MD2700 North London District Energy Network

1.1. The North London Heat Networks project, funded by the Mayor’s Green New Deal Fund, will catalyse the development and expansion of an area-wide district energy network in north London. This will be one of the first projects to be developed and delivered through the Mayor’s Green New Deal. As part of that process we have engaged with London Councils on the opportunity. It will demonstrate how, by working together, we can build large strategic area-wide district energy networks that will help decarbonise London by utilising low carbon heat sources and demonstrating how to retrofit existing buildings for connection to those networks.

1.2. Once the network is built out it will provide the capability to make use of up to the 60MW of waste heat that will be available from the Edmonton Energy Recovery Facility (ERF) when it is built. The Mayor’s London Environment Strategy highlights that to decarbonise London we need to not only reduce the energy use of buildings but also transform the energy system so that an amount of the heat and power required by buildings and transport is supplied from clean, local and renewable sources, including waste heat and solar. For example, by using local secondary energy sources such as waste heat, cities can reduce demand for primary energy and fossil fuels whilst reducing their carbon emissions and increasing their energy security and resilience.

1.3. Waste to Energy plants produce large volumes of waste heat and when operating in combined heat and power mode this can provide an important source of low carbon heat for decarbonising local homes and businesses. But to realise this opportunity the plant needs to be connected to a local heat network otherwise this valuable low carbon resource is just vented to the atmosphere as waste heat. This project is supporting the construction of a local heat network capable of maximising the use of waste heat from the Edmonton ERF to help decarbonise homes and offices, initially in Enfield but then in Haringey and Hackney too.

1.4. Failing to invest now will limit the capacity of the heat network to approximately 35MW. This project builds on £30 million of investment that has been secured and will help unlock up to £30m more as the network expands into Haringey and down to Hackney. Once the ERF is operational and connected to the network it will initially provide low carbon, affordable heating to 8,000 homes in Haringey and Hackney in addition to the 15,000 homes already planned for connection in Enfield.

London’s climate goals

1.5. When the Mayor came into office in 2016, he set a target for London to become zero carbon by 2050. In December 2018 he declared a climate and ecological emergency and to show further leadership in support of the Paris Agreement he released one of the world’s first climate action plans that was compatible with a 1.5⁰C degree pathway.

1.6. In response to these emergencies the Mayor announced this year his ambition to accelerate his proposed climate action in London by aiming to make London net zero carbon by 2030. This highly ambitious target requires another step change in the scale and speed of proposed decarbonisation in London.

Green New Deal

1.7. Earlier this year the Mayor announced a new £50 million Green New Deal Fund to be spent between 2020 and 2023 to catalyse the delivery of his net zero ambitions whilst supporting local businesses, creating jobs and ensuring a ‘Just’ transition. This project is the first of a number of proposals currently being developed for the Green New Deal Fund that will address London’s climate and environmental issues. The Green New Deal Fund is aligned and will deliver against identified actions in the Green New Deal Mission, established as a priority to support London’s recovery from the pandemic.

1.8. The London Recovery Board’s Green New Deal mission is focused on tackling the climate and ecological emergencies and improving air quality whilst doubling the size of London's green economy by 2030 to accelerate job creation for all. Three themes have been identified for focusing action and these are: Decarbonising the Built Environment; Transport and the Public Realm; and Green Foundations (financing, sustainable behaviours and business support).

1.9. Projects supporting district energy networks have been identified as an ‘Action’ area under the ‘Decarbonising the built environment’ theme. In addition to supporting the provision of fairly-priced low carbon heat, heat networks will help address wider environmental, social and economic issues in the city, including improving air quality, helping to alleviate fuel poverty and creating economic growth and local employment associated with the development, construction, operation and maintenance of these projects.

