A Sustainable Energy Agency for Cumbria:
The Business Case
A study for the Lake District National Park Authority
Rebecca Willis
December 2008
www.rebeccawillis.co.uk
About this work
During discussions at the Cumbria Renewables Panel (at its first meeting, in September 2008), and at the Low-Carbon Lake District conference in June 2008, the idea was put forward for a Cumbrian ‘Centre of Excellence’ or Agency to promote local sustainable energy projects.
This report takes that idea a stage further. Based on research into similar organisations elsewhere in the UK, and discussions with a wide range of stakeholders in Cumbria (see Annexes 1 and 2), the paper sets out a ‘business case’ for an Agency.
Further work is needed to develop a more detailed business plan, in collaboration with related organisations that already provide advice and support in the County.
Comments and thoughts on this proposal would be welcome and should be submitted in the first instance to Rebecca Willis at .
Contents
1. Introduction: Towards a low-carbon economy 4
2. Current levels of support for sustainable energy in Cumbria 6
· Strengths and weaknesses of this structure
3. Sustainable energy opportunities 8
· Pulling national and regional resources into Cumbria
· Growing awareness of climate change
· Cross-sectoral working
· Making more of Cumbria’s assets
· Proactive planning and building control
· Strategic projects
· Link to large-scale renewables developments
· Building greater awareness and action
4. The role of an Energy Agency 11
· Examples from elsewhere
5. A possible structure for a Cumbria Energy Agency 15
6. An Energy Agency for Cumbria: Stakeholder views 17
7. Next steps 16
Annex 1: Organisations and people consulted 19
Annex 2: Some other energy agencies and similar organisations 20
1. Introduction: towards a low-carbon economy
To play its part in halting dangerous climate change, the UK needs to reduce emissions of carbon and other greenhouse gases by 80 per cent over the next forty years. The Climate Change Act, recently passed by Parliament, has set binding ‘carbon budgets’ for the UK as a whole, with around a 30 per cent reduction by 2020.
This means that each area of the UK will need to achieve substantial carbon cuts. As an interim measure, Cumbria Strategic Partnership has signed up to a target to reduce emissions per capita by 11.5 per cent by 2010/2011, with local action accounting for 3.75 per cent.[1] Over the longer term, further savings will be needed.
Tackling climate change can bring substantial benefits to the local economy, as a recent study for Cumbria Vision showed.[2] With the right support and encouragement, the county as a whole could benefit from moves to cut carbon. The study estimates that there is potential for around 1500 new jobs in the sustainable energy and tourism sectors, in areas such as biomass and biogas supply chains, and small-scale energy installations.
A clear framework is now in place for tackling climate change in Cumbria:
· A Climate Change Strategy for Cumbria is currently being agreed by the Cumbria Strategic Partnership (CSP). This commits all members of the CSP (including local authorities and public, private and voluntary sector organisations) to take action to reduce emissions.[3] It is linked to the NorthWest Climate Action Plan.
· A delivery plan has been drawn up, to show how the County can achieve 3.75 per cent emissions cuts over the next three years.[4]
· The twenty-year Cumbria Economic Strategy, drawn up by Cumbria Vision, includes a commitment to develop the energy and environmental technologies sector in the County. Cumbria Vision has established the Cumbria Renewables Panel, to provide specialist advice on developing the renewables sector.
· The Lake District National Park Authority has pledged to play a leadership role on climate change, and held the Low-Carbon Lake District conference in June 2008 to chart a way forward. The idea for a ‘centre of excellence’ or sustainable energy agency was put forward at the conference.
Looking to the longer term
In the short term, cost-effective carbon reductions can be achieved through promoting energy efficiency in homes, offices and businesses. The Delivery Plan mentioned above recommends a redoubling of efforts to promote energy efficiency. Over the medium to long term, though, further carbon savings could be achieved through a shift to ‘distributed energy’, or local energy systems, defined by the government as “the local supply of electricity and heat which is generated on or near the site where it is used”. Examples include community heating schemes for social housing; biomass boilers for properties not connected to the mains gas grid; solar, micro-hydro and small-scale wind power.
