Figure 21. ‘Realistic’ pathway to 2050, including electricity grid decarbonisation at 2.5% per year

In this scenario, annual emissions would decrease by around 56% compared with 2015 levels, which is over 15 times more than the roughly 3% decrease achieved without grid decarbonisation. Cumulative emissions over this period would be around 20,885 ktCO2.





28 https://www.thisiseco.co.uk/news_and_blog/ecos-solar-farm-is-now-biggest-in-the-uk.html

https://www.thisiseco.co.uk/news_and_blog/ecos-solar-farm-is-now-biggest-in-the-uk.html



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8.2.3 ‘Accelerated’ path to zero carbon

Table 11 below presents the change in fuel consumption under the ‘Accelerated’ scenario. In this analysis, the use of gas is phased out almost entirely and decreases by 95% overall due to uptake of low carbon heating systems and energy efficiency refurbishment. It is assumed that heat networks transition from primarily using gas-fired CHP systems to using electrically-driven heat pumps. Electricity use in existing buildings decreases slightly, primarily as a result of the decrease in lighting energy and a further 5% saving due to behaviour change and management. New buildings are net zero carbon for all regulated energy uses. New buildings also nearly all utilise electrically powered heat pumps (although a small proportion of all buildings would remain connected to gas-fired heat networks) and this would contribute to a 15% increase in total electricity demand for buildings.

Table 11. Fuel consumption in the ‘Accelerated’ pathway to 2050

The CO2 emissions trajectory for the ‘Accelerated’ scenario is shown in Figure 22. As in the ‘Realistic’ scenario, there is an initial drop in emissions due to refurbishment of the existing stock. (Note that, in this analysis, once the refurbishment cycle is complete it is assumed that there are no further fabric upgrades, and therefore all of the improvement is seen in the first 10 years, whereas in reality further improvements may be possible.)

Figure 22. ‘Accelerated’ pathway to 2050, no electricity grid decarbonisation



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The ‘Accelerated’ pathway assumes that there is a 3MW heat pump installed in the Thames (listed under ‘Offsite LZCs’ to distinguish it from building-mounted or ‘Onsite LZCs’). Its impact is not visible on the chart above because it has a very small effect, saving around 6-7 ktCO2 per year once installed.

These changes result in an overall 27% decrease in emissions compared with 2015 levels. The cumulative emissions through the year 2050 would be approximately 24,456 ktCO2. (Although the annual road transport fuel consumption is the same as in the ‘Realistic’ scenario, there are lower cumulative CO2 emissions by 2050 partly because the transition to low emission vehicles happens more quickly.)




‘Accelerated’ scenario 65% decrease 27% decrease 630 ktCO2

Figure 22 shows the same trajectory assuming that the electricity grid decarbonises in line with the IAG grid average projections.

One notable difference here is that the uptake of low carbon technologies – specifically, the large-scale shift from gas boilers to electric heat pumps – can be seen to make a significant difference to total emissions. By contrast, in the ‘Accelerated’ scenario above which excludes electricity grid decarbonisation, uptake of heat pumps appears to be a relatively neutral measure due to the higher emission from electricity. This highlights a key risk of the selected approach: as electricity becomes an even higher proportion of total fuel consumption, the trajectory to zero carbon becomes more sensitive to changes in electricity grid emissions.

Figure 23. ‘Accelerated’ pathway to 2050, including electricity grid decarbonisation

In this scenario the remaining annual shortfall would be around 64 ktCO2, a 93% decrease compared with 2015.




‘Accelerated’ scenario 96% decrease 93% decrease 64 ktCO2

Unfortunately, because the savings from LZCs are measured by the amount of grid electricity (or gas) that they displace, as the grid decarbonises, it becomes more difficult to offset CO2 emissions. The result is that, in order to offset the remaining 64 ktCO2 the City would still need to build the equivalent of a 2,850 MW solar farm, or 450 large-scale wind turbines, or plant 100,000 trees per year.



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Tree planting, solar farms and large-scale wind have merely been used as examples to provide context for the scale of offsetting that would be required. There are other options that the CoL and stakeholders could consider, such as:

• Requiring individuals or organisations to contribute to additional offsetting measures, which would potentially involve other authorities outside of the planning system

• Replacing any remaining gas with biofuels, hydrogen gas or other alternatives. In future it is possible that new technologies would emerge that would make this more feasible.

• Implementing additional policies for behaviour change, e.g. a mandatory lights out policy.

These measures would require further research and consultation to confirm which would be acceptable and how they would be implemented, and this should form part of a comprehensive plan for carbon offsetting.

8.3 Summary

Three scenarios were developed in the model to test the impacts of various national and regional trends and potential CO2 reduction measures. The results from these scenarios are shown in the table and graph below:

Figure 24. Range of potential CO2 trajectories based on the scenarios modelled

Change compared to 1990 Change compared to 2015


‘No change’ scenario 46% decrease 14% increase 983 ktCO2

‘Realistic’ scenario No grid decarbonisation

54% decrease 3% decrease 833 ktCO2

‘Realistic’ scenario With decarbonisation


‘Accelerated’ scenario No grid decarbonisation


‘Accelerated’ scenario With decarbonisation


This work highlights that there is significant uncertainty in the trajectory to 2050, which is primarily affected by the rate of electricity grid decarbonisation. It also shows that there will be significant challenges both in reducing energy demands and in offsetting any remaining CO2 emissions.



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8.4 Note: The impacts of climate change on energy demands

Several studies29,30 have been carried out to assess the potential impacts of climate change on cooling demand in the UK and Europe. It is generally agreed that cooling demand would increase, and that there would be greater uptake of comfort cooling technologies. However, in some instances the increase in energy consumption and/or carbon emissions from cooling is offset over the course of the year by a corresponding decrease in heating demands. This relationship depends on both the climate and type of building, among other factors.

Energy use within the City of London is unique compared with the rest of the UK, having higher-than-average electricity use (including greater use of appliances, IT equipment, cooling, and lighting). Therefore, it is difficult to assess the potential impacts of climate change using benchmarks or studies that present more UK average data.

Climate scenarios for 2050 and 2015 were used to enable a comparison of the energy demands and CO2 emissions. These use design weather years from the PROMETHEUS project31 which are based on UK Climate Projections (UKCP09) for the 2050s.32

In order to assess the impacts of climate change on its own, the model was set to implement no CO2 reduction measures other than refurbishment of the existing building stock. In this analysis, based on current emissions for grid electricity, the 2050 ‘High’ scenario resulted in roughly 6% higher annual CO2 emissions by 2050 than there would be in the current climate, as shown in Figure 25. As noted in Section 5.2, cooling is estimated to account for at least 9% of total electricity consumption as of 2015, or around 7% of CO2 emissions, so this is roughly equivalent to double the current cooling demand. With electricity grid decarbonisation however, this difference becomes much smaller.

Figure 25. Annual City of London CO2 emissions with refurbishment of the existing stock, comparing 2015 and 2050 'High' climate scenarios (ktCO2 per year)

Note that:

• Chillers and cooling technologies are much more efficient than heating technologies, with high-performance chillers achieving COPs of up to 8, compared with 91% for efficient gas boilers. This means that changes in cooling demand have a relatively small impact compared with changes in space heating demand.

29 JRC Science for Policy report by the European Commission, ‘Assessment of the impact of climate change on residential energy demand for heating and cooling’ (2018) 30 Aebischer, B., Catenazzi, G., Jacob, M. and Henderson, G. (2007) ‘Impact of climate change on thermal comfort, heating and cooling energy demand in Europe’ 31 Eames M., Kershaw T. and Coley D. (2011), 'On the creation of future probabilistic design weather years from UKCP09', BSERT, 32 127-142 32 For further information, see http://ukclimateprojections.metoffice.gov.uk/21678

http://ukclimateprojections.metoffice.gov.uk/21678



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• Over time the average performance of cooling systems is likely to increase, which could partially offset the increase in cooling demands.

• The model does not account for changes in uptake of heating technologies which relate to consumer behaviour, so the trajectory may be more sensitive to changes in climate than the model suggests.

Despite this uncertainty, it remains the case that cooling demands would be supplied by electricity, so any increase would further contribute to the sensitivity that relates to electricity grid decarbonisation. Implications include:

• Need to prioritise passive cooling measures.

• Building-mounted PV should be promoted because power generation from solar panels would tend to correspond with hotter days and higher cooling demands.

• Peak electricity demands would increase which should be taken into account along with higher demands from electric vehicles.

• Technologies that allow interseasonal thermal storage should be considered.

• Separate to CO2 emissions, it should be noted that chemical refrigerants may be harmful to the environment which may become a higher priority in terms of building sustainability in general.



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9. Conclusions and recommendations

9.1 Conclusions

Based on the results of the analysis described in the previous sections of this report, the following conclusions have been drawn on the Corporation’s ambitions to achieve its Zero Carbon target by 2050:

─ Significant decarbonisation of the UK electricity supply will be crucial to meeting the Corporation’s Zero Carbon target;

─ The anticipated move away from the use of gas-boiler based heating systems will have a significant impact on CO2 emissions and energy infrastructure in the City;

─ The anticipated switch to non-fossil fuel based transport will have significant implications for CO2 emissions and energy infrastructure;

─ Proposed new development will increase the energy demands within the City and therefore design standards need to ensure that all new development reduced energy demands and CO2 emissions as much as possible;

─ Significant efforts will need to be made by the City of London Corporation and key stakeholders in the City to realise the Zero Carbon target;

─ The City of London has different energy demands to other parts of London and the UK and therefore requires a specific set of interventions to deliver the required carbon saving;

─ The City of London Corporation has a range of opportunities for taking local actions to reduce CO2 emissions; and

─ Offsite measures are likely to be required to meet the Zero Carbon target.

These conclusions are discussed in more detail over the following pages.

9.1.1 Significant decarbonisation of the UK electricity supply will be crucial to meeting the Corporation’s Zero Carbon target

As the results of the analysis presented in the previous sections show, the most significant contribution to carbon reductions in all scenarios of the modelling will arise from the decarbonisation of electricity supplied to the City via the national grid. However, this also means that much of the reliance on achieving the Corporation’s ambition of delivering a Zero Carbon target within the City of London depends upon the Government delivering its targets on grid decarbonisation.