1.10. District energy networks form part of the wider ‘Geothermal’ sub-sector and its supply chain and in 2017/18 the London Low Carbon Market Snapshot estimated that it was worth just over £4bn in sales, and employed more than 27,000 people across over 1,300 companies. The project could create around 36 jobs during the construction of the network with another 36 associated with the planned Haringey and Hackney extension. The Heat Networks Industry Council estimates that approximately 1.2 jobs are created per £1m invested in the construction of a heat network.

Green recovery

1.11. The London Recovery Board has been established by the Mayor of London and London Councils to lead London’s recovery from the impacts of the coronavirus pandemic. The Board aims to address the economic, social and health impacts caused by the coronavirus pandemic and deliver a fairer, cleaner, and greener London.

1.12. The London Recovery Board has agreed nine missions, including a Green New Deal mission, to drive a fair and green recovery in London. These missions include activities that will cover social, economic, health and environmental issues.

1.13. The Green New Deal mission will tackle the climate and ecological emergencies, improve air quality, and aim to double the size of London’s green economy by 2030 as tackling environmental issues catalyses market opportunity and job creation for all.

Climate ambitions

1.14. The Mayor has set a target for 15 per cent of London’s energy demand to come from clean, renewable and district energy by 2030. District energy networks will actively contribute to achieving the Mayor’s recent commitment to London being net zero carbon by 2030. This will require the development and on-going expansion of key strategic networks alongside the development of replicable business models for optimising connections to those networks.

1.15. Heat makes up nearly 50% of London’s energy demand and around a third of its carbon emissions and how we decarbonise heat supply will have a considerable impact on the cost and rate at which London is able to meet its net zero targets.

1.16. Current energy demand met from local district energy (DE) schemes is estimated at 2 per cent (London Environment Strategy, 2018) and without considerable intervention to support and stimulate the market as it matures, any net zero target is unlikely to be met.

Market barriers and policy

1.17. There are still a range of market barriers to the development of district energy networks that justify public sector intervention, including: an unregulated market, high initial development and capex costs, and design and construction standards.

1.18. District energy networks continue to rely on public sector leadership and investment for delivery of schemes due to three fundamental characteristics: i) the long lifetime of the network assets and infrastructure that the private sector is not always willing to commit to; ii) the need for long term heat demand (typically, at least initially, secured through public sector connections); and iii) access to low-cost long-term public sector financing, which will ultimately help keep the costs of heat provision low.

Mayoral support

1.19. There is a strong rationale for GLA intervention in the district energy market to catalyse and support growth in the market, support the construction and expansion of new and existing networks and, ultimately, help ensure that those networks are low carbon and contributing to London’s decarbonisation targets.

1.20. This project is designed to catalyse the development, expansion and decarbonisation of a multi-borough district energy network that will use the waste heat from municipal waste thermal treatment at the new Edmonton Energy Recovery Facility in the London Borough of Enfield. It will help to mitigate the impact of the Edmonton Energy Recovery Facility and play a leading role in the decarbonisation of buildings in the London boroughs of Enfield, Haringey and Hackney. This will actively contribute to each of their decarbonisation targets and responds directly to their climate emergency declaration.

1.21. This type of partnership between the London boroughs and the Mayor highlights one of the important catalytic roles the Mayor can play in supporting the establishment and expansion of district energy networks across London as part of his commitment to being zero carbon by 2030. This project can establish a blueprint for establishing low carbon multi-borough district energy networks sharing large-scale waste heat sources, such as waste-to-energy plants, sewage treatment plants or tube ventilation shafts.

North London District Energy Network

1.22. This proposal will catalyse the development and expansion of an area-wide district energy network (in this case a multi-borough network across the LBs of Enfield, Haringey and Hackney) that will initially be delivered by Energetik, the London Borough of Enfield’s energy company.

