Sheffield The Decentralised Energy City

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Nov 21, 2013 (3 years and 6 months ago)

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Sheffield


The Decentralised Energy

City






Enabling Low Carbon Growth in the 21
st

Century



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This paper sets out Sheffield’s ambition to be the UK’s first decentralised energy city.
The proposition set out here is led by the City Council in partnership with E.ON,
bringing together a strong public/private partnership approach.


Our aspiration is f
or Sheffield to be renowned as a thriving low carbon city where our
residents and businesses are actively empowered to reduce their own impact on the
planet’s resources, and are seen as leading the UK in combating harmful climate
change.


As key stakehold
ers in the City, both the City Council and E.ON are committed to
working in partnership to realise this plan.

E.ON’s vision focuses on people, society,
climate and customers

and is well aligned to the ambitions of the City Council’s
agenda to provide peopl
e with real choices through devolution and localisation
.
Together we believe

energy must be affordable, secure in the long
-
term
,

and
increasingly lower carbon. Meeting these three objectives simultaneously is perhaps
one of the greatest challenges of the 2
1
st

century.


It is recognised that the City’s environmental quality has improved significantly since
our proud industrial past, but there still remain some urgent challenges ahead. As a
City, through our Carbon Reduction Framework, adopted by Council a
nd the
Sheffield First Partnership in June 2009
,

we have steadfastly committed ourselves to
long term carbon reduction targets in line with overarching UK’s Governmental
targets enshrined legally in The Climate
Change
Act 2008.


To achieve these targets
will require step changes in the way our City goes about its
everyday business. We will also need to plan for greater levels of investment in low
carbon energy generation, low carbon transport and high quality, low energy homes
and buildings. We recognise

this is a long term agenda and that the targets we have
set go beyond the timeframes set in this strategy. Therefore, we set out the actions
needed in the short


medium term set a direction of travel for the longer term.


Our vision is that
In 2020
Sheffield will be:

A City Involving Everyone



A City where everyone
-

residents, visitors, businesses
-

are provided with the
means, information and motivation to reduce their environmental impact and take
an active role in safeguarding the quality of the C
ity for the benefit of themselves
and future generations.



A City where the major organisations are committed to achieving the City’s
environmental objectives and work together to do so.

A City Ready for Future Challenges



We need to plan for a City that is

able to adapt to future changes to our climate, to
reducing availability of oil and gas and to greater demands on fresh water.


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In recognition of the above, we want to be the first decentralised energy city in the
UK to be self
-
sufficient in generating its

own energy where energy is derived from
low carbon sources and emissions are offset and the City meets its short, medium
and long term carbon reduction targets .



W
e want
low carbon business
to

thrive and prosper becoming a centre of
excellence for low ca
rbon and environmental technologies, attracting inward
investment to the city.

A City Treading Lightly



We want to be a City that threads lightly on local and global resources where we
progressively minimise the City’s ecological footprint.



A low emission
city, where our sustainable transport systems are the preferred
choice of travel for our citizens. Where people are given cleaner, quieter, low
carbon travel and transport choices and accessible for everyone.



A city that seeks to capitalise on its green a
nd open spaces by connecting them
with walking and cycling routes, making walking and cycling popular life
enhancing activities that are attractive ways to move around the city for people
and business.

A City of High Quality



A revitalised city centre whi
ch promotes only high quality, energy efficient low
carbon buildings and spaces which value the City’s history and symbolise the
City’s aspirations for the future.



A place with good quality housing for all. A place where all housing is provided
with low ca
rbon sources of energy, and is resourceful in its use of water and
waste services.



A place where everyone has good access to quality, bio diverse, green space,
such as parks and allotments, within a short distance of home



A city that is attractive to the
great many visitors who come here, providing green
and sustainable services to enhance and complement active outdoor lifestyles.


A key objective for the City is to be the first decentralised energy city in the UK.




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Government’s Pos
ition

The Government published its Annual Energy Statement in December 2010 which
followed some key announcements in the Comprehensive Spending Review in
October 2010 where there were significant policies and financial commitment made
to support decentrali
sed energy.


The Spending Review agreed over £8
6
0 million funding for the Renewable Heat
Incentive which will be introduced in June next year. This will drive a more than
tenfold increase of renewable heat over the coming decade, shifting renewable heat
f
rom a fringe industry firmly into the mainstream. Feed
-
In Tariffs will continue and will
be refocused on the most cost
-
effective technologies saving £40 million in 2014
-
15.
And all of this activity needs to be considered alongside the essential work to cre
ate
certainty and security for large scale electricity which remains the most important
component of meeting our renewables and carbon targets at the national level.


