Mayor plans move to get GLA Group running on renewables

• Mayor announces move to switch GLA Group to more renewable energy and invest in new power generation infrastructure such as wind and solar in the UK.
• TfL is pioneering this London-wide change, with the first procurements commencing shortly for up to 20 per cent of its energy to come solely from renewable sources.
• Ground-breaking new approach to financing being explored so public and private investors can help fund London’s green future.

The Mayor of London, Sadiq Khan, has today outlined plans for a major move to switch Transport for London – the capital’s biggest energy consumer – and the Greater London Authority (GLA) group to actively support renewable power over the next decade and to invest in building new renewable power infrastructure such as wind and solar farms.

London has an ambitious target to become a zero-carbon city by 2030. By changing the way electricity is supplied, we are seeking to move towards a greater use of renewable energy as a key measure in helping tackle the climate emergency and supporting London’s green recovery from the coronavirus pandemic.

A programme of work is now underway to procure renewable Power Purchase Agreements (PPAs). These are long-term contracts direct with energy generators which guarantee energy is supplied by renewable energy sources such as wind and solar power, rather than a mix of power generators that emit carbon into the atmosphere.

Work is underway to develop an innovative financing solution that would be used to fund the building of new wind and solar farms. This would involve creating a fund for public and private investors to invest directly into new renewable projects, which in turn supply energy to the GLA Group. The fund is anticipated to be a highly competitive and innovative structure with strong appetite from investors providing an opportunity for renewable developers to access bespoke funding for renewable assets in the UK.

Transport for London (TfL) will shortly begin procurement for its first PPA, and subject to securing a new financial agreement with Government, will enter into a PPA covering up to 10 per cent of its annual electricity use. Once procured, this would provide guaranteed renewable power to TfL from Spring 2022. Another PPA covering a further 10 per cent will specifically look to secure renewable generation from ‘new build assets’ and therefore support the wider UK economy by creating green jobs in construction and operation. By agreeing in 10 per cent ‘blocks’, TfL can also benefit through being able to learn and adapt as the renewable market evolves.

TfL is one of the largest consumers of electricity in the UK, with a requirement for 1.6TWh per year, equivalent to the electricity consumed by around 420,000 homes* or 12 per cent of homes across London. All passenger rail services operated by TfL are electrically powered and, as part of the London Environment Strategy, TfL has been set the goal of achieving a zero-carbon railway by 2030.

Subject to a successful procurement route being developed and agreed, further tranches of energy purchasing by the GLA Group, linked to a financing offer, would subsequently be brought to market throughout the next decade, building on the approaches TfL is taking this year, with the aim that 100 per cent of the GLA Group’s power demands are from renewable sources, helping to drive more investment in new renewable energy infrastructure by 2030.

Mayor of London, Sadiq Khan, said: “As one of the single biggest consumers of energy in London, it is important that TfL leads the way on green energy. This is a vital step towards the aim of the wider GLA group and London becoming zero-carbon by 2030. This work to secure cost-effective and renewable energy will play a key role in accelerating action on the climate emergency and London’s green recovery. Covid-19 has had a devastating impact but as we recover we want to make sure that we build a better, greener and more equal city.”

Chief Safety, Health and Environment Officer at TfL, Lilli Matson, said: “As one of the largest electricity consumers in the UK, we are absolutely committed to doing what we can to decarbonise London through clean, renewable energy. TfL is already a world leader in many environmental initiatives and this forthcoming procurement for 20 per cent of our power to come from renewable energy forms a major first step in our quest to make all our services powered this way by 2030.”

Chief Executive at the Association for Renewable Energy and Clean Technology, Dr Nina Skorupska, said: “It is excellent to see the pushing forward of plans to power the GLA group with renewable energy. The proposed financing mechanism is an exciting opportunity to fund the development of more renewable capacity, thereby helping to grow the UK renewables sector and support green jobs across the UK.”