1.23. Energetik has successfully secured £30m from the Government’s Heat Network Investment Project (HNIP) and the Mayor’s Energy Efficiency Fund (MEEF) to construct a district energy network in Enfield. This network will connect to the Edmonton Energy Recovery Facility (ERF) once it is operational in 2026 and is currently designed to only take up to 35MW of heat. This network design will currently supply buildings in the London borough of Enfield, starting with Meridian Water, and will only have between 5-10MW of surplus heat that could be available for the London boroughs of Haringey and Hackney.

1.24. The first phase of the Enfield network, as currently designed, will start construction at the beginning of 2021 and connect the Edmonton Ecopark with the heat network supplying Meridian Water. It will then extend west from Meridian Water to Fore Street, where it could branch off to Haringey and Hackney, and then onwards to connect up with the Arnos Grove heat network.

1.25. Haringey and Hackney’s growing ambitions for establishing district energy networks in their respective boroughs means that the 5-10MW of surplus heat available in the network from the current design is not sufficient to meet their expected demand. They will be able to use at least 20MW of heat and sizing the pipework from the EcoPark to Fore Street so that the network can supply that volume of heat will not only enable them to decarbonise far greater numbers of buildings but by constructing a network able to take up to the 60MW of heat that could be available from the Edmonton ERF it will help optimise the efficiency of the ERF process.

1.26. This project proposes to provide up to £750,000 to increase the pipe-size for the current pipe-work design between the Edmonton ERF and Fore Street that will start to be constructed from early 2021. This will allow greater volumes of heat to be available for the Enfield element of the network as well as upwards of 20MW of heat able to be supplied from Enfield into Haringey and on to Hackney. Potential connections in Haringey include Wood Green, Tottenham Hale, St Anne’s and Broadwater Farm; and in Hackney would include Woodberry Down. The Green New Deal funding will help unlock this further investment opportunity of up to £30 million.

1.27. This is a one-off opportunity to design a network that is capable of utilising up to the 60MW of heat that could be available from the Edmonton ERF. The increased sizing of the heat main must happen now, as the pipework is currently being specified and will start construction in early 2021, or the opportunity will be lost. The cost of adding an additional pipe alongside the first one at a later date to take the remaining heat would be technically very difficult, disruptive and very expensive compared to this proposal.

1.28. The three-borough partnership is mature and already working actively together to develop applications for funding from the government’s Heat Network Investment Project to support the further development of the heat network, through Haringey and into Hackney.

1.29. This project will help ensure that there is a heat network sized to take up to the 60MW of waste heat that could be produced by the Edmonton ERF during electricity generation. This will benefit the efficiency of the Edmonton ERF plant by optimising heat utilisation as well as decarbonising local homes and business by supplying their local heat network with the low carbon waste heat. The Mayor has set an initial Carbon Intensity Floor (CIF) target for Edmonton ERF of 400g CO2e/kwh electrical and intends to set a tighter standard of 300g CO2e/kwh electrical by 2030. The proposed increased sizing of the heat main is essential to maximise the amount of waste heat from the plant that could be used in the network, leading to greater plant efficiencies and enabling the ERF to meet the Mayor’s tighter CIF target. Utilising waste heat from the Edmonton ERF that is ‘nearly zero carbon’ (15g CO2/kWh) will lead to at least an 80% reduction in carbon emissions compared to heat supply using gas boilers and/or gas-fired CHP.

1.30. This project will also test approaches to retrofitting heating systems in at least 10 existing terrace houses and a block of 20 flats so that they can be capable of connecting to Enfield’s heat networks. This will provide essential intelligence and insights into identifying the best way to connect various housing typologies to their local heat network. Connecting these property types will become an increasingly important part of the Mayor’s decarbonisation programme for existing buildings by integrating the retrofit of building fabric to improve energy efficiency with the retrofit of their heating systems to decarbonise their heat supply.

1.31. This will deliver heating system retrofits in existing residential stock for connection to heat networks up to the value of £450,000. The work will start with engagement of communities and residents in early 2021 to identify the residential buildings that will be retrofitted and work will begin in April 2021.

