CRIF and CEF Report: Key issues and emerging action plans Agenda Item 4, CRIF/CEF Steering Group

1. Agenda Item No: 4
Cambridgeshire Renewables Infrastructure Framework and
Community Energy Fund
To: CRIF/CEF Steering Group
Date: 19th December 2011
From: Sheryl French on behalf of the Officer Steering Group
Purpose: • Share progress on the CRIF and CEF Projects
• Identify the scale of renewable energy investment and
delivery needed to put Cambridgeshire onto a pathway
of greater energy self sufficiency
• Identify how the CRIF and CEF Projects support growth
of the Clean Tech Sector in Cambridgeshire, attract
investment and create new green jobs
• Identify key issues arising on the CRIF and CEF
Projects
• Identify an emerging strategic framework for Local
Authorities and partners to facilitate investment and
delivery of renewable energy
Recommendation: The Steering Group to:
• Note progress on the Projects
Provide a steer on:
• The key issues identified in section 5.0
• The emerging strategic framework to facilitate the
growth in the Clean tech sector and delivery of
renewable energy in section 6.0
Contact: Name: Sheryl French
Job Title: Delivery Manager
E-mail address: Sheryl.French@cambridgeshirehorizons.co.uk
Telephone No: 01223 714052
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2. 1. Purpose
• Share progress on the CRIF and CEF Projects
• Identify the scale of investment and delivery in renewable energy to
put Cambridgeshire onto a pathway of greater energy self sufficiency
• Identify how the CRIF and CEF Projects support growth of the Clean
Tech Sector in Cambridgeshire and the creation of green jobs
• Identify key issues arising on the CRIF and CEF Projects
• Identify an emerging strategic framework for Local Authorities and
partners to facilitate investment and delivery of renewable energy
2. Background
2.1. The Coalition Government signed up to deliver 50% reduction of carbon
emissions by 2025 (based on 1990 baseline) within the ‘Domestic Action
Budget’ i.e. without the support of international carbon markets and signed
up the UK to source 15% of its energy from renewable sources by 2020 as
part of the EU Renewable Energy Directive. This commitment translates
into targets of:
• 18% contribution from onshore renewable electricity
• 35% contribution from renewable heat by 2030.
2.2. The CRIF Project was agreed by Cambridgeshire Horizons Board in
September 2010. An Officer Steering Group has managed the project to
date and it includes representatives from Cambridgeshire Local Authorities,
Suffolk and Hertfordshire County Councils, Peterborough City Council as
well as representation from the Energy Sector, RSLs, EEDA and
Sustainability East. Cambridgeshire Horizons Board provided the strategic
steer and guidance to the Project until its last Board meeting in September
2011. It was agreed to set up a Member Steering Group including Local
Authorities and a representatives from the RSLs, Developers and
Environment Agency to oversee the completion of the CRIF and CEF
Projects and development of the next steps by the end of January 2012.
2.3. DECC commissioned in 2010 and subsequently published in May 2011 a
report to identify the Renewable Energy Capacity for the East of England.
This identified for each County the key renewable energy resources 1based
on high level constraint mapping. The CRIF Project2 is Cambridgeshire’s
response to this Study (www.crif.citizenscape.net). It identifies in more detail
the renewable energy opportunities in Cambridgeshire, the scale of
investment needed to support the transition to a low carbon economy; what
is needed to support the growth of the Clean Tech sector in Cambridgeshire
and how Cambridgeshire residents and businesses can become more
energy self-sufficient and manage the long term costs of rising fuel bills
2.4. The CRIF Project will provide:
• a robust evidence base for the Local Authorities to adopt and which
can be used to inform local plan and policy development
1
http://www.sustainabilityeast.org.uk/index.php?option=com_docman&task=cat_view&gid=82&Itemid=62
2
www.crif.citizenscape.net
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3. • three action plans which identify how the community, commercial and
public sectors can deliver local energy generating schemes and
provide the policy and context for capturing the investment of £6billion
for low carbon infrastructure.
