The process of developing decentralised energy policies in the City of London

Introduction

Developing countries in Southeastern Europe are mostly characterised by top-down strategic planning. This approach was usually based on the assumptions inherited from the countries with similar experiences in political ideologies and mirrored general principles of the countries with ex-socialistic political system. In this context of centrally planned economies, spatial plans of the highest order were considered superior and were prepared by central governments, without involvement of local planning authorities and society participation. ¹ Also, in desperate need to attract foreign investments, the governments offered foreign investors the most productive sectors and under favourable conditions, even at the expense of domestic investors. ²

Basically, central or regional governance is focused on how to control and channel urban growth and to enhance the most profitable projects for foreign partners, while neglecting the needs and interests of the citizens living in certain areas. Cultural heritage can also be endangered by these decisions, which results in lost identity in some societies, or disappearance of entire subcultures in urban areas. This is the reason why participation of the public, together with local authorities is essential for the spatial planning process and decision making. Unfortunately, the governance disregards how creative forces of local planning authorities, different civil associations, local and neighbourhood councils can be mobilised to benefit the majority of the people directly influenced by their decisions.

With respect to energy system, planning policies in developing countries are still far away from the so-called energy turn, which is characterised by shifting from fossil fuels to renewable energy resources, wide range of options for energy saving, followed by restriction of adverse effects of the whole energy system on the environment. ³

Advanced economies, unlike developing ones, use combined top-down and bottom-up approach for strategic planning and policies with respect to the objectives identified, agreed and shared by the highest authorities in charge. This paper investigates London’s spatial and energy planning systems and their mutual influence by examining how London’s strategic documents fit within more general objectives, and their contribution to the London’s vision to be the best big city in the world. ⁴ Understanding the philosophy behind the spatial and energy planning in particular advanced economy can provide precious insight and directions for the developing countries, which are experiencing a lack of diversity and approaches to the strategic planning processes.

The role of the regional governments in UK has been recognised by the central government as vital in representing the interests of citizens, delivering and commissioning local services, transferring power further on to the local authorities up to the lowest appropriate level. Therefore, proper power has been delegated from the central government through all hierarchical levels to the local communities and individuals they represent, who then become active participants in development of different policies and implementation of the objectives and action plans set by the higher authorities. Further on, the central government has been working intensively on removing the barriers that prevent the local authorities, communities, social enterprises and voluntary groups from getting things done for them. ⁵

In addition, the London authorities have recognised that commitments made by the central government to global climate change mitigation movements represent an obligation and a challenge at the same time. The underlying philosophy that could lead to success is to recognise an opportunity in challenge and at the same time to behave responsibly. The London’s Economic Development Strategy ⁴ sets the objective to make London one of the world’s leading low carbon capitals by 2025. This is an opportunity for London to win a reasonable market share in low-carbon economy by enhancing activities that will stimulate and drive growth in the low carbon and environmental goods and services markets, develop the Londoners’ skills to be competitive at the regional and global market and expand the opportunities for all its people and enterprises to achieve the highest environmental standards and quality of life. It has also been recognised that spatial planning determines the possibilities to support energy turn in a given spatial context, and the concept of decentralised energy planning appears as a proper solution for excessive urbanisation, increase in energy demand and concerns for environmental protection.

Historical development of spatial and energy planning

Spatial planning significantly contributes to the decisions related to sustainable energy systems, having impact on energy demand and overall context of energy planning. ⁶ Although this link between spatial and energy planning is rarely considered in strategic planning documents, London’s policy making shows an exception: its spatial development strategy contains chapters and policies related to energy planning and inevitable environmental protection.

Moving back to the time when environmental issues were not such a major concern as today, spatial planning had priority over energy planning and the only concern related to energy was the security of its supply. Historical development of the planning system in England is important for understanding the existing planning system in London and the point when energy planning became an integral part of spatial planning. In this paper, only the most important Acts and statutory instruments related to the planning system in England were examined. It is also important to indicate that the size and boundaries of particular counties and districts changed immensely during the past century; therefore, the area of Local planning authorities’ (LPA) jurisdiction was modified. This is particularly important since the genesis of strategic planning documents for different areas was considered in this chapter.

The first Town and Planning Act was adopted in 1932, as a primary legislation act. It gradually changed in a number of iterations, directing the planning system through different stages and approaches to global national policies, shifting the power from local level to central government and vice versa.

The basis of the existing system was introduced by the Town and Country Planning Act 1947. This Act shifted planning responsibilities from the District and Borough Councils to the Counties, significantly reducing LPA number. It was required from each LPA to complete a local plan, setting out detailed policies and specific proposals for the development and use of land in a district.