1.32. The Mayor’s 1.5C degree climate action plan estimates that there needs to be over 770,000 homes connected to heat networks, including connections to over 440,000 existing buildings to achieve net zero, supplying approximately 20% of London’s heat demand which is about 10.55 TWh. The Institute for Public Policy Research (IPPR) estimate that in the construction of heat networks around 1,493 jobs are created per TWh and so for London the opportunity could create 17,000 jobs over the next decade.

1.33. This project will make an important contribution through the 8,000 plus initial connections to the Enfield/Haringey/Hackney network, the momentum around district energy networks and the knowledge gained by retrofitting existing housing typologies for connection to heat networks.

2.1. Objectives for the District Energy Network component:

• to size the heat network pipe from the Edmonton ERF in the EcoPark to Fore Street to carry sufficient heat to supply Palmers Green and Arnos Grove networks as well as providing at least 20MW of heat for supply into Haringey and Hackney;

• to enable CO2e savings in Haringey and Hackney of at least 5,000 tonnes per year once the network is constructed and the Edmonton ERF is operational; and

• to help optimise the operation of the Edmonton ERF once built by constructing a network that can take up to 60MW of heat.

2.2. Outcomes for the District Energy Network component:

• a district energy network capable of utilising up to 60MW of waste heat from the Edmonton ERF once it is operational;

• creation of a ‘nearly zero carbon’ heat network in Enfield once the Edmonton ERF is operational;

• the Edmonton ERF is technically able to meet both its current and future Carbon Intensity Floor (CIF) targets;

• at least 20MW of waste heat from the Edmonton ERF is available in the Enfield network for supplying to homes into Haringey and Hackney;

• opportunity created for a strategic multi-borough district energy network from Enfield through Haringey and into Hackney that is ‘nearly zero’ carbon once the Edmonton ERF is operational; and

• the Haringey and Hackney branch of the network to connect up to 8,000 homes once the Edmonton ERF is operational.

2.3. Objectives for the ‘retrofitting homes for connection to a district energy network’ component:

• retrofit the heating systems in at least 10 terraced houses for connection to a local heat network;

• retrofit the heating systems in at least 20 flats (made up of one or more blocks) for connection to a local district energy network;

• to investigate what the optimum technical and financial approaches are for connecting the identified housing typologies to a local district energy network; and

• to produce an evidence and knowledge base for supporting the connection of existing housing stock to a local heat network.

2.4. Outcomes for the ‘retrofitting homes for connection to a district energy network’ component:

• a minimum of 10 terraced houses connected to a local network;

• a minimum of 20 flats connected to a local heat network;

• provide a potential pathway to zero carbon for existing housing stock by understanding technical and financial elements of connecting to a local network with a decarbonisation strategy; and

• develop a report, a ‘how to manual’, and deliver a ‘how to’ seminar and video for London boroughs wanting to understand how to connect existing housing stock to their local networks.

3.1. Under s149 of the Equality Act 2010 (the Equality Act), as a public authority the GLA must have due regard to the need to eliminate discrimination, harassment and victimisation, and any conduct that is prohibited by or under the Equality Act; and to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not.

3.2. The Mayor’s Equality, Diversity and Inclusion Strategy sets out how he will work to create a fairer, more equal, integrated city where all people feel welcome and able to fulfil their potential. Equality, diversity and inclusion are subsequently enshrined within the GLA’s strategies, programmes and activities.

3.3. The GLA will ensure that (as part of its on-going legal responsibility to have due regard to the need to promote equality, in everything it does, including its decision-making), barriers are removed that may prevent those with protected characteristics benefiting from the project. This will require the GLA, the London Borough of Enfield and Energetik and contractors supplying services to identify those protected groups who could benefit from this project and determine whether barriers exist to them benefitting and take measures to remove those barriers.