Community Energy Fund(s) – CEF
From 2016, zero carbon policy identifies that all new homes must be zero carbon on
all regulated emissions they produce (i.e. those emissions arising from space
heating/cooling, lighting and hot water).
2.5. For small and medium sized new developments, achieving zero carbon can
be technically difficult to achieve and/or costly. A Community Energy Fund
(CEF) is a mechanism to help developers deliver their carbon emission
obligations by offsetting residual carbon emissions associated with the
development through payment into a Fund (£/tonne CO2). The CEF then
channels this investment into local energy efficiency or energy generating
projects to help deliver emissions savings.
2.6. In February 2010, consultants Element Energy were commissioned to scope
the potential for a Cambridgeshire CEF(s). This report was presented to
Councillors at a briefing in July 2010 at which Councillors identified several
key issues for further development (Appendix 1) including:
• Ensuring accountability and governance of the fund(s)
• Understanding the appropriate scale of the fund – local and/or County
• Identifying links between allowable solutions, Section 106, the
Community Infrastructure Levy and Carbon Reduction Commitment
2.7. A second report commissioned in February 2011 and developed as part of
the Climate Change Skills Fund, explores in detail the issues raised by
Councillors. A draft CEF report is now with Cambridgeshire Local Authorities
for comment and finalisation by end of January 2012. Copies of this
technical report are available from Sheryl.French@cambridgeshire.gov.uk or
01223 728552. An Officer Steering Group made up of representatives from
the Local Authorities and Sustainabilty East has overseen the development
of the CEF project reporting to Cambridgeshire Horizons Board and now to
this Steering Group.
3. Project Progress
3.1. The CRIF Project is made up of five key areas of work:
• a baseline assessment of energy demand across Cambridgeshire and
the potential to deliver 28% of its total energy demand (excluding
transport) from renewable energy by 2031 (Workpackage 1)
• the financial and other mechanisms to capture the investment needed
to provide Cambridgeshire with greater energy security (Workpackage
2)
• the delivery pathways for key stakeholders including community,
public sector and commercial (Workpackage 3)
• dialogue and engagement with stakeholders to identify the key issues
and to shape the delivery pathways (Workpackage 4)
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4. • documentation of the CRIF Process to share with other local
authorities to inform learning across the East of England
(Workpackage 5)
3.2. Consultants Camco have now completed the baseline assessment report. It
provides the technical facts and figures on how much renewable energy
Cambridgeshire already delivers; the technical potential of renewable
energy available in Cambridgeshire and the scale of local energy
infrastructure needed up to 2031 across a range of technologies to increase
local energy generation by up to 28% of total energy demand.
3.3. A draft report on the finance and delivery mechanisms has just been issued
to the CRIF Officer Steering Group (12/12/2011) for comment and
discussion. This identifies the scale of investment required (@ £3-6billion) if
Cambridgeshire wants to secure up to 28% of its energy from local
renewable energy schemes. See diagram below. The draft report identifies
funding opportunities including government incentives; policy context and
the actions required by the key stakeholders over the short, medium and
longer term if we are to achieve up to 28% of our energy from local
renewables by 2031.
3.4. During May – November 2011 a programme of digital and face to face
engagement with the three key stakeholder groups has taken place. This
has included
• Three events for all stakeholders – May, July and November
• Five stakeholder specific events – September, October and November
(including Clean Tech Sector, Developers, Councillors, Public Sector
and Community)
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5. • Seven community events including Ely Market, Alconbury Family Day,
Sustainable Parishes South Cambs ; Gamlingay, Whittlesey Fair,
Warboys Greener Living Event and Transition Cambridge, Village
SOS meeting
• Online and face to face questionnaire –over 100 completed
The www.crif.citizenscape.net website has provided a space for sharing
information and presentations providing progress on the project to
Cambridgeshire communities.