To date, the decarbonisation of the national grid has been primarily achieved through the significant reduction in the use of coal fired power stations and the increase in the use of renewable technologies, particularly large scale wind and also biomass (where it is used for co-firing in power stations). However, future decarbonisation is anticipated to be much more difficult to achieve as the use of gas remains a significant component of the generation mix and the timely replacement of the existing nuclear fleet is already proving to be challenging. Furthermore, significant additional pressures on electricity demand from the use of electricity to provide heating and power vehicles will lead to greater pressures on electricity infrastructure and may incentivise firm power generation from fossil fuel sources such as gas to deal with greater peaks in demand.

This uncertainty provides the greatest risk to the City of London Corporation in meeting its Zero Carbon target. As shown in the scenario testing, where different trajectories of grid decarbonisation were assessed, the carbon savings under different projections were significant, with those assuming a slower or shallower decarbonisation showing a much greater shortfall to the Zero Carbon target by 2050. To address and mitigate this, consideration needs to be given to how the Corporation can best facilitate the government’s objectives in decarbonising the grid as well as what measures it can take to best insulate itself from the eventuality that grid decarbonisation does not happen as quickly and/or as deeply as the government intends. Opportunities to address both of these issues are discussed in the next section.



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9.1.2 The anticipated move away from the use of gas-boiler based heating systems will have a significant impact on CO2 emissions and energy infrastructure in the City

Linked to the discussion above, the Government has signalled in the Clean Growth Strategy that over the coming decades it intends to phase out the use of natural gas to provide heating. This step has also been identified in the GLA’s London Environment Strategy.

The proposals for replacing the use of natural gas for heating are threefold: a move to electric heating, connection to low carbon heat networks and the repurposing of the gas grid to a cleaner fuel. The London Environment Strategy indicates that in London electric heating, using heat pumps and connection to heat networks are likely to be the most appropriate solutions. In regards to heat networks, the GLA strategy also signals that these are likely to move towards deriving more heat from secondary sources, such as waste heat from buildings, sewers etc., as well as ground and water sources, all of which would require the use of heat pump technologies and therefore electrical power to provide the required temperatures for delivering space heating and hot water to connected buildings.

However, a significant increase in the use of heat pumps for providing heat to buildings within the City of London will have a number of significant consequences. Firstly it will result in an even greater proportion of the City’s energy demands being based on electricity. As described in the previous section, this places an even greater reliance on the decarbonisation of that electricity to reduce CO2 emissions. Secondly, this will place significant pressures on electricity supply within the city, particularly as the peak demands for heating are so much greater than those for electricity, which will require investment to upgrade the distribution infrastructure. Thirdly, the replacement of heating systems across all buildings in the City, a likely requirement for these systems to operate efficiently with heat pump technologies, will have significant capital cost implications for buildings across the City.

The Corporation, together with key stakeholders, can have an important role in supporting this transition and addressing these impacts. A co-ordinated City-wide solution to these issues would be most cost effective, in terms of both capital and operational costs, as well as enabling the use of more efficient and effective technologies, delivering higher CO2 reductions and better management of pressures on the City’s utilities, than individual building-led solutions. However this will require co-ordinated action by multiple stakeholders, which the City of London Corporation is uniquely placed to facilitate.

9.1.3 The anticipated switch to non-fossil fuel based transport will have significant implications for CO2 emissions and energy infrastructure

In addition to the switch of heating fuels, the Government’s Clean Growth Strategy has signalled that there will be a shift away from the use of fossil fuels in vehicles in the coming decades, to address both climate change and air quality targets. Again this move is supported and reiterated in the GLA’s Environment Strategy.

The results of the modelling show that this will have an impact on the future trajectory of the City’s emissions although, as transport emissions make up only a small component of the overall CO2 emissions, the impact is less significant than other areas.

However, as with the changes in building heating systems, there will be significant implications associated with the infrastructure required to facilitate this change, specifically the installation of charging points for vehicles, in both private and public locations as well as the infrastructure that will be required to provide the power to these.

In this area, as in others, the City of London Corporation could show leadership by increasing the number of charging points available on its estate as well as investing in zero-emission vehicles to replace those that it operates. We understand that measures to do this are already underway with the investment in a number of charging points at Corporation-owned car parks with a watching brief to assess usage that will inform further investment. To encourage similar investment from other stakeholders in the City, the Corporation could provide guidance and support on the uptake of zero-emission vehicles and charging points. It should be noted however that in the stakeholder workshop some delegates suggested that charging points are currently unpopular and may not be necessary be required in the City due to the likelihood that vehicles would be charged elsewhere and as such care will therefore need to be taken to address these concerns.

Some part of the transport sector will be harder to address than others, in particular larger commercial vehicles and HGVs may take longer to convert to low carbon alternatives. Given the significant amount of proposed new development there is likely to be a significant amount of construction traffic into the City in the coming years. Also, the increase in commercial floorspace that this development will lead to is likely to increase commercial vehicle



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traffic within the City. Solutions to reduce the CO2 emissions and air quality associated with this commercial and HGV traffic should be investigated, working with TfL and other key stakeholders to identify potential solutions.

9.1.4 Proposed new development will increase the energy demands within the city and therefore mitigation measures should be promoted and enforced through planning policy

There are plans for significant development within the City of London over the next decade, including a significant increase in commercial floorspace and a significant number of new domestic properties. The results of our analysis show that this will have a significant impact on energy consumption. The ‘Business as Usual’ approach, which ignores the future decarbonisation of the national grid, shows that if unchecked this could increase the CO2 emissions, even if other local measures were in place.

The analysis shows the importance of ensuring that all new development within the City is designed and delivered in a way that reduces energy consumption and CO2 emissions. Critical to achieving this will be the implementation of very high fabric and energy efficiency standards, the use of low carbon heating systems and renewable energy generation technologies and, over time, the increasing use of smart energy management systems and storage.

The London Plan provides a strong basis for delivering high performance in new development and is likely to be strengthened by the proposals in the Draft New London Plan. The Corporation should seek to ensure that new developments meet these requirements, particularly with regard to the minimum fabric standards, heat and cooling hierarchies and the on-site CO2 reduction target.

The Corporation could provide further initiative by seeking to ensure that developments deliver good performance in practice. The industry has long been aware of the performance gap between the design energy performance and the operational energy performance of buildings. Requiring developments to monitor energy performance in operation would help to force developers to address the performance gap. Also alternative design approaches and modelling, such as Passivhaus and CIBSE TM54, could be encouraged to better understand and design for operational performance.

9.1.5 Significant additional measures will be required by the City of London and key stakeholders to deliver further CO2 reductions

Despite the anticipated CO2 savings that are predicted to be delivered by measures taken by national government and the GLA, the results from the modelling suggest that under all scenarios significant further measures required by the Corporation and key stakeholders at the local level to deliver the Zero Carbon ambitions.

Even under the scenarios that assumed the highest levels of decarbonisation of the national grid combined with highest take-up rates of electric heating and vehicles, further local savings were needed to get close to the Zero Carbon target. Under scenarios that assumed lower levels of decarbonisation of the national grid and lower take-up rates of electrical heating and vehicles, the local savings required were even more significant, showing the importance of local action by the Corporation and key stakeholders.

9.1.6 The City of London has different energy demands to other parts of London and the UK and therefore requires a specific set of interventions to deliver the required carbon savings.

As shown in the existing energy demand assessment, the energy demands within the City of London are primarily derived from the use of electricity in commercial buildings. By contrast with other London boroughs, CO2 emissions from the use of gas, and emissions derived from the residential sector and from transport are relatively insignificant.

As a result the measures that are likely to have the most significant impact on reducing energy consumption and CO2 emissions are likely to differ from other locations, thereby requiring a bespoke response focussing primarily on energy efficiency associated with power consumption in the non-residential building stock.

9.1.7 The City of London Corporation has a range of opportunities for taking local action to reduce CO2 emissions

This study has demonstrated that there are a number of opportunities for the Corporation to deliver significant CO2 reductions through actions it can either directly deliver or indirectly influence at the local level, working with key



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stakeholders in the City. The results also show that the relative importance of the local actions also heavily depends on the success of measures delivered at the national or London-level.

Direct actions include addressing the energy consumption and CO2 emissions associated with the Corporation’s own assets, primarily the buildings that it owns and operates. The Corporation can also have a significant impact through its role as the planning authority. The forthcoming new local plan, City Plan 2036, provides a significant opportunity to include policy to enforce, enable and encourage some of the measures identified in this report to deliver low carbon energy infrastructure within new and existing buildings and public realm.

Indirect actions include assessing the indirect CO2 emissions, such as those associated with suppliers, and the support that it can provide to key stakeholders in the City. This support could include measures to encourage the improvement of existing buildings, installation of low carbon generation, smart systems and storage as well as the connection to low carbon heating systems. Support could take the form of stakeholder forums, guidance documents, reductions in business rates to incentivise investment, capital support for specific projects or bulk-purchase schemes.

9.1.8 Offsite measures are likely to be required to meet the Zero Carbon vision.

The scenario testing demonstrated that, even with the most optimistic assessment of grid and transport decarbonisation and highest levels of uptake for the local measures, there are likely to be residual CO2 emissions that would need to be offset through measures delivered outside the City of London. The level of offsetting varied significantly and in scenarios with lower levels of electricity and transport decarbonisation the residual CO2 emissions, and therefore offset requirements, were estimated to be significant.

Some example offsite measures, such as PV farms, Wind Turbines and tree planting, were investigated as part of this assessment to provide some context to the level of offsetting required but further work and consultation would be required to identify the most appropriate opportunities as well as the most acceptable approach, taking account of both the type of measures and the location of the projects.