As part of its commitment to increase use of renewable energy, cut carbon emissions
and
encourage green technology, the Government has published an Energy Security
and Green Economy Bill and confirmed several new initiatives. These schemes have
two main aims; to reduce risk for the consumer and create more money for the
change to a low
-
carbon

economy. Further announcements are expected in the
coming months, but we do know that
the

Bill is designed to change the provision of
energy efficiency measures to homes and businesses, and to secure low carbon
energy supplies and ensure fair competition
in energy markets. Its three principal
objectives are: tackling barriers to investment in energy efficiency; enhancing energy
security; and enabling investment in low carbon energy supplies.


There are four components that form the Bill; The Feed
-
in
-
Tarif
f (FiT) to promote
investment in decentralised power generation from renewable sources; the
Renewable Heat Incentive (RHI) designed to promote investment in decentralised
heat generation from renewable sources; the Green Deal


a funding model to
support e
nergy efficiency investment in homes and businesses; and the Green
Investment Bank.

A summary of the four components is detailed in Appendix B.

Decentralised Energy


Power to the People

We need to help and encourage communities to move to a new low carbon future by
developing larger energy projects that meet the needs of local people and maximise
local opportunities. The demand and enthusiasm is there, and this is an opportunity
to think
beyond pure microgeneration to a whole decentralised system of energy
production.


An Energy Saving Trust survey into consumer attitudes to microgeneration revealed
that 47% of respondents would sign up to a scheme where their heat and power was
provided
from a local community source, such as a local biomass scheme, or water
power project. Community scale energy infrastructure could be, for example, the
same solar thermal panels that we use on our homes


simply more of them used
together to form a solar t
hermal array, providing hot water for a whole building.
Alternatively it could be the same technology, but on a bigger scale


like larger heat
pumps or biomass boilers used for blocks of flats, or combined heat and power

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plants used for hospitals. Using t
hese community or “decentralised” energy
technologies, like district heating networks, can open up new opportunities.


But they also present new barriers and challenges including knowledge and expertise
of delivering projects at a larger scale, and ensuri
ng we have the skills and supply
chain to support this developing market. Developing community energy can be as
simple as a group of residents clubbing together to bulk buy loft insulation (an
essential first step to making our homes as energy efficient as

possible) or solar PV
panels for their houses. Economies of scale like this can spread costs and help those
least able to contribute access the benefits of low carbon and renewable energy.


However, working together can also take on more complex models w
here the
community is involved either partially or completely in the design development and
delivery of energy projects serving a much wider local area. This could be the
provision of heat or power to homes, businesses or buildings which provide
education,

health or local services to the community. In this way communities can
make choices about their society, will be better able to leverage finance, and through
ownership, have a direct stake and profit from those decisions.


As with individual consumers,
many communities remain unaware of the
opportunities both in terms of the technologies available to them and also of owning
and developing projects. Communities, most notably via the Transition Towns
movement, such as Transition Sheffield (
http://www.transitionsheffield.org.uk/
)
are
developing energy strategies to reduce dependence on fossil fuels and maximise
local resources


with many others looking for options to tackle fuel poverty.
Financial incen
tives can play a part, but more is needed to overcome barriers relating
to inertia or consumer behaviour, or to counter misconceptions about complexity and
quality of products and installations.


Developing community energy schemes requires a range of skil
ls within the
community, their local authority and also in the private sector. There are often limited
in availability and result in premium prices being paid. There is a clear need to build
capacity in our communities and offering mentoring and training s
chemes, industry
standards and the mainstreaming of core skills needs to happen for community
energy to expand. The support given to Sheffield Renewables, South Yorkshire
Energy Centre and through the Climate Change Fund has helped begin this process.

The
Role of the City Council

Local authorities have a vital role in shaping their communities to support delivery of
the UK’s long
-
term energy and climate change objectives, and this includes
preparing for, and where appropriate supporting development of commu
nity energy
solutions. The Government has provided local authorities with the opportunity to sell
electricity making it possible to generate both energy and revenue from assets
owned by the Council.


Changes to make the planning system more responsive to l
ocal demands are
anticipated in the forthcoming ‘localism’ bill. This will include opportunities for all new
development to play a role in reducing carbon emissions both on site and across the
wider community.



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The development of most decentralised energy
technologies will at some point
require the involvement of the local authority in a co
-
ordinating and facilitation role


or more directly. It should be noted, however, that this does not necessarily need to
translate into a sizeable resource burden. For e
xample, an important role for a local
authority is heat mapping and energy master planning, which the City Council is well
underway with, in partnership with the University of Sheffield.


Being able to take decisions on long term energy use which affect t
heir communities,
businesses and residents will require the City Council to build an evidence base to
support long
-
term strategic planning, and driving forward development of area
-
wide
energy projects.


The Council has a key role in brokering and helping
co
-
ordinate sales of heat or
electricity to the wider public sector locally, for example where this relates to rail and
road networks, hospitals, universities or schools. They can also help communities
realise their aspirations for community energy project
s, by supporting neighbourhood
plans and projects. To this end, the Council is already fulfilling this role in its support
to both E.ON and Veolia in developing both energy generation and energy
distribution plans in the City Centre and Lower Don Valley.