3.5. A condition for project funding, is the need to share and support other local
authorities with the learning on the CRIF project to inform development of
their renewable energy infrastructure planning. A model/blueprint of the
process and learning is now being developed in partnership with
Sustainability East and Public-I. It is recognised that the process developing
the Renewable Infrastructure Framework and the process to implement the
CRIF (post Report sign off) is of greater potential significance than the
production of the final report itself.
Progress on the Community Energy Fund
3.6. A draft Report on the Community Energy Fund was produced in November
2011. It is currently with the Local Authorities for comment and feedback
with a view to sign off the report by the end of January 2012. The report
covers
• the emerging Allowable Solutions Framework (please see Appendix 2)
and the role of Community Energy Funds within this
• the scale of investment, a potential to attract up to £54million of
developer contributions up to 2026
• the most appropriate structure for a Fund. This is seen as a Company
Limited by Guarantee similar to the role of Cambridgeshire Horizons
which attracted and managed over £100million of Funds for
Cambridgeshire as part of Cambridgeshire’s growth strategy
• the most efficient geographic scale for a fund. This identified as
County wide, based on administrative efficiency, skills, ability to
leverage the Fund and the potential to invest in larger scale
infrastructure that brings a lower £per tonne cost for CO2.
• Carbon accounting processes
4. Growing the Cambridgeshire Clean Tech Sector
4.1. The UK is the world’s sixth largest low carbon and environmental economy,
with 3.5% of global market share3. The Environmental sector accounts for
£22.3 billion (21%) of total UK market value, Renewable Energy for £31.1
billion (29%), and the Emerging Low Carbon sector for £53.3 billion (50%).
The ‘newer’ sectors of Renewable Energy and Emerging Low Carbon are
significantly higher in value than the more established Environmental sector.
In terms of size, the low carbon and environmental economy lies
somewhere between the UK’s healthcare and construction sectors.
3
www.bis.gov.uk/files/file50254.pdf):
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6. 4.2. The Greater Cambridge and Greater Peterborough LEP is signed up to
growing the local CleanTech Sector as the third new cluster to complement
the ICT and Biotech clusters and deliver new green jobs. This will build on
Peterborough as an Environment City and its existing Clean tech sector
which is currently made up of more traditional environment services and link
this into the greater Cambridge area and its emerging ‘newer’ low carbon
Clean Tech businesses.
The THIRD CUSTER – CLEAN TECH
South Cambridgeshire
BIO TECH Genomics
Bioinformatics INFO TECH
Pharmaceuticals Hardware
Diagnostics Proteomics
Software
Research/Info Communications
Tools
Industrial
Building
technologies
Alternative fuels Photovoltaics
Waste management Energy management
Nanoelectronics
Cambridge
CLEAN TECH area
Renewables
Low carbon
Environmental
Peterborough
4.3 If we view this emerging Clean Tech sector spatially, we need to link the
Peterborough cluster to the north of the County with the newer emerging
technologies from the greater Cambridge area. There are two key corridors
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7. along which the Clean Tech sector can be encouraged to grow. These
include the guided bus route via the new towns of Northstowe and Alconbury
which can attract and host new Clean Tech companies and the Cambridge –
Ely- March- Peterborough raillink. Connecting the Peterborough cluster with
Cambridge is important for enterprise and innovation in this sector and
distributing this growth across the County.
4.4 IThe work on the Cambridgeshire Renewables Infrastructure Framework
(CRIF) has identified that delivery of 18% renewable electricity and 35%
renewable heat for Cambridgeshire will realise investment of between £4-
6billion into local energy generation. Cambridgeshire has sufficient
renewable energy capacity to deliver this challenge but needs to set the
strategic framework to attract the investment and deliver the infrastructure to
ensure that significant financial and economic benefits are retained locally.