3.4. This project proposes the provision of a grant to LB Enfield to deliver the network and the retrofitted homes. The funding agreement associated with this project and our on-going involvement in it will ensure our equalities duty is met by the LB Enfield who as a public sector organisation have similar duties to the GLA.

3.5. The GLA Environment Unit commissioned an Integrated Impact Assessment (IIA) on the draft London Environment Strategy. This evaluated the social, economic, environmental, health, community safety and equality consequences of the strategy's proposed policies to ensure they are fully considered and addressed. A post-adoption statement showing how the IIA influenced the final strategy and Equality Impact Assessment (EqIA) report has been published: /programmes-and-strategies/environment-and-climate-change/london-environment-strategy.

a) Key risks and issues

b) Links to Mayoral Strategies and priorities

4.1. This project has direct links to the London Environment Strategy, the draft New London Plan and the Economic Development Strategy. Each of these strategies have been consulted on and have policies aimed at growing the number and coverage of district heat networks as well as supporting their role in the energy system and its decarbonisation as part of transitioning to a low carbon circular economy.

4.2. The project also has clear links to Mayoral priorities around the Green Recovery, the Green New Deal and a Just Transition.

4.3. London Environment Strategy

OBJECTIVE 6.2 - Develop Clean and Smart, Integrated Energy Systems Utilising Local and Renewable Energy Resources

Policy 6.2.1 Delivering more decentralised energy in London

• Proposal 6.2.1.a Help implement large scale decentralised and low carbon energy projects, including stimulating demand from the GLA group

Policy 6.2.2 Planning for London’s new smart energy infrastructure

• Proposal 6.2.2.b Undertake demonstration project and trials to improve London’s energy systems

• Proposal 6.2.2.c Investigate the potential for further smart, flexible energy system demonstrators and pilots where Londoners can help manage demand

4.4. Economic Development Strategy

Policy 4.3 INFRASTRUCTURE - London’s economy relies on a whole range of infrastructure, in addition to transport, to function effectively; including energy and water networks, sewerage and drainage systems, waste facilities and digital infrastructure.

More localised and renewable energy - The Mayor’s target for London to be net zero carbon by 2050 will require considerable investment in London’s buildings to reduce energy demand and in London’s energy system, including retrofitting existing building stock to reduce energy demand. It will also require investment in London’s energy supply system to exploit opportunities for using local and renewable energy sources as part of creating a smart integrated energy system that can deliver secure, low carbon and affordable energy to London’s citizens and businesses.

Summary of Actions: The Mayor will….

• Help to retrofit London’s building stock and create a smarter, more integrated energy system that will help deliver zero carbon heat and power to meet consumer residual demand by 2050;

4.5. Draft New London Plan

Policy SI 3 Energy infrastructure

• SI 3 C Development Plans should:

1) identify the need for, and suitable sites for, any necessary energy infrastructure requirements including energy centres, energy storage and upgrades to existing infrastructure

2) identify existing heating and cooling networks, identify proposed locations for future heating and cooling networks and identify opportunities for expanding and inter-connecting existing networks as well as establishing new networks.

• 9.3.1 The Mayor will work with boroughs, energy companies and major developers to promote the timely and effective development of London’s energy system (energy production, distribution, storage, supply and consumption).

4.6. Green Recovery - By investing in energy infrastructure that will support the decarbonisation of heat and subsequently London’s buildings. This will also help create market opportunity for businesses in the sector as well as jobs in the sector. The Mayor’s 1.5C degree climate action plan estimates that it will require an investment of around £5.6bn creating substantial jobs opportunities.

4.7. Green New Deal and Just Transition – This project will address climate change and deliver against decarbonisation targets whilst creating demand in the sector and market opportunities for business and the supply chain. It will also develop opportunities for local job creation and apprenticeships. There is massive jobs potential of up to 17,000 jobs if we are to hit our zero carbon by 2030 target as we are aiming to have up to 20% of London's heat demand met by district energy and currently we only have about 3%. There is clearly a lot of scope for job creation and skills development as the number of projects delivered in London increases to help meet these targets.

c) Consultations and impact assessments

4.8. This project has been developed with the aim of developing and delivering a strategically important project that will contribute to the direct delivery of the Mayor’s London Environment Strategy, his Economic Development Strategy, his draft New London plan and London becoming zero carbon by 2030.