W
hy Sheffield is Well Positioned to Decentralise

Sheffield has the political commitment

to decentralised energy and carbon reduction
.
As

England’s fourth largest metropolitan area, with a population of
547,000
,
it is a
key player in the UK
economy

and has a

number of key strengths:


1.

Sheffield has a reputation as a solution
-
finding, innovative city with a history of
creative and advanced manufacturing industries

2.

The city has a strong and diverse economy including high tec
hnology
manufacturing with an emerging

and strengthening
low carbon sector,
generating £433m per annum for the local economy.

3.

The City is recognised as a leader in the field of decentralised energy as a
result of its well established city centre district energy network connected to
the Energy

Recovery Facility at Bernard Rd
(The plant can generate up

to
45MW of thermal
energy and

21MW of electrical energy)
and the numerous
smaller scale community heating schemes across the City.

4.

The city also benefits from two large and successful
u
niversities. Sheffield has
big business ambitions in becoming a sustainable, low carbon city.

5.

Sheffield also
has the natural resources
-

its industrial beginnings were built
on the water power its rivers provided and the City has the right characteristic
s
to promote the development of wind energy across the City with w
ind turbines
already operational
.

6.

The City is increasingly adopting solar energy and other micro
-
renewable
technologies, such as ground source heat, small scale wind and hydrogen.

7.

There are

already active social enterprises, community projects and private
sector organisations committed to renewable energy generation in the City,
including organisations such as Sheffield Renewables, a community
-
owned
and Council supported, social enterprise d
eveloping 2 water power projects in
the City.

8.

The City’s planning framework is in place and sets out clear and stretching
policies on carbon reduction.


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9.

Sheffield

has shown real leadership

on the carbon reduction

agenda in the
Core Cities network
working wi
th the Clinton Climate Initiative C40
programme.


Why the need to Decentralise?


With the decline in oil and gas production in the North Sea, the UK
-

in common with
many other developed economies
-

is increasingly dependent on imports to meet its
energy
needs. We currently import approximately 8% (net) of our oil, 32% of our gas
and 70% of our coal
..
.

Overall, energy import dependency is set to rise from 27% in
2009 to 46
-

58% in 2020.

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In the UK
, and in Sheffield,

our energy systems are largely centra
lised

and

reliant on
imported
fossil fuels. The majority of our homes also utilise gas as the main source of
heat within central heating systems. Our transport systems are also almost wholly
dependent on oil.


Sheffield, dependent as it is on national
energy generation and infrastructure, is
vulnerable.

Cities like Sheffield must seek to develop local, sustainable solutions that
meet the needs of the people, communities and businesses they serve.
We
recognise we

must show leadership on this and develop
a

long term plan to achieve
this.

The Technologies


There are a range of low carbon and renewable microgeneration technologies
available at a domestic or small community and commercial scale that support the
decentralised energy agenda.
There are examples

of each of these technologies in
the City
:




Solar photo
-
voltaic panels (PV)



Solar thermal panels



Ground and air source heat pumps



Wind turbines



Hydro (including water mills)



Combined heat and Power (CHP) units



Fuel cells



Heat and power generation
from biomass, bio
-
liquids and biogas including
from anaerobic digestion.

Benefitting the People of Sheffield

Hearts and minds are won more widely as people increasingly

encounter local
generation on their doorsteps, understand

energy better and develop a
sense of
responsibility for their

own energy footprints. Local generation
can act

as a catalyst

for cultural change in the way people regard their own energy

use.

We are already



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DECC’s Annual Energy Statement (July 2010)


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seeing growing acceptance and interest in small scale renewable projects at th
e
domestic and community scale across the City.


Local Leadership and Ownership of

Energy


Decentralising energy would also democratise energy,

providing real opportunities for
local political leadership on

climate change
.
By enabling local action

and empo
wering
individuals and communities as producers,

decentralisation has the potential to bring
about a massive

cultural change in our attitude to and use of energy.


Affordable Energy


In the long run, a decentralised system may also prove cheaper,

cutting t
he need for
investment

in expensive high

voltage

transmission networks.
The benefits can be
passed on to the consumer, reducing lower fuel bills and reduced fuel poverty.


Creating Jobs


The total market value of the
low carbon environmental goods and services
sector for
S
heffield
C
ity
R
egion

is
estimated at
£1,620 million with 326 companies and about
12,240 employees
2
.



Any significant growth in the microgeneration industry will require the support of a
skilled workf
orce. This applies across the building and products sector, not simply to
installation engineers and technicians. This is a significant challenge if the supply
side is to meet the projected growth in the take
-
up of new technologies. The
investment by indiv
iduals and companies will only happen if they have confidence in
the technologies, their design and installation and their maintenance. Recognised,
effective, accessible training needs to be developed, accredited and publicised to
ensure market confidence.