5. Key issues
5.1. The CRIF Project is producing an evidence base for adoption by the Local
Authorities to support the development of local renewable energy policies
and plans (alongside other evidence e.g. De-Carbonising Cambridge). This
will provide the Local Authorities the ability to plan renewable energy
development in a way that suits your district or area. The risk of not doing
this is Local Authorities can be subject to speculative planning applications
which go to appeal. The new presumption in favour of sustainable
development contained in the National Planning Framework will mean that
they are likely to be successful unless the local authority can demonstrate
that it has plans in place to support delivery of the Uk’s Renewable Energy
targets. If Local Authorities adopt the evidence base and the CRIF Action
plans this can demonstrate that you are managing and planning the delivery
of renewable energy to deliver UK renewable energy targets and provide
strength to your decisions. An example of how this has worked in the past is
the speculative planning application submitted for development at Hanley
Grange for a new Eco-Town. South Cambridgeshire and its partners could
argue that it had planned for housing growth through the growth strategy.
This provided a successful approach and ability to win at appeal. It is
therefore key to the success of the CRIF Project that the local Authorities
formally adopt the CRIF Project report (evidence base and action plans) and
that this process is identified and programmed into decision making.
5.2. The CRIF Project is producing three action plans. One of these plans is how
the public sector can use its hard (e.g. buildings, land etc) and soft (policy,
incentives; growth) assets to support the delivery of new energy generation
schemes. The leadership role of the public sector and how it facilitates the
context for business growth in the Clean Tech sector up to 2031 is really
important. Ownership of this action plan by Members is key to delivery.
(Please see appendix 3: draft Public Sector Action Plan)
5.3. The CRIF Project will also produce action plans to support the community
and commercial sector to deliver their fair share of renewable energy in
Cambridgeshire. These plans also need to be owned. The public sector will
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8. have a role to facilitate their adoption by the community and commercial
sectors and will need to plan interventions to support delivery of these plans.
5.4. To deliver the scale of infrastructure required across the range of different
technologies and to capture the £6billion investment for Cambridgeshire - up
skilling of staff and capacity building across the public sector is needed.
Resource planning is an important consideration.
Community Energy Fund(s)
5.5. Geographic Scale of the Fund: The draft CEF report indicates that a
Cambridgeshire wide CEF would offer the greatest benefits as it maximises
the size of the fund for investment and minimises administration costs. This
is a decision that will need to be taken jointly by the Local Authorities and
the processes to make this decision, if appropriate, need to be worked up
and agreed.
5.6. Local authorities are required to identify a local plan policy for a CEF and a
list of infrastructure for a CEF to invest in. The Local Authorities will need to
work together to agree a policy and the infrastructure list. The CRIF project
has started this process for renewable energy for Cambridgeshire but it will
need to be supplemented with energy efficiency and waste to energy
projects and in the longer term low carbon transport infrastructure.
5.7. Governance of the CEF: The governance of a CEF, although potentially
challenging, will need to facilitate a prioritised and balanced infrastructure
plan including strategic and cross-boundary infrastructure and more local
community scale investment. Cambridgeshire Horizons is a local example of
how Cambridgeshire has already managed a pot of funding and prioritised
its investment as a partnership. This is an opportunity to learn from this
experience.
6. An emerging Strategic Framework
6.1. The CRIF Project has identified that the scale of infrastructure delivery to
realise the £3-6billion investment in energy generation and growth for the
Clean Tech sector in Cambridgeshire is between 200,000-400,000 total
installations across all technologies including photovoltaics, waste to energy,
ground source heat pumps, wind etc. To manage the scale of change and
investment in low carbon energy infrastructure delivery, breaking the work
into bite sized chunks is necessary. The CRIF Project has already started
this process. It has identified the number of energy installations the
community can deliver for itself; the number of installations that the
commercial sector can deliver and the number of installations that the public
sector can deliver. Action plans are under development to identify how to
facilitate this emerging market and provide investor confidence. These
action plans need to be shared with stakeholders for comment and input.
