AGENDA ITEM NO. 7
REPORT TO: Executive Board
REPORT NO: PAW/01/10
DATE: 5 January 2010
LEAD MEMBER: Councillor David A Bithell
(Environment and Transport)
LEAD OFFICER: Phil Walton, Strategic and Performance Director
CONTACT OFFICER: Anna Wallace (Tel: 292298)
SUBJECT: Corporate Priority Progress Report
Carbon Emission and Energy Use Reduction
WARD: All
1. PURPOSE OF THE REPORT
To provide Executive Board with an update on the progress of the Carbon Emission and Energy Use Reduction Priority, and information on two key financial drivers for this priority.
2. EXECUTIVE SUMMARY
2.1 Council approved Carbon Emission and Energy Use Reduction as a Council Priority for 2009/12 in December 2008, and Executive Board approved the process for the development and implementation of this priority as a corporately significant project in February 2009
2.2 A Carbon Project Team has been set up to support the delivery of the priority including a project sponsor, two project managers, a Member/Officer Project Board, and a Core Officer Project Team (Appendix I)
2.3 The Carbon Project Team is working closely with the Carbon Trust and the Energy Saving Trust to baseline our carbon footprint across all our activities and to progress the action plan that has been developed for this priority, detailed in Appendix III.
2.4 Two financial drivers have been identified for this priority:
· The value at stake, which is the cost to the Council of continuing with business as usual rather than meeting our aspirational target of a 50% reduction in carbon emissions by 2015/16. This has been calculated for us by the Carbon Trust as nearing £19 million by 2015/16, against a baseline year of 2005/06 (Appendix IV).
· The Carbon Reduction Commitment Energy Efficiency Scheme, which is a mandatory cap and trade scheme for CO2 emissions in the UK, starting in April 2010. The scheme requires organisations to purchase allowances to cover their emissions at the start of each financial year and report actual emissions at the end of the year, receiving bonuses for good performance and penalties for poor performance. Based on 2007/08 figures it is estimated that the purchase of carbon allowances would amount to a sum of £200,000 per annum for the Council. This figure will increase significantly from April 2013 onwards, as the amount of allowances available to buy is reduced and allowances are able to be bought and sold between organisations via a market place. (Appendix V).
2.5 Significant work has also taken place to generate ‘pump prime’ funding in order to implement a number of invest to save projects. We have submitted a bid of £1.3 million to a WAG Invest to Save Fund, for replacement programmes for street lighting and boilers. We have been awarded £214,315 from Salix for a loan for energy efficiency projects in our schools and leisure centres. Internally £200,000 has been allocated to this priority by Executive Board, to manage the evolving programme of work. A budget pressure of £200,000 has also been put forward for the 2010/11 Revenue Budget. This is essential to ensure the fund for this priority grows overtime, in order to meet impending carbon pressures and ensure we minimise penalties under the Carbon Trading Scheme (Carbon Reduction Commitment Energy Efficiency Scheme).
2.6 Development of the communications strategy for this priority has commenced with a survey to baseline the opinions of staff, Members and the public. Alongside this communications have also begun with the launch of the SMART Meter campaign with SMT and Members during Energy Saving Week.
2.7 Work within departments is also being carried out as detailed in the Action Plan (Appendix III) and we are working with partners to support the development of low carbon communities across the borough.
3. RECOMMENDATIONS
3.1 Members note the progress made on developing and implementing the Carbon Emission and Energy Reduction Council Priority
3.2 Members notes the significance of the financial drivers for this priority
3.3 Members support the 2010/11 Budget Pressure of £200,000 ‘Carbon Emission and Energy Usage Reduction – Match funding for growth and development of Invest to Save Fund’.
REASON FOR RECOMMENDATIONS
To support the delivery of significant change and improvement over the next three years in the Council Priority area Carbon Emission and Energy Use Reduction.
Phil Walton
Strategic and Performance Director
4. BACKGROUND INFORMATION
Overview
4.1 In December 2008 Full Council approved the package of Council and Improvement Priorities for 2009/12, including the Council Priority Carbon Emission and Energy Use Reduction.