To achieve this at speed we need to build on existing,
flexible, training channels and learn the lessons from other countries with more
mature microgeneration sectors to ensure this investment in skills development
happens in step with market growth.


Whi
lst the need to train and educate trades the UK has a reasonably
starting point
with

over 300,000 heating, plumbing and electrical engineers who could potentially
install microgeneration technologies in the UK. Currently under MCS there are over
1450 regis
tered installer companies which equate to over 10,000 qualified installers
available to work on microgeneration technologies.


By boosting the market for

renewable generation and related technologies, it would
also

stimulate innovation.
E.ON’s Engineering

Academy will provide Sheffield based
engineering companies a tailor
-
made training solution to gain the necessary skills



2

Low Carbon and Environmental Goods and Services Sector Analysis for Sheffield City Region
,
October 2010.



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and qualifications to access the significant "low carbon economy" opportunities such
as micro generation installation skills and energy

management.



Increasing Resilience


Decentralised energy is
less vulnerable to massive system failure as a result of
breaks in supply,
sabotage

or extreme weather

and is therefore more reliable
.

It can
mean we can expect greater reliability in the longer

term.


Promoting Local Choice


Decentralisation of the energy system would also enable

communities to identify and
make use of optimum local

solutions, increasing the diversity of energy sources in
use and

reducing dependence on any one source, along with

the

vulnerability that
that entails. Different DE technologies will

present the best option at different
locations, and for different

applications.

To help support activity at the local level, the
Council launched
its

Climate Change Fund which provides sm
all grants for innovative
ideas which aim to counter climate change.
Over the l
ast
two
year
s

the Council
has
made
significant funding

available for each of the seven Community Assemblies to
support local community
carbon reduction
projects
, including
decentralised energy
projects such as solar photovoltaics
.


Encouraging Everyone to take R
esponsibility


When energy generation is devolved either to the householder

or the community, and
energy consumers become their own

producers, then these consumers a
re
incentivised to pursue

significant reductions in energy demand in order to minimise

the capital and running costs of their plant. This interaction

between production and
consumption at a local level has the

potential to drive down emissions and energy
b
ills radically

provided other support measures are put in place, such as energy
efficiency advice and guidance
.

Energy made in Sheffield

To realise these benefits there are a number of key enabling actions that the City of
Sheffield is committed to. These
include:


1) Build new medium/large scale energy plants


We will work with the private sector and with social enterprises and
communities to develop local energy generation.


For example, f
urther investment in large scale energy generation is planned in
the east of Sheffield with the development of a 25MW waste wood energy
plant by E.ON, an investment of circa £100m.
The Energy Partnership’s first
significant piece of work is to develop a bu
siness case
to extend the heat
network from the p
lanned

biomass energy
plant at Blackburn Meadows
along

the Lower Don Valley, a large regeneration area in the Sheffield / Rotherham
conurbation bringing genuinely low carbon infrastructure to support the fut
ure
prosperity of the city.



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2) Solar energy on all homes, schools, offices


We will make it easier for all buildings in the City to use micro
-
renewables
such as solar in homes, schools, factories and offices by working with the
private sector to develop s
chemes
.
The Council’s ‘Solar City Project’ outlines
plans to significantly boost the use of photovoltaic panels (PV) in Sheffield
across the Council estate, schools, homes and partner buildings. Alongside
this,
o
ur p
lanning policies already support and
promote this but we commit to
developing large scale procurement led by the City Council.



3) Anaerobic Digestion


Anaerobic digestion (AD) is a proven renewable energy and waste
management technology, whilst also being a contributor to reducing
greenhous
e emissions by capturing methane from decomposing materials. It
can be used with food waste, agricultural material (manure/slurry) and sewage
sludge. AD also produces biogas and some treated material can be used as
fertiliser. In short, AD has the potentia
l to help with climate change, renewable
energy, waste, crops and green jobs. In its capacity as a producer of
renewable energy from waste, AD is integral to the desire to manage waste in
the most carbon and environmentally friendly way.


The Department of

Environment, Food and Rural Affairs (Defra) has recently
published an implementation plan for action by Government and public/private
sector partners to accelerate the uptake of Anaerobic Digestion (AD) in
England. The plan is based on recommendations fro
m the Anaerobic
Digestion Task Group, and partnership between the public and private sector
is seen as essential.


For these reasons, the Council’s Corporate Plan commits us to the
development of anaerobic digestion in the City. We recognise the important
facilitating role we can play in identifying both feedstock and gas generation in
the City and, by working with the private sector, find ways in which we can
create the AD infrastructure needed to benefit the City.


The
City Council

has undertaken a prelim
inary study of potential feed stocks
from food waste and identified potential demand for biogas across major fleet
operators.

We have identified potentially 30
-
40,000 tonnes of organic waste
that could be diverted from commercial waste streams towards AD
t
echnologies from a number of different sources.