9.2 Recommendations

To address the results and conclusions drawn from this study the following recommendations have been made to assist the Corporation in realising its ambitions to achieve the Zero Carbon target by 2050:

─ The City of London Corporation should take steps to support and respond to the proposed decarbonisation of the national grid;

─ The City of London Corporation should take a proactive role in supporting the forthcoming changes to the City’s energy infrastructure;

─ The City of London Corporation should take steps to support and respond to the proposed decarbonisation of the transport sector;

─ The City of London Corporation should ensure that new development delivered within the City supports progress towards the Zero Carbon target;

─ The City of London Corporation should provide support for heat network development, expansion and decarbonisation;

─ The City of London Corporation should show leadership on improving the existing building stock through measures to reduce CO2 emissions on its own estate;

─ The City of London Corporation should provide support to stakeholders in delivering CO2 savings within their estates;

─ The City of London Corporation should investigate options for delivering off-site CO2 emission reductions to achieve the Zero Carbon vision

─ The City of London Corporation should set up a process to monitor and review CO2 emissions and progress against the recommendations and actions set out in this report to assess progress towards the Zero Carbon target.

These recommendations are discussed in more detail over the following pages.



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9.2.1 The City of London Corporation should take steps to support and respond to the proposed decarbonisation of the national grid

As set out above, the realisation of the Government’s objectives in regards to the decarbonisation of the national grid will be a critical factor in meeting the Corporation’s Zero Carbon aspiration. As a result it is therefore crucial for the Corporation to support the changes that will be required to the electrical infrastructure in the City to meet this target.

Due to the constraints associated with the City of London it is considered unlikely that there will be opportunities for introducing large-scale power generation. However due to the anticipated growth in power demands within the City there is likely to be significant distribution, storage and demand-side management infrastructure required to be installed over the coming decades to support the transition to a decarbonised grid and the greater demands that will be placed upon it.

The key role that the Corporation can play in supporting this transition is likely to be through its role as a planning authority. Providing the spatial requirements to facilitate this future infrastructure will be crucial to the cost-effective and timely delivery of this infrastructure. We would recommend that CoL engages in discussions with UKPN to understand their future plans for future electrical infrastructure within the city and how this could inform planning policy and spatial allocations. Outputs from this study, which have sought to provide an indication of the increase in power demands from the new development and increasing electricity demands for heating and vehicles, may aid these discussions. Spatial information associated with future planning projections is also likely to be useful to these inform this work.

9.2.2 The City of London Corporation should take a proactive role in supporting the changes to the city’s energy infrastructure

As well as presenting a risk to the delivery of the zero carbon vision, the challenges posed by the changes to the energy infrastructure within the city also present a risk to the security of energy supply, require significant investment to upgrade building energy systems and result in higher operational costs associated with increasing energy prices. Ensuring the long-term competitiveness of the City of London is one of the Corporation’s key goals so taking a proactive approach to supporting the delivery of the energy infrastructure needed to address these risks would deliver clear benefits to the Corporation and stakeholders across the City.

If building owners and businesses in the City have to invest in changes to their buildings individually, installing electric heating systems, battery storage and smart controls, then the capital costs are likely to be greater and the resulting systems are less effective than if investment was co-ordinated across the city. For example, if the electrification of heating systems is delivered on a building by building basis, this is likely to result in the deployment of individual air source heat pumps which is likely to be more expensive, to both install and operate, and less efficient (thereby delivering less CO2 savings) than if communal or district heating systems are developed, which can deliver economies of scale and take advantage of larger heat pumps using more effective secondary heat sources to deliver heat with lower CO2 content and lower cost.

We would recommend discussions with UKPN and other stakeholders in this sector to identify projects, trials and investment opportunities that would support decarbonisation and identify specific opportunities for power and heat generation, distribution, smart management and storage that would deliver advantages in regards to security of supply, cost of energy and CO2 savings. If these benefits, with regards to security of supply, capital and operational costs and lifecycle carbon savings, can be quantified and clearly communicated to stakeholders then a case can be made for investment and action. Identifying specific opportunities would also enable funding streams, like the forthcoming Heat Networks Investment Programme, to be accessed.

9.2.3 The City of London Corporation should take steps to support and respond to the proposed decarbonisation of the transport sector

As with the decarbonisation of the national grid, the Corporation will need to support the transport decarbonisation agenda to facilitate the uptake of low carbon vehicles within the City. To achieve this, the Corporation should work with TfL, the GLA, UKPN and other relevant stakeholders to identify specific measures and projects that would support to drive the uptake of low carbon vehicles.

The key measure to stimulate greater uptake of low carbon vehicles is likely to be the deployment of charging points on both public highways and within public and private car parks. CoL is in a position to directly lead on the deployment of charging points in the public highway and can encourage the owners of public and private car parks



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to install charging points on their sites. There is also an opportunity to use the planning process to manage the installation of charging points required as part of new development proposals The GLA has requirements in the London Plan but the Corporation could seek to enhance these requirements to increase the level of charging provision in the city, while also managing the implications for vehicle movement and parking. Given the significant development proposals this could have a significant impact on the number and location of charging points delivered over the next decade.

The Corporation could also demonstrate a leadership role in this transition by replacing vehicles that it owns and working with suppliers to move their fleets towards low emission and electric vehicles. In the first instance the Corporation should review its own vehicle fleet and assess any replacement programmes to identify opportunities for replacing these over time with low emission and electric models. The Corporation could also undertake further work to identify ways to encourage low emission vehicle uptake amongst its suppliers and key stakeholders across the City, identifying those with the largest fleets, to better target this.

9.2.4 The City of London Corporation should ensure that new development delivered within the City supports progress towards the Zero Carbon agenda

To reduce the additional energy demands associated with the new development proposed within the City, the Corporation should ensure that these are designed and delivered to reduce energy demands as much as possible through good fabric design and energy efficiency measures.

The Corporation should use its role as planning authority and the forthcoming City Plan 2036 to ensure that new development meets the requirements of the London Plan, particularly the minimum fabric performance, and where possible support developers to go beyond this. New development will also be crucial in supporting the delivery and expansion of low carbon heat networks within the City and therefore additional requirements and support for developers to fully explore and realise the opportunities for this should be incorporated into planning policy and guidance. Where this requires communication and partnership with other stakeholders, for example to connect to sources of waste heat, the Corporation should provide resources or guidance to help facilitate this otherwise, from experience, opportunities could be missed.

To that end to support this recommendation any new or updated design guides should include guidance on how to optimise the fabric performance and energy efficiency measures, not just in design but also in delivery as there have been a number of studies that have identified the performance gap between the design performance and the as-built performance of new buildings.

9.2.5 The City of London Corporation should provide support for heat network development, expansion and decarbonisation

National government and GLA policy suggests that the move away from gas boilers is likely to lead to the electrification of heat and either the uptake of heat networks or individual heat pumps. Heat networks can offer significant advantages over an individual building solution as they can enable the use of more effective sources of heat that are unlikely to be practically feasible or financial viable at the individual building scale.

To support the development of heat networks in the City, the Corporation should seek to support the development of the Citigen network, including both the expansion and decarbonisation of the heat, cooling and power supplied by the network, as well as the development of other heat networks within the City. This could be achieved through support in the planning process for the connection of new developments to heat networks and the connection of other parts of the Corporation’s estate to networks where this is feasible.

For heat networks to offer benefits, in terms of security of supply, cost and carbon savings, over individual building level heating solutions, which are most likely to deploy air source heat pumps, they will need to be served by secondary heat sources. To support this the Corporation should identify specific opportunities within the City for using secondary heat sources, from the ground, River Thames, waste heat from buildings, the Tube, substations and sewers etc, as well as opportunities for the use of these for heat networks serving new developments and existing buildings. Further support could be provided in planning policy and guidance, including the forthcoming City Plan 2036.

Coordinating the use of secondary heat, which is often derived from 3rd party buildings or infrastructure, on heat networks will require significant co-ordination of a number of stakeholders and is unlikely to happen unless the Corporation provides a supporting role to facilitate discussions.



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9.2.6 The City of London Corporation should show leadership on improving the existing building stock through measures to reduce CO2 emissions on its own estate

In regards to CO2 emissions from existing buildings, the Corporation has a significant direct impact through its own estate. The Corporation should therefore show leadership in this area by seeking to improve existing building efficiencies and move to lower carbon heating systems, the learning from which could then be used to inform guidance and support for other key estate holders.

To achieve this we would recommend that the Corporation undertake a full energy audit of its estate to understand the opportunities for energy reduction, through fabric and energy efficiency measures, as well as the future options for decarbonising heat supplies, either through connection to heat networks or individual heat pumps. Such a process would allow investment to be prioritised and enable the Corporation to demonstrate leadership to other key stakeholders.

9.2.7 The City of London Corporation should provide support to stakeholders in delivering CO2 savings within their estates

Much of the buildings within the City are privately owned and therefore the Corporation will be reliant on other parties improving the existing building stock and operating these buildings efficiently to reduce energy consumption and CO2 emissions. To support building owners the Corporation could provide guidance and potentially offer support through business rate reductions or capital funding support for improvements to building energy efficiency to drive greater uptake, particularly for SMEs which is often the hardest sector to target.

The Corporation could also support and encourage operational energy reductions by promoting behavioural change programmes. By either using existing forums or creating a new forum for building energy managers on key estates across the City, the Corporation could seek to provide guidance for delivering behavioural change programmes aimed at reducing energy demands as well as sharing and pooling expertise and potentially benefiting from initiatives like collective purchasing. Voluntary monitoring and reporting programmes with key estate owners would provide a way of identifying successful interventions that could be shared with other building owners and inform wider campaigns. The Corporation could also consider working with stakeholders to encourage private building owners to undertake and publish Display Energy Certificates (DECs), showing actual energy consumption, which could then be used to create league tables with potential recognition and rewards for the best performing buildings, thereby encouraging improved performance through competition.

9.2.8 The City of London Corporation should investigate options for delivering off-site CO2 emission reductions to achieve the Zero Carbon vision

The results of our analysis suggest that achieving the Zero Carbon vision within the boundary of the City of London is unlikely to be achieved based on our current understanding of national energy infrastructure and decarbonisation trajectories to 2050. As such we anticipate that some offsetting will be required to deliver the Corporation’s Zero Carbon vision.