The Town and Country Planning Act 1968 introduced structure plans for the first time, which represented strategic level development plans. Therefore, besides preparation of surveys that examined the matters that may be expected to affect the development of a particular area, LPA prepared a structure plan, framed to cover wide areas, formulating LPA’s policy and general proposals with respect to the development and other use of land in that area. ⁷

At the time when this Act was adopted, LPA for the Greater London was the Greater London Council. However, Schedule 1 of the Town and Country Planning Act 1968 – Special Provisions as to the Development plans in Greater London, stated that the Greater London Council should not prepare a local plan for any part of Greater London other than a plan for an action area. Therefore, London Borough Councils examined and reviewed the matters not examined by the Greater London Council or required by the Greater London Council to be examined.

The most significant criticism related to the structure plans was the time needed for its adoption and lack of deadlines, creating a situation that settlements were built faster than planners could plan. ⁸

The Town and Country Planning Act 1990 systemised previous approaches to the development planning and control systems and distinguished which planning documentation should be prepared by non-metropolitan areas and metropolitan areas. Non-metropolitan areas retained the content of the development plans as stated in 1968 Act. The Councils of the Metropolitan districts and the Councils of London Boroughs as LPAs prepared surveys and unitary development plans (UDP). Figure 1 presents the development of the planning system from 1947 to 1990. OPEN IN VIEWER

In addition to the establishment of the Greater London Authority (GLA), the Greater London Authority Act 1999 introduced the spatial development strategy, document including general policies with respect to the development and use of land in Greater London.

The Planning and Compulsory Purchase Act 2004 delivered fundamental changes to many areas of the planning law. The existing development plans were replaced by spatial development strategies and local development schemes. This Act specified that LPA must keep under review the matters expected to affect the development and planning of their area, preparing and maintaining local development documents.

In 2010, the Government committed to radically reform the planning system, based on the principle of localism. The Localism Act was introduced in November 2011. It set out a series of proposals with the potential to achieve a substantial and lasting shift in power away from the central government and towards local citizens.^9,10 The Localism Act delegated greater powers to Councils and neighbourhoods and gave local communities more control over housing and planning decisions, implementing reforms to make the planning system more democratic and effective, and ensure that the decisions about housing are taken locally. Figure 2 presents the development of the planning system from 1990 to date. OPEN IN VIEWER

Following the idea that the power shall be exercised by the people directly affected by the decisions they are taking, the Localism Act also abolished the regional spatial strategy, with the exception of the London Plan. Although it was not explicitly stated in the Localism Act, it was assumed that the local plans were in conformity with the national planning policy and, in the case of London, with the London Plan. The introduced system of neighbourhood planning allowed communities to come together through a local parish council or neighbourhood forum to shape local development plans and to permit and focus their development in desired directions.

Decentralised energy planning in London

Spatial distribution of energy sources and energy demand shows disparities, and overcoming this logistic problem is different in case of fossil and renewable energy sources. Fossil fuels are available from limited areas in the world in high quantities, being transferred to large distances before its conversion. Renewable energy sources, related essentially to solar radiation, are highly decentralised sources, whereas energy demand is mainly concentrated in urban areas. ³ This is why development of decentralised energy systems is a good solution to meet London’s energy needs, while promoting renewable and other low-carbon energy sources, energy produced from waste, district heating and cooling and combined heat and power.

In addition, carbon footprint has discovered much inefficiency related to the existing energy resources consumption and production, while decentralised energy has been identified as a key point for changing public and private perspective to contribute effective energy resource management and sustainable energy consumption. Decentralised energy therefore offers the opportunity to reduce carbon intensity of energy use, therefore to increase environmental protection. ¹¹ The context of decentralised energy relies on the idea that the development of opportunities for decentralised energy should be integrated with spatial planning processes, using opportunities of already existing planning power and capacities.

London authorities have committed to generate 25% of its energy from decentralised energy sources by 2025, reducing CO₂ emission by approximately 2.57 MtCO₂/year. ¹² Decentralised energy sources of different size should provide secure, efficient and affordable energy supply, enabling London to cover more of its energy demand and thus increase the security of supply.

The importance of decentralised energy was emphasised by different London strategic documents, starting from the most general Economic Development Strategy toward the specific programmes financed by LGA, aimed to make this approach understandable and acceptable to every London Borough or community willing to take its role in the low carbon economy.

The strategy’s third objective is to make London one of the world’s leading low carbon capitals by 2025 and a global leader in carbon finance. ⁴ High demand for new low carbon products and services, as an opportunity for large scale London’s activities, drives forward its transition to the low carbon economy. In this context, London uses its existing strengths in financial and business services and public sector purchasing power to ensure stable low carbon economy growth.

Approximately 80% of London’s carbon emissions originate from locally based energy activities from heating and powering homes, public and commercial buildings, ¹³ representing the main potential for green house gases (GHG) emissions reduction. Therefore, apart from encouraging research and commercialisation of new low carbon products and processes and development of an effective partnership with various stakeholders, regional authorities support London businesses to deliver particular climate change mitigation programmes. Decentralised energy is one of them, together with programmes to increase energy efficiency in London homes, public and commercial buildings. These programmes obtain financing directly from GLA, which is a step toward commercialisation by proving their viability with investing public money first. Decreasing risk by public investments, private investors are attracted by large scale of viable, low carbon options for energy supply and consumption.