We have identified a number
of sites where bio methane generation is possible using existing feed stocks
,
we have committed to demonstrating the use of gas fuels in commercial
vehicles, and we are working act
ively with existing developers and inward
investors.


4) Wind energy


Sheffield has potential for wind energy both at the micro and community scale.
There are more limited opportunities for larger scale wind, however, working
with our City Region partners
, we are committed to the development of wind

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energy generation.

The City Council has identified some sites with potential
and further feasibility studies will be needed to determine viability and how
local communities might benefit.


5) Biomass


Sheffield

has already

developed, over a number of years, a large number
(160+) combined heat and power (C
HP
)

schemes across the City.
The
Council will shortly open its largest biomass facility at Greenland Rd, Attercliffe
providing 3MW of heat generation.

There are

three medium scale CHP plant
linked to community heating networks and two smaller ones within sheltered
housing schemes. We have also developed biomass community heating
networks in partnership with the private sector and explored the use of
innovative co
ntainerised biomass to deliver one of the cleanest biomass plants
in the country
.
To support the development of biomass infrastructure in the
City, the Council has develop
ed

a biomass store at Kettlebridge to ensure a
secure supply chain of woodchip to sup
port the existing biomass community
schemes
across the City,
in
cluding

Burngreave

and forthcoming biomass
boilers

in the new school schemes being developed under the ‘Building
Schools for the Future’ programme in Sheffield. Alongside this, we are
working
with E.ON in developing a large scale (25MW) biomass plant at
Blackburn Meadows.


6) District heating and cooling


The City recognises the importance of developing decentralised heating and
cooling networks to enable the long term sustainability. We

have

b
een doing
this for a long time and we are
now
working with international experts at The
University of Sheffield to identify current and future heating and cooling
demand in the City
. We will produce a ‘heat map’ of the City that will inform
where and how t
he City Council can direct investment from the private sector
to further extend our district energy networks in the City
. This will provide a
comprehensive investment plan which we will use to develop existing and new
networks across the City, helping to t
ackle fuel poverty and reduce carbon
emissions.


7)
Insulating Homes and Buildings


A ‘whole house’ approach is necessary to maximise the effectiveness of
energy efficiency and other low carbon measures in the residential market.
The forthcoming ‘Green
Deal’ is proposed to deal with this challenge.


In

addition to the City Council’s successful Affordable Warmth programme, w
e
have identified opportunities for the
City Council

to rapidly progress
investment in the City’s housing stock. The
City Council has

identified 5
schemes which are strong contenders
for
Community Energy Saving
Programme

funding
. Strong pressures on our capital programme lead us to
focus mainly on projects that already had SCC funding available. There are
numerous applicable areas withi
n Sheffield that qualify for CESP above and
beyond the 5 focused areas currently under review. We are continuing the

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detailed evaluation and funding options available for the remaining areas
throughout autumn 2010.


The City’s housing stock needs massive
investment if we are to achieve the
improvement in carbon performance that we need. Tackling the demand for
energy is the logical starting point and we have delivered an award winning
free insulation programme right across the City which will continue in 2
011/12.


The key challenge is here is affordability and capital investment, particularly in
‘hard to treat’ homes where measures are more expensive and technically
more challenging.


We believe a solution to this will be create that culture change in the
City,
using decentralised energy, such that everyone is incentivised to invest in
energy saving measures. Through generating local energy and generating
profit we will reinvest into measures that will reduce energy demand.


We propose to support change cha
mpions in communities
who will be
specially trained to communicate energy saving advice to the rest of the
community. These champions will receive formal training and accreditations
that can be used to help find them permanent full time employment within t
he
industry enhancing the low carbon economy.


8) Develop low carbon transport (electric, gas, hydrogen)


Sheffield
City Council

is committed to promoting low emission transport and
with partner authorities in South Yorkshire developed a plan to accelerate

the
uptake of both gas and electric vehicles.



We plan to make Sheffield a low emission city with investment in electric and
gas vehicles in the short term, and to hydrogen in the medium term.



We will do this by working with the private sector to inves
t in the refueling
infrastructure needed to support the switch from petrol and diesel and by
promoting the Government’s subsidy for electric vehicles.

The City

Council

has been successful in the development of gas vehicles in the City, working in
partnersh
ip with Mercedes, Volkswagen, Chesterfield Cylinders, British
Oxygen Company, Veolia and partners in the public and private sector. We
have built gas refueling facilities to support this.


We are working with other authorities and private sector partners i
n Yorkshire
to accelerate the investment needed in electric vehicles in the City.


In turn, the Council and its partners are committed to low emission fleets
having

run a number of demonstrator projects for electric hybrid, electric and
gas vehicles with p
ublic and private sector fleet operators to build confidence
in the market place.

With our strategic waste management partner, Veolia, we
are

running the largest UK fleet of gas powered waste

collection

vehicles.