6.2. In May 2011, an EU bid was submitted for €1.2million technical assistance
to help mobilise local energy investment. The EU Bid is currently being
negotiated with the Commission and contracts are expected to be concluded
early February 2012. The EU Bid recognises the scale of infrastructure
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9. required in the CRIF and what support is needed locally to mobilise
investment. Most importantly the EU bid will provide resources to support
the Local Authorities to:
• Set up a sustainable finance model to secure investment over the
longer term. This will likely include public sector mechanisms such as
incentives and grants, CIL, S106 alongside private investment such as
developer payments into a Community Energy Fund.
• Set up an Energy Services Company (or similar) that can commission,
design, build and manage new energy generating schemes
(community scale and larger)
• Support the legal and financial costs to set up a Community Energy
Fund(s) for Cambridgeshire
• Develop the skills and capacity within the Local Authorities to deliver
energy generating schemes using public sector assets as a means to
facilitate and lead local investment
6.3. In discussion with CLG on Allowable Solutions and Community Energy Fund
there is potential for Cambridgeshire to become one of four pilot Community
Energy Funds starting in 2012. This means that Local Authorities will need
to make a decision on how to proceed on a Fund(s) ideally by the end of
January 2012.
6.4. Bringing this all together, CRIF evidence base and action plans, Community
Energy Fund and the EU project we :
• understand what we are trying to deliver
• know what tools are available to use to provide the ambition and
policy to attract investment into Cambridgeshire low carbon rather
than other areas or countries
• access resource via the EU Project to create a sustainable finance
model using public sector assets and opportunities and set up delivery
mechanisms such as the Community Energy Fund
• agree infrastructure plans and projects that are priorities for
investment and reducing carbon consumption
• agree how to resource the delivery of the CRIF action plans
7. Next Steps
• A Councillor Briefing is being planned on the Community Energy Fund for.
January 2012 to discuss the draft report and options for taking the Fund(s)
forward
• Discussions with key stakeholders will take place on the CRIF Action Plans
during January 2012 to continue to shape the actions
• The negotiation with the Commission on the EU project will be progress
during January 2012 with a view to sign contracts by end of
January/February 2012
• CRIF and CEF Final Reports will be completed ready for sign off by the
Steering Group by end of January 2012 and for the Local Authorities to take
forward
8. Recommendations – see cover sheet
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10. Appendix 1: Summary of key issues raised at a Member Briefing Session 27/02/2010
Key issue Further work needed Inclusion in COF Inclusion in the
Report Next Steps
Ensuring • Carbon accounting – how Chapter on carbon More detailed
accountability to measure the emissions accounting to be work will be
of the COF savings from fund included required
investments.
• Financial accountability – Identify governance Further detailed
how to ensure scrutiny of models currently work will be
fund investments when working or under required to
investments is undertaken discussion in develop the
by a Partner organisation. Cambridgeshire structures and
working at this scale accountability
• Member representation/ systems.
democratic accountability –
how to ensure member
involvement in investment
decisions.
Understanding Analysing the lessons learnt To be included in the More detailed
the appropriate from current Carbon Offset Report. work will be
scale of the Funds required
fund
Implications of the Code for For inclusion in the
Sustainable Homes on the size report.
of the Fund
The business case for a More explicit
county-wide fund reference to the
benefits at a county
scale, as opposed to
a district level
Identify the Clearer descriptions on the Make clear that the
links between different elements and their COF does not
Allowable linkages. impact on section
Solutions, 106 or Community
S106, the Infrastructure Levy
Community monies – it is a
Clear indication of the cost to
Infrastructure separate pot.
developers of the Code for
Levy and
Sustainable Homes.
Carbon
Reduction
Commitment
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11. Appendix 2: Allowable Solutions
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12. Appendix 3: Early DRAFT of the Public Sector Action Plan for discussion and
amendment during Dec/January 2012
Short Term
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