The government’s Renewable Energy Strategy states that “community distributed energy has the potential to make a significant contribution to renewable energy and carbon reduction targets”, and sets out the benefits of distributed energy:
· People shift from being passive consumers of energy to becoming producers, making an active contribution to energy and climate goals;
· Alongside energy efficiency, distributed energy has a crucial part to play in reducing the carbon impact of the built environment;
· Technologies at household scale can be installed and connected relatively quickly;
· Distributed energy (particularly heat) can help tackle fuel poverty, through reducing fuel bills;
· Distributed energy can increase overall system efficiency, as the loses that occur in transportation are reduced;
· Distributed energy brings diversity to the energy mix, helping promote energy security and local resilience.
Cumbria has an abundance of natural resources that could be used to generate renewable electricity and heat, from wind, sun, water and wood. Despite this potential, there are very few distributed energy developments in the county (although there are a significant number of developments of large-scale wind power, onshore and offshore). This is because of the considerable hurdles involved in establishing distributed energy systems. There is a need to source good technical advice; finance upfront costs for equipment and installation; overcome legal hurdles such as planning and licensing; and (in the case of electricity) negotiate with electricity suppliers and distributors to access the grid.
This paper therefore puts forward the case for a ‘sustainable energy agency’ to maximise these long-term opportunities, and put Cumbria on a path toward a low-carbon economy.
2. Current levels of support for sustainable energy in Cumbria
There are sources of advice and information available to businesses, communities and the public sector in Cumbria. The diagram below sets out the main organisations involved.
Cumbria-based organisations:
· The Cumbria Renewables Panel, and the Cumbria Strategic Partnership, are strategic bodies that steer the county’s response to climate change and sustainable energy.
· The Energy Coast Masterplan is a regeneration initiative for the West Coast, and includes the ‘energies for the future’ project, looking at opportunities for renewable and sustainable energy (particularly skills development and manufacturing)
· Cumbria Woodlands employs a member of staff to promote biomass energy (working on both demand and supply).
· Cumbria Business and Environment Network (CBEN) helps businesses, particularly SMEs, take action on the environment.
· Cumbria Green Business Forum (CGBF) is a grouping of businesses that help each other improve their performance and lobby for change.
· Cumbria Action for Sustainability (CAfS) runs the popular Green Build Fortnight and helps communities take action on climate change.
· The Energy Efficiency Advice Centre (EEAC) in Carlisle provides householders and others with basic energy advice.
· A raft of community groups, including new Transition initiatives, helps communities to act together.
Northwest based organisations:
· Envirolink Northwest aids the development and growth of the energy and environmental technologies and services sector in the Northwest of England. A new low-carbon market development programme operated by Envirolink will have staff in each sub-region.
· EA technology’s Energy Innovation Centre in Cheshire helps start-up companies in the energy sector.
· The NorthWest Biomass Project helps large energy users investigate biomass options.
National organisations:
· The Carbon Trust helps businesses and the public sector to cut carbon emissions.
· The Energy Saving Trust provides advice to householders, business and communities, in part through its local centres.
Strengths and weaknesses of this structure
This analysis shows that there is advice available, particularly on energy efficiency, to businesses, householders and communities, through CBEN, the EEAC and CAfS, as well as a number of voluntary groups (CGBF and community groups). All these groups, however, are under-resourced and cannot meet the demand for their services.
The business sector is relatively strongly supported, given the additional Energy Coast Industries for the Future Project, and the work of CBEN and Envirolink. There is more specialist support for biomass than other technologies, though again, resources are limited.
A clear weakness is the lack of a ‘champion’ providing leadership and strategic oversight. The new Cumbria Renewables Panel may assume this role, but it is currently just an advisory body.
While advice is available to those who ask, there are fewer attempts at proactive project development. The advice and support services are ‘wide and shallow’, focusing on basic advice to many, rather than ‘narrow and deep’ – a small number of more ambitious projects. This basic advice is absolutely essential, yet many regions combine the basic advice with proactive development of flagship projects as well.