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9) Engagement


Taking people with us and

building capacity within communities is central to
our ambition. We have already outlined a number of measures in this
document about how we will bring people closer to energy generation and use
and incentivise behaviour.


To augment this,
E.ON is committ
ed to creating a state
-
of
-
the
-
art educational
centre for the benefit of the Sheffield City community, universities, colleges
and local schools. The centre point for the educational energy experience
could be at the E.ON Blackburn Meadows Bio
-
Mass Energy C
entre, co
-
located so that students can experience the real life observation of this energy
conversion technology.



We are
committed to

a comprehensive sustainable development package
using our established EcoSchools programme
and
E.ON’s educational tools

and resources are tailor
-
made for school children and college students alike.

Students of all ages will have the chance to study and increase awareness
around the global carbon issues and how modern technologies are being used
to improve the sustainable g
eneration of energy.


Building upon the lifelong learning education and training centre, E.ON will
create a case study of refurbished buildings/houses that have undergone
specialist energy
-
saving retrofit measures through the "community energy
savings pr
ogram". These buildings/houses will be monitored to measure
essential live energy data in use and will compare, contrast and create
learning essential to tackle the future decisions necessary for
refurbished/retrofitting existing building stock as well as
understanding how
future new build schemes are best designed.


The community energy learning zone will also include public buildings such as
leisure centres/offices etc. The learning material gain from such a live case
study will be invaluable to those con
struction sector/educational sectors and
will provide opportunities for training in the field.


How We’ll Do It


To achieve this ambitious plan, the City Council will lead the strategic development of
our decentralised energy plan. We will do this by:


1)
Bringing together the public sector and the private sector

2) Delivering locally through communities (co
-
operative schemes, etc)

3) Re
-
investing in renewable energy schemes


Bringing together the public sector and the private sector


Sheffield City Counci
l
believes

it is
well

placed to
co
-
ordinate

the strategic
development of the
i
nfrastructure
for

a low carbon city, particularly energy and

14

transport infrastructure
, but that it can only do that with the co
-
operation and
collaboration of partners in the Cit
y
.


The delivery of projects will only be achieved in partnership with the private sector.
With severe constraints on public expenditure in the near term, the successful
delivery of city wide decentralised energy will require the creation of a strategic
p
artnership which, working collaboratively will leverage and attract the necessary
investments and skills.


The Council
is

committed to
bringing together the leading organisations in the city to
provide leadership in addressing the issues of energy and carb
on

to create a
Sheffield Energy Partnership made up of the major energy consumers across the
City, including our universities, hospitals, and industry, as well as those organisations
who can provide solutions, such as E.ON and Veolia.


The City Council will lead and champion the vision and own the responsibility to
manage the many multiple stakeholders across the City, taking a lead role in the
master planning of energy networks across the City.


In addition,
we will

engage fully with a strategic energy partners, including the local
Distribution Network Operator (YEDL) in the development and delivery of the Smart
Grid vision. E.ON and the
City Council

have established a dialogue and a
commitment to working together to

achieve long term carbon reduction within the
City.


A distinct benefit of a partnership is the strengthening of the economy through the
promotion, retention and creation of local jobs. The partnership will endeavour to
resource all projects with local pe
ople wherever possible and invest in the training
requirements to fill any identified skills gaps. Most importantly, the partnership
approach will ensure that the intelligence and knowledge gained through the
implementation of projects is retained with the

people of Sheffield. The
partnership
approach truly represents the community and will bring efficiency, best value and
focus to the challenge of carbon reduction
.
The partnership will develop its own work
programme that draws together the asset and estate

management strategies of the
individual organisations

and works in partnership to deliver energy systems that work
across the City
.


T
he City Energy Partnership
is well placed to deliver against the key ambitions for
carbon reduction across the emerging

Local Enterprise Partnership (LEP). The LEP
has a key responsibility to support the de
-
carbonisation agenda for the local region

and the establishment of the

City Energy Partnership
will help
to deliver this agenda
for the City and the City Region
.


Delive
ring locally through communities


We will support communities in developing local solutions to energy generation and
encourage the development of co
-
operative models where community benefit can be
maximised with profit generated from energy projects being

invested back in to
community programmes. This will further strengthen the appetite for strategic thinking
at a local scale.


15


Where the community cannot sustain the investment on its own we will facilitate the
development of partnerships between local com
munities and the private sector and
encourage social enterprise and special purpose vehicles to fill deliver where
traditional models of investment don’t work.


Re
-
investing in renewable energy schemes


We will identify how revenue streams generated from e
nergy projects can further
support renewable and low carbon technologies. The Council, and its partners, will
use their significant land, feedstock and future procurement to de
-
risk projects and
accelerate investment.

Our Ask of Government


To deliver agai
nst this strategy will require the support of national policy making and
we

ask Government:


To accelerate the development of Smart Grids in Sheffield

to facilitate local
energy grids that can sustain local energy generation and new technologies such as
el
ectric vehicles.