Initiatives and incentives to develop decentralised energy capacities are further elaborated and presented in the Climate Change Mitigation and Energy Strategy, ¹³ London Plan ¹² and various supplementary documents. These strategic documents present the London authorities’ commitment to the development of decentralised energy in a systematic and devoted manner through the Decentralised energy master-planning programme.

London Heat Map provided an extensive database of various analyses such as assessment of local energy demands, low and zero carbon energy resources, capacities to use them and effects of installation of different scale district heating networks. Heat mapping was a good example that integrated approach to the development of spatial evidence base for the decision-makers in the field of decentralised energy can generate significant benefit, not only to the Boroughs but also to energy producers and developers. Identified decentralised energy opportunities needed to be prioritised taking into account spatial and other strategic issues. Decentralised energy master-planning assisted Boroughs to follow the actions set in the London plan and other strategic documents. New legislation in this field highlighted that decentralised energy opportunities should be reflected in all strategic documents for each Borough, thus ensuring its commitment. The new planning system obliged developers to either support expansion of the existing decentralised system or to include a new on-site system. The Localism Act 2011 provided more planning power to LGA, which was used to identify and support opportunities for decentralised energy in London. The London Plan required new developments to support implementation of decentralised energy systems, and to incorporate onsite low carbon and renewable energy generation where appropriate. Understanding that the early stage development proposals were the most cost-effective way to implement relevant design and technological measures, the developers were required to include a detailed energy assessment into major development proposals, demonstrating how minimum targets of CO₂ emissions reduction could be met. ¹²

The decentralised energy for London programme followed the decentralised energy master-planning programme, in order to assist commercialisation of large decentralised projects. ¹⁴ Besides providing London Boroughs with technical, financial and commercial assistance, this programme provided support on procurement, legal issues and financial consideration to facilitate market offer and funding for decentralised energy projects. Guidelines on business models were available as well, supporting London Boroughs to create public–private partnership or to obtain other ways of projects financing.

Conclusions

The Economic Development Strategy stipulates the set of actions, integrating the idea that the future economic development of London must be moving towards an environmentally friendly economy, producing a much lower level of GHG emissions. This strategy recognises the development of decentralised energy opportunities in London as one of the key areas that can significantly contribute to low carbon economy growth. The London Plan also sets policies to identify and establish decentralised energy opportunities within local development frameworks, together with the Climate Change Mitigation and Energy Strategy.

According to these strategies, London is positioned to be a leader, providing a range of opportunities for finance, business services and innovation within the global low carbon economy. However, these strategic documents have been prepared and published in different years, after a series of alterations and modifications. The continuity in strategic planning and development control is difficult to sustain without endangering the dynamic of fulfillment of the objectives. Also, frequent changes in legislation usually imply modifications in approach to certain strategic objectives due to legal or political issues. However, the Localism Act was aimed to provide a relatively smooth transfer to higher decentralisation of the planning system. This new decentralised planning system intends to provide a secure, efficient and affordable energy supply, exploiting possibilities to combine heating, power and cooling energy production from the state-of-the-art energy efficient technologies, and where it is economically and technically viable to apply renewable energy sources. Efforts have been made to put into practice a tight relationship between spatial planning and responsibility to the environment and efficient energy use. Since the essential changes in the planning system are expected to bring benefit to the people directly influenced by the land use in their neighbourhoods, additional effort to educate and teach these people about the benefits of improved energy usage would create an important synergy of effects of the planning system changes and application of the climate change mitigation measures.

LGA has already launched a number of programmes to help London Boroughs to effectively face challenges set by London’s vision for a low carbon future. Most of these programmes deal with improvement of energy efficiency by retrofitting homes, public and private buildings and investing in decentralised energy infrastructure. The purpose is to explore economic viability and the best financial mechanisms to introduce new, energy efficient technologies and increase usage of renewable energy sources, as well as to bring these technologies closer and make them more attractive to direct beneficiaries and private investors.

Experiences and lessons learned from GLA and London Boroughs in development and participation in decentralised energy planning together with spatial planning, based on the Localism Act, can bring multiple benefits to the developing economies willing to learn from these good examples. The approach used by GLA to identify opportunities, evaluate and prioritise the most viable options and make them attractive to both public and private investors is affordable even to the economies with modest intended investments in environmental protection and the security of supply. However, it leaves enough room to intensify investments when the circumstances so permit. In the meantime, the staff in the local planning authorities can be educated and properly skilled to recognise opportunities, develop decentralised energy projects and attract investors, using already prepared financial incentives and mechanisms to make the projects more attractive.