Another striking finding is that there is little cross-sector working, between business, community and public sector organisations. The Renewables Panel convenes these sectors, but of all the advice providers, only Cumbria Woodlands deals with all three sectors.
There is currently little organised support for the public sector, beyond the framework set by the Strategic Partnership, though several local authorities are working together on a joint Carbon Trust carbon management project.
3. Sustainable energy opportunities
The analysis of the current support structure shows that there are a range of opportunities that are not currently being taken up.
Pulling national and regional resources into Cumbria
The new Climate Change Act, passed in November 2008, commits the UK to working within a statutory ‘carbon budget’ set by the Climate Change Committee. The overall aim is an ambitious 80 per cent carbon reduction by 2050, with around 30 per cent by 2020. To meet these targets, a comprehensive set of policies is needed. Some of these are already in place; others are under development. All policies aim to encourage people, businesses and local areas to take action, providing incentives for carbon reduction. This means that there are considerable economic benefits for those areas that organise to make the most of the opportunities available.
Examples of existing and forthcoming policies include:
· CERT (Carbon Emissions Reductions Target): This is an obligation on energy suppliers to help customers install energy efficiency measures (including some forms of distributed generation). Energy suppliers can meet their targets in any area nationally, and Cumbria is not currently getting high levels of CERT funding.[5] From 2012 CERT will be replaced by a more ambitious policy which is likely to require energy suppliers to reduce absolute demand (rather than just increasing efficiency). Increasingly, energy suppliers need to look beyond simple measures like loft and cavity wall insulation to meet their targets, and are investigating distributed generation.
· Grants for distributed generation through the Low-Carbon Buildings Programme (though these may come to an end as feed-in tariffs are introduced, see below)
· Zero-carbon new buildings: A target has been set to make all new homes zero-carbon by 2012, and commercial buildings by 2016. Although there is as yet no clear definition of ‘zero-carbon’, it is very likely to include distributed generation of heat and / or electricity.
· Renewable Obligation Certificates (ROCs): generators of renewable power gain ROCs which can be sold to energy suppliers to meet their obligation to source power from renewable energy. Reforms to the ROC system mean that some distributed generation, such as photo-voltaics (PV), are eligible for more ROCs.
· Feed-in tariffs: The government has committed to introducing ‘feed-in tariffs’, meaning that those who generate their own power on-site will be able to sell their excess electricity to the grid at premium rates.
Cumbria is currently not as effective as it could be at accessing the benefits of national schemes, policies and funding schemes. CERT funding tends to go to big urban areas with higher housing density, where it is easier and cheaper to undertake large insulation schemes. Pulling resources into Cumbria requires an active relationship with energy companies. Success depends in part on how proactive an area is in searching out opportunities. The SouthWest has had more than its expected share of grants under the Low-Carbon Buildings Programme, and contractors put this down to the success of local energy agencies.
Growing awareness of climate change and willingness to respond
Another opportunity is the growing awareness of climate change among individuals and businesses. Research for the Energy Saving Trust has shown high levels of awareness of climate change, but little understanding of the steps that can be taken to reduce carbon emissions. All of Cumbria’s existing support organisations, CAfS, CBEN, CGBF, the EEAC and commercial consultants, report increasing levels of demand for their services.
Cross-sectoral working
At present, support services are generally sector-specific. CBEN provides support for businesses, CAfS for communities, and so on. Cross-sectoral working has proved to be highly effective, in Cornwall, for example, through the Cornwall Sustainable Energy Partnership, which links across sectors. In many cases, there will be opportunities for distributed generation which link across sectors. A very simple example is where a local community organisation (third sector) might want to work with a school (public sector) to install energy efficiency and on-site generation, which provides an opportunity for local contractors (private sector). In larger, more complicated schemes, this is even more likely to be the case. Birmingham City’s heat network (a combined-heat-and-power facility linking a number of buildings in the city) was established by the City Council, run by a private company, and provides heat and power to public sector and private sector buildings. These examples show that there is a real need to link different sectors and encourage co-ordination and collaboration.