Some options for offsetting have been incorporated in our analysis for the purpose of providing some context for the scale of measures required to meet the zero carbon target however there will be a variety of potential options. If CoL wants to commit to the Zero Carbon target we would recommend that further investigations are undertaken into the options for carbon reductions outside the City. This analysis should include consideration of where the installations should take place, which could be:

─ On City of London Corporation land within London

─ On City of London Corporation land outside London

─ On other land within London

─ On other land outside London

The analysis should also look at the various options available for projects that would deliver CO2 savings, including energy generation, distribution, management, storage and carbon sequestration. If generation options are pursued then options for power purchase arrangements or Licence Lite could also be reviewed which may offer some direct financial benefit to the Corporation, which could be used to create a rolling fund for investment.



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9.2.9 The City of London Corporation should set up a process to monitor and review CO2

emissions and progress against the recommendations and actions set out in this report to assess progress towards the Zero Carbon target.

We would recommend that the Corporation set up a monitoring process to review progress against the CO2

emission projections. This could be done on an annual basis or, to align with the Committee on Climate Change’s national carbon budgets, be split into 5-year periods.

We would recommend that a monitoring and review process should cover the following:

• Review of annual carbon emission data, using the data published by BEIS33 to track progress year-on-year towards the Zero Carbon target

• Assessment of the progress of national electric decarbonisation, which can be achieved by assessing the carbon factors published annually by BEIS34 against the assumptions used in the modelled scenarios presented in this report.

• Assessment of the uptake of low carbon heating systems (heat pumps and heat networks), which can be achieved by reviewing planning applications for new buildings/change of use and through the national EPC database35.

• Assessment of the uptake of low carbon vehicles, which can be achieved by reviewing data collected by TfL and assessment of the usage of charging points within the city.

• Assessment of the performance of the building stock within the City, using the national EPC database or other national or local surveys.

• Assessment of the CO2 emissions from the Corporation’s own estate, using existing energy and carbon reporting

• Assessment of CO2 emissions from specific projects completed over the year

• Review of actions delivered against the action plan

The results can be assessed against outputs from the model and review the performance against the carbon reduction trajectories identified in the modelled scenarios.

33 https://www.gov.uk/government/collections/uk-local-authority-and-regional-carbon-dioxide-emissions-national-statistics 34 https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2017 35 https://epc.opendatacommunities.org/

https://www.gov.uk/government/collections/uk-local-authority-and-regional-carbon-dioxide-emissions-national-statistics

https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2017

https://epc.opendatacommunities.org/



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10. Action Plan

10.1 Action Plan

The following pages describe a set of proposed actions for CoL that aim to deliver on the recommendations made in the previous section.

The list of proposed actions have been presented with the following information:

─ Reference code

─ Action description – Summary of the proposed action

─ Further details/comments – Any other relevant information or details relating to the proposed action

─ Priority (if applicable) – setting out the relative priority of the proposed action based on the level of CO2 saving that can be achieved and/or the importance towards delivering the vision.

─ Timeframe – Describes the timeframe (short, medium or long-term) during which the proposed action needs to be delivered, either short term (0-6 months), medium term (6-12 months) or long term (1-5 years)..

─ Resource implications – The relative level of resource (either financial or officer time) that CoL would need to commit in order to deliver the proposed action.

─ Stakeholders – The other key stakeholders that would need to be involved in delivering the proposed action

We anticipate that the proposed actions set out over the following pages would each need to be reviewed and agreed by CoL prior to being adopted and taken forward.



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Ref Action Description Priority Timeframe Resource Implication Key Stakeholders

General

GN1 Disseminate the results, conclusions and recommendations of this study within the council.

Send out copies of the report and promote the Zero Carbon City policy to build capacity and support within the council for taking the recommendations and actions from this report forward.

n/a - enabling action

Short term Limited officer time required

Internal

GN2 Disseminate the results, conclusions and recommendations of this study to key stakeholders within the city.

Send out copies of the report and promote the Zero Carbon City policy to build capacity and support in key stakeholder groups for taking the recommendations and actions from this report forward.



UKPN, TfL, GLA, Citigen, Key estate owners, Resident groups etc.

GN3 Identify senior officers and members to champion the programme and key projects

Senior officer and members will be vital in taking forward the recommendations and actions proposed in this report.



Internal

GN4 Establish a means of monitoring and reporting progress against the recommendations and action plan

Set up a monitoring and reporting mechanism to enable progress towards the zero carbon ambition to be assessed over time as well as re-appraising actions and priorities.


Short-Medium term

Officer time required Internal

GN5 Establish roles for delivering the recommendations and actions

The agreed set of actions following on from this study should be allocated to specific officers to ensure responsibility for delivery.


Short term Officer time required Internal

GN6 Work with government and GLA to identify existing and forthcoming funding sources to support further studies and specific projects.

Many of the measures identified in this report will have significant capital cost implications and therefore funding may be required to support their implementation. Any further work to define specific project opportunities should include an analysis of funding options.


Short term Officer time required BEIS, GLA

Energy Infrastructure

EI1 Speak to UKPN about future energy infrastructure plans

CoL should arrange a meeting with UKPN to discuss the plans for future energy infrastructure in the City and how they can support and facilitate this through planning policy and other mechanisms.



UKPN



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EI2 Monitor progress on national decarbonisation

CoL should monitor progress of the decarbonisation of the national grid to understand the implications for meeting the zero carbon target


Medium-Long term

Limited officer time required

Internal

EI3 Support decarbonisation of the national grid through planning policy

CoL should provide support through planning policy for strategic energy infrastructure developments that seek to deliver and support the national decarbonisation target.


Medium-Long term

Limited officer time required

Internal

Heat Networks

HN1 Work with Citigen to explore future development plans

CoL should arrange a series of meetings with Citigen to discuss the plans for expansion and decarbonisation of energy supplies across the network to understand how it can support this through planning policy and other mechanisms.

Medium-High Short term Officer time required to engage in discussions. Potential cost associated with client side technical advice/support.

Citigen

HN2 Review secondary heat opportunities CoL should commission a study to assess the specific opportunities for using secondary heat in heat networks across the city looking at both the potential sources of heat and the new and existing buildings that could be served by this. The study should incorporate spatial, technical and financial analysis to provide sufficient evidence to support planning policy or further investment.

Medium Short term Budget required to commission a study and provide officer resource

Internal

HN3 Planning policy support for heat networks including secondary heat

CoL should strengthen planning policy support for heat networks and the use of secondary heat sources for new developments within City Plan 2036. The strength and detail of this would benefit from the study recommended above.

Medium-High Short term Officer resources required Internal

HN4 Review opportunities for CoL to develop a ‘pipe co’ model (company to finance, deliver and operate the infrastructure to connect heat sources to users)

CoL could undertake a study to investigate the option of creating a heat distribution operator within the City to connect secondary heat sources and heat users.

Low Short term Officer resources required Cost associated with 3rd party technical support for a study

Internal and 3rd parties (to be defined by study)

HN5 CoL to review potential to demonstrate leadership in delivering heat network development through connections to its own buildings

CoL should conduct a survey to assess the potential for connecting additional buildings from its own asset register to heat networks.

Medium Short-Medium term

Officer resources required Cost associated with 3rd party technical support for a study

Internal



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HN5 Identify secondary heat project to develop as a pilot/demonstrator project

Subject to the results of the secondary heat opportunity assessments proposed above, CoL could identify a specific secondary heat project to deliver as a pilot and demonstrator.

Medium Medium-Long term

Significant budget and officer time required to invest in feasibility assessments and potential funding of a project

GLA,

HN6 Review potential to support heat network development in City Plan 2036

CoL to review opportunities for using policies in City Plan 2036 to encourage and facilitate heat network development and expansion


Short term Officer resources required Internal

Transport

TR1 Speak to TfL about future plans to address transport decarbonisation within the city

Arrange a meeting with TfL to discuss the implications of this study and the practical measures that CoL can take to facilitate the uptake of low carbon vehicles

Medium-High Short term Limited officer time required

TfL

TR2 Review potential to support transport decarbonisation agenda through the planning policy.

CoL should take the outputs from discussions with TfL to inform planning policy in the forthcoming City Plan to support the delivery of low carbon vehicle infrastructure

Medium-High Short term Officer resources required Internal

TR3 Review CoL fleet CoL could conduct an audit of its vehicle fleet to assess opportunities for renewal with zero emission alternatives and demonstrate leadership.

Medium Short term (Already in progress)

Officer resources required Internal

TR4 CoL to work with Stakeholders to assess options for increasing uptake of zero emission vehicles

CoL should identify stakeholders in the city with large fleets and/or car parks and work with them to support the investment in charging points and zero emission vehicles

Medium Medium-Long term (Already in progress)


Existing buildings

EB1 CoL estate carbon management plan CoL could commission audits of its assets to understand the potential for delivering carbon emissions to demonstrate leadership in this area.

Medium Short term (Already in progress)

Budget required to commission a study and provide officer resource

Internal



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EB2 Undertake a detailed assessment of the existing building stock within the city

CoL could commission a study to understand the typology and age of buildings to inform more targeted interventions for projects, guidance and funding.

Medium Medium term Budget required to commission a study and provide officer resource

Internal

EB4 Business engagement and support, particularly for SMEs

CoL could provide guidance to SMEs, in the form of forums, presentations, events, training or funding, to deliver energy efficiency improvements.

Medium Medium term Budget required to provide this service as well as officer resource to establish and manage.

Internal plus SMEs

EB5 Consider subsidised energy audits CoL could consider providing subsidised energy audits to support SMEs in identifying energy improvement opportunities.

Low-Medium Medium term Budget required to provide this service as well as officer resource to establish and manage.

Internal

EB6 Investigate the potential to use planning policies to drive energy performance

CoL to consider options introducing policies, such as consequential improvements or minimum EPC ratings, into the City Plan to drive improvements in energy performance where applications for refurbishment or change of use are made.