4.2 In February 2009, the Executive Board approved the process for the development and implementation of this priority, as a Corporately Significant Project and nominated 3 members to sit on the Project Board.
4.3 A robust Project Management Structure has been set up to support the delivery of the priority including a Project Sponsor, Project Manager, a Member/Officer Project Board, and a Core Officer Project Team (Appendix I). The Project Board meets on a quarterly basis to provide strategic direction and support, and monitor and review progress on the project. The Core Officer Project Team meets on a regular basis, in order to undertake work that facilitates the development and implementation of the project.
4.4 The overall aim, outcome and measures have been defined for this priority (Appendix II) and in September 2009 the Project Board agreed the Action Plan developed for this priority, as detailed Appendix III.
4.5 The Action Plan covers a number of areas of work including baselining, procurement and funding, communications, non domestic buildings, street lighting, housing, waste, and transport. The actions supporting the delivery of this priority during 2009/10 have now been incorporated into Department Service Plans and the Ffynnon Performance Management System, and SMT and Members received their first formal performance report on this priority, as part of the 2009/10 quarter 2 performance monitoring process. Departments are currently incorporating actions that they are being commissioned to undertake over 2010/11 into their service plans, as part of the 2010/11 service planning process.
Financial Drivers
4.6 It is important for Lead Members to be aware of and understand two key financial drivers that have been identified for this priority, known as the Value at Stake and the Carbon Reduction Commitment (CRC Energy Efficiency Scheme).
Value at Stake
4.7 The Value at Stake is a quantification of the financial difference between doing nothing and continuing with business as usual, or meeting our aspirational target of a 50% reduction in carbon emissions by 2015/16.
4.8 Our Value at Stake has been calculated for us by the Carbon Trust, as reaching a cumulative value of somewhere in the region of £19 million by 2015/16, against a baseline year of 2005/06. The graph in Appendix IV demonstrates the projected growth in the annual value at stake over this period.
Carbon Reduction Commitment (CRC Energy Efficiency Scheme)
4.9 The CRC Energy Efficiency Scheme is the new mandatory cap and trade scheme for CO2 emissions in the UK, starting in April 2010 (Appendix V). The Council will have to comply with the scheme which will be an extremely challenging process.
4.10 The scheme requires organisations to purchase allowances to cover their emissions at the start of each financial year and report actual emissions at the end of the year. If actual emissions at the end of the year equal our estimated emissions and allowances purchased at the start of the year, then we will receive all of that money back. Moreover, if they are lower then we will receive a bonus dependent on our position in an annual league table. However, if our actual emissions are greater than estimated, then we will be required to buy extra emission allowances.
4.11 At the start of the scheme allowances will be at a fixed price of £12 per tonne. For Wrexham this would amount to a sum of £200,000 a year based on our 2007/08 emissions, which totalled 16,580 tonnes. However, from April 2013 onwards the amount of allowances available to buy will be reduced and ‘extra allowances’ will need to be bought and sold between organisations via a market place, which could lead to a significant increase in this figure.
4.12 The scheme, which is being administered by the Environment Agency will begin with a monitoring year in 2010/11. The first compliance year will be 2011/12, with the first payment due in April 2011, the first report of our emissions due in July 2012, and the first recycling payment for these emissions administered in October 2012.
Baselining Projects
4.13 Work has commenced on two key projects for this priority during 2009/10, which involve working with the Carbon Trust and the Energy Saving Trust to baseline our Carbon footprint across all our activities and produce a Carbon Management Plan for the Council.
4.14 Baseline data has been collected for our non domestic buildings stock, street lighting, fleet, business miles, housing and municipal waste, along with information on how we manage our energy and carbon emissions.
4.15 We are currently in the process of identifying and quantifying carbon saving opportunities across these areas. The outcomes of this work will feed into a workshop due to be held in March 2010, which will look at how to embed and implement an evidence based Carbon Management Plan across the Council.