4.9. The London Environment Strategy and the Economic Development Strategy were both widely consulted on and in each the Mayor commits to developing district energy networks.

4.10. Specific elements of this project have been developed in response to the issues and challenges that partners, and stakeholders have raised in our discussions with them on developing district energy networks.

4.11. An Impact Assessment was undertaken for both the London Environment Strategy and the Economic Development Strategy and its associated programmes. As this bid will help deliver these objectives the original impact assessment is still relevant to the project. There will be appropriate levels of Impact Assessment and stakeholder consultation in relation to the design and construction of district energy networks.

4.12. The draft new London Plan has also been widely consulted on with numerous consultation responses considered in framing the final proposed London Plan that has also been through the subsequent Examination in Public in January 2019.

d) Conflicts of interest

4.13. There are no conflicts of interest to note for any of the officers involved in the drafting or clearance of this decision form.

5.1. Mayoral approval is sought for grant funding up to £1.2m to Enfield Council for supporting the development of their heat network and connections to it. The London Borough of Enfield and Energetik, its wholly owned energy company, will provide £30m to develop the network.

5.2. The grant will be made up of:

• £750,000 for the over-sizing of the heat network between Edmonton Eco Park and Fore Street so that it is capable of supplying heat to its proposed Enfield connections whilst having at least 20MW of surplus heat to supply on to Haringey and Hackney; and

• £450,000 for the retrofit of heating systems in houses and flats and subsequent connection to the local heat network.

5.3. Part of the grant will be paid upfront to Energetik to kick start the project. The grant agreement will also include milestones at which money can be clawed back if they are not met. A programme schedule will be agreed with Enfield Council in the Grant Agreement.

5.4. This project is the first from the Mayor’s £50m Green New Deal programme, with £10m ringfenced and available for use in 2020-21 financial year. Of the £10m, £1.2m is being sought in this decision.

5.5. The programme is due to start in December 2020 and will be completed in the 2021-22 financial year. All expenditure will take place in 2020-21 financial year, with the estimated budget profile over quarters 3 and 4 as shown below:

Powers

6.1. The foregoing sections of this report indicate that the decisions requested of the Mayor fall within the statutory powers of the Authority to promote and/or to do anything which is facilitative of or conducive or incidental to the improvement of the environment within Greater London and in formulating the proposals in respect of which a decision is sought officers have complied with the Authority’s related statutory duties to:

(a) pay due regard to the principle that there should be equality of opportunity for all people;

(b) consider how the proposals will promote the improvement of health of persons, health inequalities between persons and to contribute towards the achievement of sustainable development in the United Kingdom; and

(c) consult with appropriate bodies.

6.2. In taking the decisions requested of him, the Mayor must have due regard to the Public Sector Equality Duty; namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010, and to advance equality of opportunity between persons who share a relevant protected characteristic (race, disability, gender, age, sexual orientation, religion or belief, pregnancy and maternity and gender reassignment) and persons who do not share it and foster good relations between persons who share a relevant protected characteristic and persons who do not share it (section 149 of the Equality Act 2010). To this end, the Mayor should have particular regard to section 3 (above) of this report.

Funding

6.3. The proposed grant of up to £1.2m to the London Borough of Enfield (“Enfield”) may be viewed as a conditional gift rather than a contract for services and supplies. The officers are reminded of the need to comply with the requirements in section 12 of the Authority’s Contracts and Funding Code as regards the provision of the funding. Furthermore, the officers must ensure that an appropriate funding agreement be put in place between the Authority and Enfield before any part of the funding be paid.