Medium Short term Officer resources required Internal

EB7 Investigate potential to use business rates to driver energy performance

CoL to consider the option of linking business rates to EPC/DEC ratings, offering a discount for better performing buildings and/or where buildings can demonstrate an improvement through investment in energy efficiency.



EB8 Monitor results of energy efficiency programmes to provide further support

CoL to monitor the performance of energy efficiency programmes Medium Medium-Long term

Officer resources required Owners of large estates in the City

EB9 Consider setting up a local league table of building performance

CoL to work with stakeholders to publish Display Energy Certificates for all large buildings in the City and set up a league table or reward system to encourage competition for best performance.


Officer resources required Owners of large estates in the City

New Buildings

NB1 Work with developers to provide support and guidance to deliver higher standards

CoL to provide better support to developers to encourage the High Medium term Officer resources required Internal and developer stakeholders



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NB2 Support developers in delivering connections to heat networks

CoL to identify opportunities (using the results of the secondary heat assessment suggested above) to provide developers with better guidance and support to facilitate connections to heat networks

Medium-High Medium term Officer resources required Internal and developers

Offsetting

OF1 CoL to undertake an assessment of opportunities for offsetting residual CO2 emissions

CoL to commission a study to review specific project opportunities for delivering carbon savings outside the City and review the costs and benefits of these.

Low-Medium Medium term Budget required to commission a study and provide officer resource

Internal

OF2 CoL to consult on the options for delivering offsite CO2 emissions savings

CoL should discuss the ‘offset’ options internally to agree on an approach that would be most acceptable, taking account of the measure and location.

Low-Medium Medium term Officer resources required Internal



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10.2 Milestones

The following table sets out key outputs from the model that can be used to develop milestones against which performance can be tracked. To align with the Government’s own Carbon Budgets we have provided the outputs at the end date of each of the upcoming budget periods: 2022 (for the 3rd Carbon Budget period of 2018-2022), 2027 (for the 4th Carbon Budget period of 2023-2027) and 2032 (for the fifth Carbon Budget period of 2028-2032).

Date Metric Outputs from modelling of the ‘Realistic’ scenario

Outputs from modelling of the ‘Accelerated’ scenario

Data source

2022 (Aligned with 3rd carbon budget 2018-2022)

Total CO2 emissions 721 ktCO2 395 ktCO2 1 CO2 emissions buildings 679 ktCO2 367 ktCO2 1 CO2 emissions transport (excl. EVs) 32 ktCO2 23 ktCO2 1

CO2 emissions EVs* 1 ktCO2 2 ktCO2 1 Uptake of low carbon vehicles 47% buses

20% other vehicles 47% all vehicles 2

% new buildings using heat pumps OR heat networks 43% 43% 3

Total PV installed 11 MWp 22.5 MWp 4 2027 (Aligned with 4th carbon budget 2023-2027)





Total PV installed 19 MWp 38.5 MWp 4 2032 (Aligned with 5th carbon budget 2028-2032)





Total PV installed 27 MWp 54.6 MWp 4

Data sources:

1. BEIS ‘UK local authority and regional carbon dioxide emissions national statistics’ updated annually. Available at: https://www.gov.uk/government/collections/uk-local-authority-and-regional-carbon-dioxide-emissions-national-statistics

2. TfL data sets (LAEI and CLoHAM)

3. Energy statements for planning applications, National EPC data, CoL internal data, GLA annual reporting data

4. BEIS ‘Feed-in Tariff statistics’, updated annually, quarterly, monthly and weekly. Available at: https://www.gov.uk/government/collections/feed-in-tariff-statistics



https://www.gov.uk/government/collections/feed-in-tariff-statistics



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Appendix A Stakeholder Workshop A presentation from the workshop has been provided as a supplement document to this report.

Transport

Key Measures Description

National Measures Transport decarbonisation

Currently the transport decarbonisation rate is based on the national trends in transport carbon emissions as described in the BEIS 2017 'Energy and Fuel Emissions' dataset. We are also planning to add the historical data based on DEFRA Local Authority carbon emission records for vehicle emissions from 2005-2015.

Switch to electric vehicles

National projections on electric vehicle uptake

London (GLA and TfL) Measures Transport decarbonisation

TfL data from the HAMs models and LAEI database (which we are awaiting) will offer the opportunity to add in the London specific projections based on projections accounting for modal shift, changes to vehicle movements and improvements in vehicle emissions.


Ability to vary EV uptake for London

CoL and Stakeholder Measures Transport decarbonisation initiatives

Ability to consider other options to vary transport decarbonisation for the City of London Options could include:

• Paris style odd/even number plate system • Car free days (1/month, 1/fortnight?) • Stakeholder initiatives to encourage modal shift • Improved cycling and walking infrastructure • Disincentives for deliveries using non-low emission vehicles


Potential to include other measures to increase EV uptake in the City

• Investment in EV infrastructure • Move towards banning non EVs • CoL role in leading and encouraging EV take-up • Stakeholder role in leading and encouraging EV take-up



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Energy Infrastructure

Key Measures Details

National Measures Grid decarbonisation

The model enables the selection of different projections associated with the decarbonisation of the electricity grid. This will have a significant effect on the carbon emissions associated with buildings so is an important sensitivity for the model. Options include:

• Treasury Green Book marginal and average emissions, which are projections of what needs to happen for the UK to meet the national carbon emission reduction target of 80% over 1990 levels

• Slower rates for the TGB emissions projections • Projection based on the average reduction rate observed over

the last 10 years from DEFRA national emission rate trends

London (GLA and TfL) Measures Not currently included

We have not currently included for energy infrastructure on a London scale (that would not fall into the national or local categories). If London implemented a city-wide heat network (as in Copenhagen) this would qualify but there are no projections for this currently.

CoL and Stakeholder Measures Solar technologies and Heat Pumps

We have incorporated different levels of uptake based on current trends, observed from Feed In Tariff and Renewable Heat Incentive registrations, and higher uptakes which use details on the technical capacity taken from an earlier London-wide study commissioned by the GLA.

District heating

We have included options for modelling the growth of Citigen, making assumptions that it would continue to provide a carbon saving over individual based heating systems into the future. In addition we are including an option for modelling additional uptake of connection to district heating schemes.

Demand-side management

We are currently building in the capability to address the uptake of batteries, smart metering, peer-to-peer trading and other demand side management measures.



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Behaviour Change & Offsetting


National Measures Not applicable

London (GLA and TfL) Measures Not applicable

CoL and Stakeholder Measures CoL behavioural change initiatives

We are looking to build in some behavioural change options that the City of London could have control or influence over, option could include:

• Development of a CoL energy monitoring and reporting scheme • Programme of carbon management and behavioural change

support for SMEs • Creation of CoL Energy Manager forum • Public initiatives on heating (dead-band widening) and lighting

(night-time switch off, weekend power down etc.)

Stakeholder and resident behavioural change initiatives

We are looking to build in the impact of stakeholders delivering:

• Behavioural change programmes • Carbon management programmes

It might be difficult to model these individually but we could do this on a high-level city wide based on assumed take-up rates and using evidence from the Carbon Trust and others of the impact of these kind of programmes on energy consumption and CO2 emissions (generally 5-15%)

Offsetting

We are expecting that most scenarios will show that it may not be possible to deliver zero carbon completely within the City of London and that some offsetting would be required to meet the Zero Carbon target. Potentially there are a number of scales this could be delivered at:

• Physically connected to the City • On land / buildings owned / controlled by the City (but outside its

boundary) • On land / buildings owned / controlled by stakeholders in the City • Any other location near to London • Any other location

Possible options include:

• PV farms • Wind turbines • Anaerobic digestion • Planting trees



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Buildings


National Measures Rate of refurbishment of the existing building stock

This sets the number of years before a building is refurbished. There are several options ranging from 10 to 40 years with a default rate of 25 years, based on the minimum design life for building services, per BS ISO 15686.

Average performance of refurbished buildings

This sets the performance of buildings once refurbished. We have assumed that buildings will be refurbished to meet Building Regulations Part L 2013 standards with the option of improvements beyond this.

Heating in new buildings

This provides an option to define the heating system in new buildings; either matching the existing split of heating types, or assuming that all new buildings will be electrically heated by a set year.

London (GLA and TfL) Measures New build CO2 emission standard

This sets the on-site performance of new buildings. The current London Plan and new draft London Plan both set an on-site target of 35% better than current Building Regulations Part L. Although the new London Plan requires an overall target of Zero Carbon we assume that most developments will deliver the minimum 35% on-site and then pay for the remaining emissions via the offset mechanism. Because that offset funding will end up paying for many of the other measures we are considering separately (refurbishment of the existing stock, heat networks, LZCs etc.) we have not included those savings here to avoid double counting.

Heating in new buildings

This enables variation on the national assumptions on the uptake of electric heating

CoL and Stakeholder Measures CoL rate of refurbishment

This overrides the national assumptions on the rate of refurbishment, which is higher for the City of London (averaging every 10 years)

New development

Allows adjustments to the CoL growth plans for projected increased in floorspace of specific building types. Free entry of values from -100% (no development of that building type) to +100% (double the projected development).

Performance of new buildings

Potential for the City of London to include options to improve the performance of new buildings. It might be difficult for the authority to force this as it has limited planning powers but key stakeholders may want to go beyond the London Plan targets?



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Appendix B Policy & Legislation

International policies and legislation

The Kyoto Protocol (1997) is an international treaty with the goal of achieving the “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”.

The Paris Agreement (2016) is an international agreement relating to national level commitments to reducing greenhouse gas emissions, in order to keep global temperature increases below 2oc. Each country that has signed up to the agreement set nationally determined contributions which specify how much they will reduce their emissions by.

EU Energy Performance of Buildings Directive (EPBD, 2002) is European legislation which requires all EU countries to improve their Building Regulations and introduce energy certification schemes. The 2010 recast EPBD requires countries to move towards new and retrofitted ‘nearly zero energy buildings’ standards by 2020 (2018 for public buildings). The directive was updated in 2016 to cover additional efficiency and technology in buildings.

EU 2030 Energy Strategy (2014) sets out a framework for the development of climate and energy policies across EU member states. The UK is committed to meeting targets agreed between the European Commission and the Member States to reduce CO₂ emissions by 40% on 1990 levels by 2020.