4.16 This baseline information will also be vital in forecasting our liability under the CRC Energy Efficiency Scheme.
Funding
4.17 Fundamental to the delivery of this priority will be ‘pump prime’ funding to deliver invest to save energy efficiency projects across the Authority.
4.18 In May 2009 WAG announced an Invest to Save Budget of £60 million available during 2009-10 and 2010-11 to support the delivery of public sector improvement projects that will result in significant cash releasing efficiency savings. WAG will fund up to 75% of projects costs, which is required to be repaid in full when the project delivers it’s expected efficiency savings. We submitted a total bid of £1.3 million for this fund, to accelerate the development of the Council’s annual Energy Conservation Budget into a recycling funding model, and carry out replacement programme for heating boilers and street lighting. This bid was presented to WAG officials in November 2009 and results are expected shortly.
4.19 In August 2009 WAG also announced £4 million of new funding to help businesses and the public sector become more energy efficient and tackle climate change. The fund, which will be administered by SALIX will be used to provide interest free loans for ‘spend to save’ projects that will reduce energy costs and contribute to reductions in green houses gases. We have been awarded £214,315 from this fund for a Combined Heat and Power Unit at Waterworld, Voltage Optimisation in Wrexham schools and a number of energy conservation measures at the North Wales Tennis Centre.
4.20 Internally, £200,000 of Council reserves has been allocated to this priority by the Executive Board (1st December 2009). A budget pressure of £200,000 has also been put forward for the 2010/11 Revenue Budget. These essential funds will augment the current Energy Conservation Budget, in order to manage the evolving programme of work for this Priority. This work programme will ensure that we are able to meet impending carbon pressures and minimise potential penalties under the Carbon Trading Scheme (as per paragraphs 4.9 to 4.12). The budget for this priority will need to continue to grow overtime, in order to deliver more complex projects that will realise large carbon and financial savings for the Authority. These projects will require investment in new technology and specialist technical support to facilitate their implementation.
Communications
4.21 Also key to the transformational change needed to deliver this priority will be a communications strategy aimed at producing lasting behavioural and cultural change. We are currently carrying out a survey to baseline the carbon reduction attitudes of the public and will be carrying out a similar survey with Members and staff in January 2010. The results of this survey will be then used to inform the development of a Communication Strategy, which will be implemented from April 2010.
4.22 Alongside this we have also begun communications campaigns with staff and Members, in particular the SMART Energy Meter campaign. Commencing on the 21st October during Energy Saving Week SMT, Councillor Aled Roberts and the three Members who sit on the Carbon Emissions and Energy Use Reduction Project Board trialled ten SMART Energy Meters. They will piloted them for a two week period and now they are being circulated among other staff and Members. The meters have a digital display that allow users to see their power usage, cost and CO2 emissions, as well as compare energy use on a daily, weekly, or monthly basis. We are also investigating the possibility of purchasing a larger number of meters and making them available for the public to loan through the library network.
Departmental Work
4.23 Within departments work has also begun to prioritise improvements in our non-domestic buildings demonstrating poor energy efficiency, review the efficiency of our street lighting system, extend and promote the provision of energy efficiency advice to our tenants and residents, calculate the waste totals from our direct operations and develop a sustainable work place travel plan. Further details of departmental work can be found in the Priority Action Plan (Appendix III).
Partnership Work
4.24 Working with our partners the Wrexham Sustainability Forum and Groundwork we have also started discussions to support the development of a ‘Low Carbon Communities in Wrexham’ initiative. A Joint Proposal was taken to Community Council Forum on 6th October, which was enthusiastically received, and interested Community Councils and Community Groups have been invited to access future support and funding through Groundwork.
5. CONSULTATION
5.1 The direction and outcomes for the priority were agreed following consultation with all Members and senior officers. Specific targets and actions were challenged by the appropriate scrutiny committees in early 2009.
5.2 Subsequent progress on the priority has been undertaken in consultation with the Project Board, which includes three Member representatives as well as officer representation from the Planning, Transport and Asset Management, Economic Development and Finance and Performance Departments.