Ensuring the electricity grid can support ‘micro electric’ technologies
and establishing the impact on electricity demand of those ‘micro heat’ technologies
that use electricity.


To incentivise the government estate to support the develop
ment of
decentralised energy networks
explicitly in departmental plans to help create the
critical mass needed to kick
-
off and sustain new networks. We welcome the DECC
statement in July 2010
-

“We are also continuing to build the evidence base to
support
deployment of district heating networks in appropriate communities across
the UK. This means, for example, working to ensure the planning system supports
decentralised energy and that local authorities have

this decentralised energy
agenda.”
We ask that Go
vernment works with Sheffield as a city with experience of
this and a commitment to the expansion of district heating (and cooling) networks.


To incentivise district heating from renewable sources
we ask that Government
supports both the generation and th
e distribution of heat

under the Renewable Heat
Incentive
(RHI) to
support the business case for investment in capital
needed to
supply heat to homes, offices and industry.


To
showcase smart metering in Sheffield

and build on E.ON’s experiences with
smart meters and to support roll out with a centralised communications function and
that it will take the unique opportunity this provides to simplify industry processes to
substantially improve the customer experience
. We believe Smart meters should be
installed in all zero carbon homes from 2016


we ask Government to recognise
Sheffield’s ambition to be an early adopter.


To shape a planning system which can reach decisions on new energy projects

in a timely and pred
ictable way while allowing those affected a full opportunity to
make their views known and influence outcomes. The City welcomes the statements
in the DECC Annual Energy Statement (July 2010) on developing and expanding the

16

incentives and planning systems,

particularly
“[Government] are also radically
reforming the planning system to give local communities far more ability to determine
the shape of the places where they live. We will provide incentives for local
authorities to deliver sustainable developmen
t, including for new homes and
businesses. In particular, we will encourage community
-
owned renewable energy
schemes where local people benefit from the power produced and allow communities
that host renewable energy projects to keep the additional busines
s rates they
generate.”


For
cross
-
departmental blended funding
; e.g. Dept for Transport / Communities
and Local Government / Homes and Communities Agency to better direct
infrastructure funding to produce wider low carbon infrastructure, heat networks and

multi
-
utility service companies that cover services related to buildings, waste, energy
and transport.


To commit to
extending the availability of Enhanced Capital Allowances

(ECAs)
for CHP to cover capital investments made by energy companies in Good Qua
lity
CHP investment and district heating assets.


We ask that Government is committed to
supporting the procurement of large
scale energy partnerships

and to encourage procurement routes that offers best
value to enable de
-
centralised energy and renewable
energy rather than the existing
nervous, cautious and hesitant approach in the procurement process around PPP
partnerships. We do not wish for guidance but clarity of opportunity to de
-
risk these
models from a legal perspective. In addition, a short but cr
itical emphasis must be
given to the resourcing of strong legal / commercial support to set out early
precedents against which models can be adopted.


To
support the City

in delivering our plan for low carbon vehicles

as set out in the
City’s Vision for
Transport and the Sheffield City Region Local Transport Strategy
.


To
clearly define ‘zero carbon’

and to recognise the use of off
-
site renewables and
other zero or low carbon generation to achieve the zero carbon status, and to allow
offsite injection of
bio methane used in conjunction with on
-
site gas
-
fired generation
assets.

Recommendations:


1)

Cabinet endorses the strategy ‘Sheffield


The Decentralised Energy City’;
and aims to make Sheffield the first UK city producing all its own decentralised
energy

2)

Cabinet requests a detailed investment and action plan be produced and
reported back to Cabinet by August 2011; and

3)

Cabinet notes the commitment to producing a detailed investment and action
plan for decentralised energy by August 2011; and

4)

Commits to the

on
-
going support of decentralised energy and low carbon
technologies in the City.


17

APPENDIX B

The Renewable Heat Incentive (RHI) and Feed
-
in Tariffs (FiT)

The Feed
-
in Tariff and Renewable Heat Incentive are funding instruments designed
to stimulate an inc
rease in the use of renewable energy. In the simplest terms, these
instruments work by paying for the local generation of renewable energy, with the
payment quite significantly larger than the cost of other energy sources and Income
Tax free. It is paid fo
r through a charge on energy bills rather than taxes, and funded
and administered by energy companies.


Renewable Heat Incentive


Because, across the UK, heat is responsible for 49% of total energy demand and
roughly half of all carbon emissions in the UK
the aim is to increase all heat
generated from a renewable source from 1% to 12% by 2012. To support this,
£860m will be provided in funding from the Treasury and will be made available to
everyone, including householders, commercial, industrial and public

sectors
benefitting them in 2 ways:




It will pay for the renewable heat produced

-

a fixed income tariff is earned
for every kilowatt hour of heat produced (up to 18p/kWhr, depending on the
system used and scale of generation). The heat is likely to be us
ed in
individual properties, but if connected to a heat network there could be an
additional payment for 'exporting' surplus heat
, which positions Sheffield well
with its existing and proposed heat networks in the City.