National policies and legislation

Climate Change Act (2008)

The Climate Change Act sets a legally binding target to reduce UK carbon emissions by 80% by 2050, against a 1990 baseline. The Committee on Climate Change advises the Government on the setting of binding 5-year carbon budgets on a pathway to achieving the 2050 target. The first four carbon budgets covering the period up to 2027 have been set in law. The current budget requires a 29% emissions reduction by 2017, while future budgets require reductions of 35% by 2020 and 50% by 2025.

Energy Act (2011)

The Energy Act provides support for energy efficiency measures to homes and businesses through introduction of the Energy Company Obligations and the Green Deal (now withdrawn). The Act also lays out a requirement for energy efficiency improvements to be made in the private rented sector.

National Planning Policy Framework (2012)

The National Planning Policy Framework was published in March 2012, replacing all previous Planning Policy Statements and guidance. Some of the key paragraphs relating to energy are set out below:

93. Planning plays a key role in helping shape places to secure radical reductions in greenhouse gas emissions, minimising vulnerability and providing resilience to the impacts of climate change, and supporting the delivery of renewable and low carbon energy and associated infrastructure. This is central to the economic, social and environmental dimensions of sustainable development

94. Local planning authorities should adopt proactive strategies to mitigate and adapt to climate change, taking full account of flood risk, coastal change and water supply and demand considerations.

95. To support the move to a low carbon future, local planning authorities should:

• plan for new development in locations and ways which reduce greenhouse gas emissions;

• when setting any local requirement for a building’s sustainability, do so in a way consistent with the Government’s zero carbon buildings policy and adopt nationally described standards.

96. In determining planning applications, local planning authorities should expect new development to:

• comply with adopted Local Plan policies on local requirements for decentralised energy supply unless it can be demonstrated by the applicant, having regard to the type of development involved and its design, that this is not feasible or viable; and



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• take account of landform, layout, building orientation, massing and landscaping to minimise energy consumption.

97. To help increase the use and supply of renewable and low carbon energy, local planning authorities should recognise the responsibility on all communities to contribute to energy generation from renewable or low carbon sources. They should:

• identify opportunities where development can draw its energy supply from decentralised, renewable or low carbon energy supply systems and for co-locating potential heat customers and suppliers.

In paragraph 95, reference to ‘the Government’s zero carbon buildings policy’ now needs to be read in the context of the effective cancellation of 2016 Zero Carbon Homes policy (see below). The nature of ‘nationally described standards’ was addressed in the Housing Standards Review, (see below).The NPPF retains an emphasis on decentralised energy sources, and links this with viability.

UK Heat Strategy: ‘The Future of Heating: Meeting the Challenge’ (2013)

The UK Heat Strategy laid out a strategic framework for the transition to a low carbon heat supply. The strategy highlighted the importance of improving energy efficiency of buildings, and incentivised local authorities to enable the development and expansion of heat networks; for instance, by setting up the Heat Network Development Unit (HNDU).

Home Energy Conservation Act (HECA, new guidance issued 2012)

In 2012, the government provided new statutory guidance relating to the HECA (1995). HECA aims to encourage Local Authorities to plan for CO₂ emission reductions on a borough-wide basis. It required all English authorities with housing responsibilities to prepare an initial report by March 2013 setting out ‘the local energy conservation measures that the authority – or group of authorities – consider practical, cost-effective, and likely to significantly improve the energy efficiency of residential accommodation in its area.’

The guidance required Councils to consider how they will use government initiatives such as the Renewable Heat Incentive (RHI) and Feed-in Tariff (FiT) (see below), and how they can facilitate improvements on a street-by-street or area basis.

Housing Standards Review and the Code for Sustainable Homes (2015)

In August 2013 the Department for Communities and Local Government published a Housing Standards Review Consultation. The aim of the review was to rationalise technical building standards by bringing local policies more closely in line with the UK Building Regulations, thereby avoiding duplication or conflicting standards; for instance, in regards to minimum space standards, water use, and CO2 emissions reductions.

Following the Housing Standards Review (2015), a Written Ministerial Statement was issued which indicated that local authorities are ‘not expected’ to require energy performance above the levels needed to meet Code for Sustainable Homes (CSH) Level 4 (equivalent to a 19% improvement over 2013 Building Regulations).

On the specific issue of energy performance, the Policy Statement includes the following:

Local planning authorities will continue to be able to set and apply policies in their Local Plans which require compliance with energy performance standards that exceed the energy requirements of Building Regulations until commencement of amendments to the Planning and Energy Act 2008 in the Deregulation Bill 2015.

This is expected to happen alongside the introduction of zero carbon homes policy in late 2016. The government has stated that, from then, the energy performance requirements in Building Regulations will be set at a level equivalent to the (outgoing) Code for Sustainable Homes Level 4. Until the amendment is commenced, we would expect local planning authorities to take this statement of the government’s intention into account in applying existing policies and not set conditions with requirements above a Code level 4 equivalent.

The Government has now withdrawn the CSH, aside from the management of legacy cases. Therefore, whilst it is currently permissible for policies to include energy performance standards in excess of Building Regulations, this ability may be removed in future through amendment to the Planning and Energy Act 2008. This is of particular relevance to BHCC because CPP1 includes a 19% carbon reduction target for domestic developments (beyond Building Regulations 2013 Part L1A), which is equivalent to CSH Level 4 energy target. This was approved by the Planning Inspector on 5 February 2016 in line with legal powers given to Local Planning Authorities (LPAs) under the Planning and Energy Act 2008.



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UK Building Regulations (Part L adopted 2013)

The Building Regulations set the minimum standards for building performance and must be met for a building to be approved for construction. Part L of the Building Regulations focuses on the conservation of heat and power and sets specific requirements for the fabric performance, building services efficiency, overheating and the CO₂ emissions. Regulations are amended as necessary; the current approved version of Part L was issued in 2013.

UK Zero Carbon Homes policy (announced 2006; withdrawn 2015)

In July 2015 it was announced that:

[…] the Government does not intend to proceed with the zero carbon Allowable Solutions carbon offsetting scheme, or the proposed 2016 increase in on-site energy efficiency standards, but will keep energy efficiency standards under review, recognising that existing measures to increase energy efficiency of new buildings should be allowed time to become established.

This announcement effectively interrupted the previous schedule to update energy efficiency standards for homes every 3 years (with standards having been updated in 2013 and the next update due in 2016) and cancelled the policy for new homes to be zero carbon from 2016.

House of Commons: Written Statement HCWS42 (DCLG, 18th June 2015)

The Secretary of State for Communities and Local Government issued a Written Statement (HCWS42) on 18th June 2015 which included the following direction:

When determining planning applications for wind energy development involving one or more wind turbines, local planning authorities should only grant planning permission if:

- the development site is in an area identified as suitable for wind energy development in a Local or Neighbourhood Plan; and

- following consultation, it can be demonstrated that the planning impacts identified by affected local communities have been fully addressed and therefore the proposal has their backing.

Clean Growth Strategy (October 2017)

The UK Clean Growth Strategy sets out the Government’s vision for decoupling economic growth from carbon emissions. The strategy includes objectives for the improvement in building energy efficiency (including a target to deliver EPC ratings of C in as many homes as possible by 2035), increased generation of energy from renewable sources, increasing the delivery of clean, smart and flexible power and accelerating the shift to low carbon transport., smart grids and energy storage.

The Clean Growth Strategy in particular recognises the need to deliver low carbon heating, as it is acknowledged that there are technical and cost obstacles to achieving this important outcome:

There are a number of low carbon heating technologies with the potential to support the scale of change needed, including heat pumps, using low carbon gases (such as hydrogen) in our existing gas grid and district heat networks.

UK Industrial Strategy (2017)

The Industrial Strategy, published in November 2017, emphasises the need for clean growth in order to boost economic prosperity within the UK. Some of the stated aims of the Industrial Strategy relevant to energy use in the built environment include:

• Increasing the delivery of new homes;

• Decarbonising the heat supply; and

• Lowering emissions from the transport sector.

There is a particularly strong emphasis on supporting electric vehicle uptake, through £400m investment in charging infrastructure and by extending the plug-in car grant. The Strategy also states that, ‘After the Grenfell Review, we will update Building Regulations to mandate that all new residential developments must contain the enabling cabling for charge-points in the homes’ (p. 145).



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Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015

This policy has introduced a Minimum Energy Efficiency Standard (MEES) which is based on the Energy Performance Certificates (EPCs) of buildings.

Under the MEES regulations, from 1st April 2018, any properties newly rented out in the private sector will normally be expected to have a minimum EPC rating of E (exceptions apply.)36 A range of energy efficiency measures can be required of the landlord, though consideration is given to financial viability, the anticipated payback time and impacts on property value. Fines will be applied for non-compliance.

These requirements will apply to all private rented properties even where there has been no change in tenancy arrangements – from 1 April 2020 (domestic properties), and from 1 April 2023 (non-domestic). The domestic property regulations will be enforced by Local Authorities and the non-domestic property regulations by Local Weights and Measures Authorities. The government has stated its intention to increase the minimum rating to D by 2025 and that, ‘Our aspiration is for as many homes as possible to be EPC Band C by 2035 where practical, cost-effective and affordable.’ (Clean Growth Strategy, p. 13).

Greater London Authority (GLA) policies and legislation

On a regional basis the Greater London Authority (GLA) the draft London Environment Strategy sets a target for London to be zero carbon by 2050 proposing a series of interventions that will influence future emissions for London including through the London Plan, the current draft version calling for all major developments to be net zero carbon, rather than in the current version this just focuses on major residential developments.

GLA London Plan - New draft London Plan

Improving air quality

“The development of large-scale redevelopment areas, such as Opportunity Areas and those subject to an Environmental Impact Assessment should propose methods of achieving an Air Quality Positive approach through the new development. All other developments should be at least Air Quality Neutral”

“Major development should be net zero-carbon.

In meeting the zero-carbon target a minimum on-site reduction of at least 35 per cent beyond Building Regulations

is expected. Residential development should aim to achieve 10 per cent, and non-residential development should aim to achieve 15 per cent through energy efficiency measures. Where it is clearly demonstrated that the zero-carbon target cannot be fully achieved on-site, any shortfall should be provided:

1) through a cash in lieu contribution to the relevant borough’s carbon offset fund, and/or

2) off-site provided that an alternative proposal is identified and delivery is certain.

New developments should not be considered in isolation and “[e]nergy masterplans should be developed for large-scale development locations which establish the most effective energy supply options.” Energy masterplans should identify things such as:

• major heat loads

• major heat supply plant

• alternative supply opportunities e.g. waste, secondary, low temperature

• network routes & infrastructure needs and opportunities

• resilience opportunities

“Major development proposals within Heat Network Priority Areas should have a communal heating system, which should be selected in accordance with the GLA’s heating hierarchy.

Action plans such as the proposed Solar Action Plan will set out details for how solar technologies will support the zero carbon target for the London and identify opportunities for solar energy in London and by increasing the number of installations, not just on new building rooftops, but vertical installations, existing buildings or derelict / infill spaces.

36 https://www.gov.uk/government/publications/the-private-rented-property-minimum-standard-landlord-guidance-documents

https://www.gov.uk/government/publications/the-private-rented-property-minimum-standard-landlord-guidance-documents



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TfL Transport Emissions Strategy

Goals are strongly linked to improving air quality and transport accessibility

“support the Capital’s target of reducing CO2 by 60% (against 1990 levels) by 2025

By then, the city's population is expected to have risen by one million and it is vital we provide the services London needs to support growth while minimising emissions and damage to the local environment. Our initiatives to reduce carbon emissions from transport include:

• Smarter Travel: Travel planning advice and tools for businesses, schools and residents to help them adopt safer, healthier and more sustainable transport options

• Encouraging cycling and walking: Improving the urban environment, developing a range of walking routes and using more of the Legible London signs to help people easily find their way around the Capital

• Deliveries in London: We work with operators, boroughs and partners across the freight industry to ensure that goods and services get delivered in London on time, and in a safe, clean and efficient way. Find out how we're helping on the Deliveries in London pages

• Cleaner buses: We are fitting diesel particulate filters, selective catalytic reduction and ensuring that our new vehicles have hybrid engines and the latest engine standards to reduce their emissions

• Regenerative braking: As part of our ongoing Tube improvement we are upgrading lines and increasing passenger capacity. Energy-saving measures include regenerative braking on trains, which saves up to 25% of electricity used

• Source London: Launched in 2011, the city-wide electric vehicle charging network has 1,300 charge points across the Capital

• Greener offices: Our Re:fit programme is improving the efficiency of metering, lighting and heating systems in head offices and operational buildings

• Encouraging staff to take to two wheels. We offer Cycle2work, a tax-efficient scheme that allows staff to buy a bike and associated safety equipment free of tax and National Insurance contributions

London Environment Strategy

“London will have the best air quality of any major world city by 2050, going beyond the legal requirements to protect human health and minimise inequalities.”

With regards to transport the Mayor’s ambitions include:

• “all taxis and private hire vehicles to be zero emission capable by 2033

• all TfL buses to be zero emission by 2037

• all newly registered road vehicles driven in London to be zero emission by 2040

• London’s entire transport system to be zero emission by 2050”

Mayor’s Transport Strategy

The ‘Healthy streets approach’ is key to the new transport strategy for the next 20 year period and will be intrinsic to everything that Transport for London will do in transport planning. The Healthy Streets Approach provides the framework for putting human health and experience at the heart of planning the city. From April 2019 the current London Congestion Charging Zone will also become an Ultra-Low Emissions Zone charging vehicles that are not Low Emitting Vehicles to enter into the area. The scheme will operation 24/7 and help reduce NOx and PM10 thereby improving air quality not only in the zone but around it as most vehicles entering the zone are from the periphery.

City of London (CoL) local planning policy and guidance

The City of London is currently developing a new local plan in the form of the City Plan 2036, City’s current policy approach for development in the City follows the London Plan carbon reduction obligations, promoting energy efficiency, low and zero carbon energy and carbon offsetting with the target that all new buildings (domestic and commercial) should be zero carbon from 2019.



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Local Plan 2015-2026

“Emissions of carbon dioxide and other greenhouse gases must be minimised in order to reduce the contribution that the City’s buildings make to climate change. National targets require all new homes built from 2016 and all new non domestic buildings from 2019 to be zero carbon”

“developers should investigate the feasibility and viability of connecting to existing decentralised energy networks. This should include investigation of the potential for extensions of existing heating and cooling networks to serve the development and development of new networks where existing networks are not available.”

“All feasible and viable on-site or near-site options for carbon emission reduction must be applied before consideration of offsetting”

“Building designs should minimise any contribution to the urban heat island effect caused by heat retention and waste heat expulsion in the built environment”

Air Quality Strategy 2015-2020

Supporting local initiatives through a Clean Air grant scheme, looking for innovative solutions to help improve local air quality.

A number of initiatives have been established to address improving air quality through behavioural change rather than penalties, although they may still be applied, this has been done through idling engine action days, increasing public awareness, monitoring, encouraging business to tackle emissions through the CityAir scheme.

Related to buildings

As a minimum, the dry NOx levels for boiler systems must be less than 40mg/kWh, with an ultra-low NOx scheme actively encourage and also supports the air quality strategy.

Alternatives to diesel generators are encouraged, or where required meet the latest Euro standard available.

City Plan 2036 (draft)

Some of the issues highlighted for the draft City Local Plan include :

Addressing “pressures will major public transport improvements place on how the City works”

Identifying “what role will IT play in the City’s future” and “how can developments in IT support the increase of agile working in the City”

How the plan will “ensure that the electricity, gas, water and sewerage infrastructure meets the needs of the growing city”

What more can be done to address the challenge of climate change and deliver more and improved green spaces within the City.

LZC energy: Financial incentive schemes

Below is a brief overview of some of the key financial incentive schemes for low and zero carbon energy in the UK. The levels of Government incentives for these technologies have been adjusted repeatedly in recent years and it is reasonable to assume that further changes will occur, e.g.:

• There is likely to be a loss of incentive schemes in the short term due to economic factors and increasing competitiveness of certain technologies, e.g. photovoltaics

• On the other hand, there is a possibility that policy requirements will become more stringent, prompting the introduction of new incentive schemes may be in order to meet difficult carbon reduction targets.

Feed-in Tariff (FiT)

• Launched in April 2010, FITs provide a financial incentive for uptake of the following renewable electricity generating technologies:

• Photovoltaics

• Wind



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• Micro combined heat and power (CHP)

• Hydroelectric power

• Anaerobic digestion

Tariff rates are adjusted annually and deployment caps were put in place in February 2016. New applications are expected to end in March 2019.

Renewable Heat Incentive (RHI)

The RHI provides a financial incentive for the uptake of the following heat generating technologies:

• Biomass boilers

• Air source heat pumps

• Ground source heat pumps

• Solar thermal collectors

Renewable Heat Incentive is available to support renewable heat delivered to homes and for renewable heat installed to serve non-domestic buildings.

Note that the Clean Growth Strategy (2008) identifies a need to strengthen and reform the RHI in recognition of the difficulty and urgency of decarbonising the UK heat supply.

Energy Company Obligations (ECO)

The 2011 Energy Bill, which made provision for the Green Deal, also provided for an Energy Company Obligation (ECO). The scheme has been updated several times with the latest update in 2017, known as ECO2t. Under the scheme energy companies are obligated to promote and support carbon emissions reductions to customers.



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Appendix C Comparison against 2009 CO2 emissions report A report carried out by URS in 2009 estimated that the City of London carbon emissions baseline was approximately 1,720 ktCO2 per year. Whereas the present study includes CO2 emissions sources as described in the BEIS statistics, the previous report used a slightly different methodology; the table below describes some of the main differences. However, as shown in Figure 26, the two methods produce very similar results, and therefore in this update, the BEIS method is used.

Figure 26. Comparison of carbon emissions estimates, 2009 study versus current methodology

A key difference is that the 2009 report did not include emissions from transport, which are calculated using a different method than emissions from buildings. Had transport emissions been included, the total for 2009 would have been estimated as roughly 1,773 ktCO2 per year higher, a difference of 73 ktCO2 or less than 5%.

Included in the estimate? 2009 report

2018 report

Gas ✓ ✓

Electricity ✓ ✓

Transport X ✓

Coal X ✓

Manufactured fuels X ✓

Biofuel and waste X ✓

Agriculture X ✓

Land use change (LULUCF) X ✓

Non-transport petroleum ✓ X

CHP heat ✓ X

Energy used for clean water supply

✓ X

TOTAL ESTIMATE (ktCO2 ) 1,720 1,700



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Appendix D Modelling methodology

Key assumptions about the built environment

Existing floor area

Offices, housing, retail, and hotels: See Table 5.

For all other planning use categories, the total floor area is taken from the AECOM 2015 GLA study. Those estimates were based on information compiled from the VOA database, EPC and DEC records.

Split of heating types

For non-domestic buildings, the split of heating types as of 2016 is taken from the AECOM 2015 GLA study.

For domestic buildings, the split of heating types is taken from EPC records (accessed February 2018). There are 4,557 records and therefore the database is assumed to represent roughly 65% of the total domestic stock.

Users input the proportion of buildings that will switch to low-carbon heating sources over time, the year by which the low carbon heating transition will be completed, and specify the relative proportion of heat networks versus heat pumps that will be achieved by that point.

Energy demands

Source

Benchmarks used in this study are taken from previous modelling work AECOM carried out on behalf of the GLA in 2015. These bespoke benchmarks are derived from CIBSE Guide F benchmarks, calibrated based on EPC and DEC ratings for Greater London. SBEM modelling was then used to assess the split of end uses for energy in buildings of various ages and energy performance levels, along with different climate years.

Note that, for the purpose of this study, it has been assumed that 100% of domestic buildings are flats. Domestic EPC data indicates that the true figure is around 97%. Because domestic properties represent a small proportion of total energy use in the City, this is not expected to have a significant impact on the results.