Savings on heating bills



most ren
ewable systems will produce all the heat
needed, so old boilers can be removed with no more oil or gas heating bills.
Some renewable heat systems may retain the old boiler as back
-
up, but bills
should still be greatly reduced


The RHI programme commits to
tariffs to last 10 to 23 years depending on the
system used and scale of generation and it is estimated that it will take 7
-
9 years for
the majority of users to earn enough money from tariffs to pay off installation costs
with the average user to earn a re
turn of 8
-
12% per annum.

This will further
incentivise the uptake of renewable energy generation in schools, commercial
buildings and the public sector estate.


By paying people for generating heat from renewable resources, the RHI is designed
to provide l
ong
-
term support for renewable heat technologies. Consumers are able to
their reduce carbon footprint and energy bills, become more energy self
-
sufficient
and earn extra income. Eligible renewable heat sources include solar heating,
biomass, ground source
heat, air source heat and biogas.


Subject to any policy changes, we understand that renewable heat installations that
are commissioned from July 2009 onward will be eligible for a tariff under the RHI,
but payments will not begin until the official June
2011 start date and will not be
retrospective.


18


It should be noted that the details of the RHI are still in design and are subject to
change.



F
eed
-
in Tariff


Already running since April 2010, the FiT is the equivalent of the RHI for electricity,
supporti
ng generation from the renewable sources of solar panels, wind, hydro
-
electric power
.

The Feed
-
in Tariff will provide three financial benefits:




A payment for all the electricity produced, even if used by the consumer (tariffs
up to 41.3p/kWhr and lasting

up to 25 years)



Additional bonus payments for electricity exported to the National Grid



A reduction on standard electricity bills, from using own energy produced


The FiT is broadly universal, for households, landlords, businesses and organisations
such
as schools and care homes. It appears, from evidence produced by Ofgem that
the FiT is incentivising investment. Ofgem has revealed that more than 11,000
generators registered for Feed
-
In Tariffs during the first six months of the incentive
scheme, confirm
ing that the policy has led to a surge in renewable energy
installations and an additional 44MWe (mega
-
watt equivalent) capacity installed
3
.


Some local authorities are launching their own initiatives in conjunction with the RHI
and FiT either on their ow
n or in partnership with suppliers/installers and long term
finance providers. Sheffield City Council has announced its proposals for generating
power from a large scale solar photovoltaic scheme (
announced at Cabinet on March
9
th

2011
) with a commitment t
o further renewable energy schemes to come forward.


The Green Deal


A quarter of the UK’s carbon emissions comes from the energy we use to heat our
homes, and a similar amount comes from our businesses, industry and workplaces.

In Sheffield 30% of the Cit
y’s carbon emissions are from energy consumption in
homes across the City. Business and commerce is responsible for around 50%.


The Energy Bill

introduced to Parliament on 8 December 2010 includes p
rovision for
a new “Green Deal”
4

with Government
establishing a framework to enable private
firms to offer consumers energy efficiency improvements to their homes, community
spaces and businesses at no upfront cost, and recoup payments through a charge in



3

https://www.renewablesandchp.ofgem.gov.uk/Public/ReportManager.aspx?ReportVisibility=1&Report
Category=0


4

http://www.decc.gov.uk/en/content/cms/what_we_do/consumers/green_deal/green_deal.aspx


19

instalments on the energy bill.

The detail of thi
s framework is being developed by
Government with further announcements expected later in 2011.


The City Council will need to consider how to ensure emergence of new financial
mechanisms to incentivise improved energy efficiency measures is delivered to
the
benefit of local people and businesses across the City.


To encourage a whole house approach that takes account of energy efficiency,
we
know

how important it
will be

for consumers to be able to access reliable information
and advice on
energy efficien
cy and
microgeneration.


The purchase of a microgeneration system is a significant investment decision for a
consumer. It requires a significant financial commitment. Consumers also need
information to align day
-
to
-
day use and system controls with the
anticipated outputs.
A lack of good quality information and advice from the start the decision process can
lead to a potential consumer deciding against an appropriate microgeneration option.
A key challenge for the City is to assist in providing that info
rmation and facilitating
the sharing of experiences across communities and businesses.


The Green Investment Bank


The Green Investment Bank (GIB) Commission, a fully independent group convened
by the Chancellor of the Exchequer to advise Government, recom
mends the creation
of a new public financial institution is needed to unlock the investment needed for
Britain to deliver a timely transition to a low carbon economy. The Commission
recommends that the GIB be established to act in the public interest to id
entify and
address these market failures and investment barriers over the long term


accessing
capital to invest in key energy and low carbon infrastructure, such as energy
technologies.


Government is developing its proposition on the Green Investment Ba
nk through
2011.