Calibration

Fuel consumption for existing buildings is calibrated of the bottom-up analysis for 2016 are compared against 2015 BEIS fuel consumption data to derive calibration factors for both gas and electricity use.

Energy demands in new buildings

Energy demands are calculated by multiplying the floor area (m2 or number of dwellings) by the relevant benchmark for each planning use category (kWh/m2 or kWh/dwelling), and accounting for heating or cooling efficiencies.

Impact of refurbishment

Rates of refurbishment

It has been assumed that refurbishment takes place every 10 years by default and that all building types are refurbished at the same rate. Therefore, in a given year 1/10th of the total floor area (10%) would undergo refurbishment. Once 100% of the stock has been refurbished, it is assumed that there are no further improvements, i.e. the cycle does not repeat. In reality, some buildings would have scope for additional fabric improvements, and it is likely that the efficiency of building services may increase; however, these are not considered in this study.

Effect of refurbishment on energy consumption

The benchmarks for ‘old’ and ‘recent’ buildings were weighted according to the age profile of the London building stock in order to develop ‘typical’ energy demand benchmarks for each building type. These were compared against



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the benchmarks for ‘new’ buildings in order to find the net change in energy demands that would arise from an upgrade.

The annual change in energy demand per end use is then calculated based on the total floor area being refurbished in a given year (see ‘rate of refurbishment’).

In other words, the calculation assumes that the refurbishment process results in the existing stock being upgraded to meet – on average – Part L 2013 energy performance standards.

Transport

Note: Allocating emissions from EVs

Renewable fuel consumption data for road transport was unavailable for this study. Therefore, in line with the LAEI and BEIS methodology for estimating CO2 emissions from transport, it is assumed that, at present, 100% of road transport within the City of London uses petrol or diesel fuel. In reality, the City is likely to have an unusually high proportion of renewable fuel vehicles, i.e. hybrid taxis and personal cars, TfL buses, etc.

It is likely that some electricity consumption within the City is used for EV charging points. However, this is not specified in the BEIS electricity consumption dataset. Furthermore, whereas emissions related to electricity use in buildings is allocated according to the location of the building (i.e. the point of end use), emissions for vehicles are allocated based on where the vehicle travels. Therefore, if an EV charges within the City but immediately drives to a different local authority, it is not clear whether those would be counted within the City’s carbon budget. Also of note, any fuel used for commuting would be classed as Scope 3 emissions, which are not considered in this report.

Due to these methodological questions, emissions from electric vehicles are calculated and reported separately from other transport emissions.

Fuel consumption: Road transport

Several scenarios are available to represent the ‘business as usual’ projected fuel consumption for road vehicles:

• BEIS 2017 projections: BEIS publishes annual estimates of future national fuel consumption and CO2 emissions. The BEIS reference scenario incorporates central assumptions about economic and population growth, fuel prices and energy policies. This represents the national trend in consumption of petroleum products for road transport through the year 2035. In this study, the average annual change in consumption from 2030-2035 was extrapolated to 2050. Then, using BEIS 2015 data as a baseline, the same proportional reduction was applied to fuel consumption for all vehicle types.

• LAEI 2013 projections: The LAEI 2013 report estimated the CO2 emissions based on assumptions about the vehicle types, speed, and traffic flow for each section of road within Greater London.

• Historic rates: This scenario is based on the average annual change in total fuel consumption for transport as reported in BEIS statistics for the City of London from 2005-2015. On average there is a roughly 3% decrease per year and this is applied to all vehicle types through the year 2050.

The projected fuel consumption is then reduced according to manual user inputs for:

• Uptake of renewable fuel vehicles

• Changes in journey number or length

• Implementing time restrictions on travel

These are applied as a percent reduction to what would otherwise be the total fuel consumption in a given year.

Note that road transport emissions depend on factors such as the acceleration behaviour of individual drivers. Both the BEIS and LAEI CO2 emissions estimates utilise a complex transport model to predict CO2 emissions. For the purpose of this study, the total fuel consumption (kWh) was multiplied by the fuel emission factor (kgCO2/kWh) to estimate the emissions for each vehicle type. Estimates made using this simpler method were found to be consistently around 20% higher than BEIS statistics for the City of London, based on an assessment of historic data for 2005 through 2015. In order to account for the difference in carbon emission factors, the average proportional difference over that 10-year period has been used to calibrate the transport CO2 estimates.



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Fuel consumption: Non-road transport

It has been assumed that fuel consumption for non-road transport remains at 2015 levels as per BEIS statistics. The dataset includes ‘diesel rail’ and ‘other transport’ which together represent <0.5% of the total CO2 emissions for the City. Therefore this exclusion is not expected to have a significant impact on the results.

Emissions from the London Underground are not reported in the BEIS dataset for the City and have therefore been excluded from this report. Note that emissions from commuting (Class 3 emissions) are outside of the scope of this study.

Caveats

By default, it is assumed that the proportion of vehicle types will remain the same, whereas in fact, improvements in the public transport system, increases in ridesharing, and campaigns to encourage walking or cycling could all affect transport mode.

Manual user inputs are available to modify the number or length of journeys for specific vehicle types.

Uptake of EVs (and renewable fuel vehicles)

Fuel switching

It is assumed that 100% of road transport could eventually be powered by renewable fuels, as follows:

• Petrol cars, motorcycles, and LCVs: Switch from petrol to electricity

• HGVs and buses: Switch from diesel to biodiesel

• Diesel cars and light commercial vehicles: Switch from diesel to electricity

Impact of behaviour change or traffic management

Transport emissions reduction strategies are represented in the model as a percent (%) reduction in traditional fuel consumption for each vehicle type. So, for instance, a policy of banning private vehicles one day a week starting in 2025 would be represented by a 1/7th (14%) reduction in fuel consumption for cars and motorcycles from that date onwards. Similarly, a campaign to reduce road trips by 25% by 2050 would be represented by a linear progressive reduction.

Low and zero carbon technologies

Key assumptions

In 2015 AECOM carried out a study on behalf of the GLA to evaluate the potential LZC capacity in Greater London. The methodology was based on the DECC 2010 Renewable Energy Capacity Methodology and incorporated LSOA level building stock data to provide a tailored assessment reflecting London’s unique conditions. Key assumptions are summarised below.

• PV: Based on the total available roof area, incorporating reduction factors for overshading, competing services, and conservation areas. For the purpose of this study it is assumed that the suitable roof area will not change over time as the building footprint will not change; all new development will take place on previously developed land.

• SHW: Assumed to be suitable for flat roofs and south, south-east or south-west facing pitched roofs. For suitable domestic properties, a standard installation size is assumed. For suitable non-domestic properties, it is assumed that systems will be sized to meet 50% of the hot water requirements.

• Heat pumps:

─ ASHPs: In the AECOM 2015 methodology these are assumed to be suitable for dwellings with an EER rating of ‘C’ or above and 50% of non-domestic properties. Stage 4 potential subtracts those served by GSHPs. For the purpose of this study it is assumed that ASHPs could in principle be included in up to 100% of new buildings.

─ GSHPs: Assumed to be suitable for houses with an EER rating of ‘C’ or above, 5% of commercial properties and 40% of industrial properties. The total capacity is then based on the number of suitable



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buildings of different use categories, and assumes a standard installation size. The actual number is highly dependent on ground conditions, detailed engineering assessments and subject to Environment Agency approval; therefore, the figures are indicative only.

Note: The split of ASHPs versus GSHPs is determined by user input in the Dashboard. The proportion of GSHPs should not exceed 5% (based on the assumptions listed above and considering that the majority of buildings within the City are commercial).This is used to develop a ‘blended’ COP which is the weighted average of the COP for each type, and then used to determine the energy consumption.

─ WSHP: The size of any WSHP in the Thames would be limited due to the risk to the environment of changing the river temperature. Although a detailed feasibility assessment has not been carried out, it is considered that an installation of around 2-3MW might be acceptable. (There is an existing 2.3 MW WSHP at Kingston Heights).

• Large PV: Assumed to be offsite; no theoretical limit on size.

• Large wind: Assumed to be offsite; no theoretical limit on size.

LZC impact on total CO2 emissions

PV and large wind are assumed to displace grid electricity and SHW is assumed to displace gas boilers.. The CO2 savings are equivalent to the CO2 that would have been emitted if the energy output from PV was instead taken from grid electricity or gas. This changes year-to-year depending on the electricity grid decarbonisation scenario selected.

Heat pumps of all types are represented in the model as one of several options for heating systems. Depending on user inputs, the model calculates the split of floor area for each building use category and age by heating type. Energy demand benchmarks and system efficiencies are then used to derive total fuel consumption.



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Appendix E CO2 savings from Citigen Due to the dataset used, it has not been possible to carry out a detailed assessment of the impact Citigen has on the energy demand or CO2 emissions for the City of London relative to the rest of the City.

Key issues:

• The BEIS fuel consumption statistics do not account for the presence of such systems, and therefore it is not possible to disaggregate the impact it has on total CO2 emissions for the City.

• Electricity generated by Citigen and supplied to properties within the LA boundary is transmitted through the main distribution network. This has lower carbon intensity, on average, than grid electricity, but this difference is not reflected in the BEIS figures for CO2 emissions from electricity.

• Citigen is a cross-borough DHN and it is not clear to which LA the gas consumption is allocated.

• The BEIS fuel consumption statistics do not fully capture the energy demand for heat, because of the number of buildings that are linked to the DHN.

Therefore:

• The BEIS dataset may overestimate CO2 emissions from electricity consumption within the borough as electricity produced by Citigen has a lower fuel emission factor than the grid average.

• The actual demand for heat from gas and electricity is lower than predicted in the energy model because it is supplied through the DHN.

• The impact that Citigen may have had on either fuel consumption or CO2 emissions over time cannot be assessed using the BEIS City of London datasets.



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Documents

Zero Emissions City - City of London · City of London, Zero Emissions City Prepared for: City of London, Department of the Built Environment AECOM Quality information