Local low-carbon action

Policy developments including reforms to the planning system, clarity on housing regulations, and new legislation offer some exciting opportunities for local authorities in renewable energy and climate change prevention.

Those organisations willing and able to adapt and work within the new policy environment may be able to take advantage of some attractive opportunities.

New policy framework
The overarching framework for local authorities has been redrawn by the Localism Act 2011, which came into force last year. This legislation confers potential new powers and for the first time a local authority can undertake any activity an individual is entitled to (the ‘general power of competence’), providing it is not illegal. This means more freedom to undertake commercial activities, borrow, raise finance and operate in a range of fields (although not to create new laws or taxes). The legislation creates the opportunity to create commercial operations generating renewable energy or offering energy efficiency measures for example.

The Act also enables local communities to create their own proposals for how they would like to see their neighbourhood develop as it introduces a new right for communities to draw up ‘neighbourhood plans’. These allow members of local communities to come together through a parish council or neighbourhood forum and determine the new local development they want to support in their area.

Local communities will be able to use neighbourhood planning to grant full or outline planning permission in areas where they most want to see new homes and development, potentially making it quicker for development which is locally supported to go ahead.

The strategic vision for the wider area will be set by the Local authority, and the local plan must be approved by a majority in a referendum. Local planning authorities will be required to provide technical advice and support as neighbourhoods draw up their proposals.

One implication is that installing renewables could be more straight-forward if local residents are in favour. For example communities and authorities supporting the jobs, investment, environmental benefits and energy security associated with renewable energy, or aiming for energy self-sufficiency, should find it simpler to pursue these aims. 

The Act may mean that local authorities need to seek extra support from specialists, however significant opportunities are available for those organisations able to take advantage of these, including from the stable and ethically sound income renewable energy provides.

CRC Scheme
Despite widespread speculation over its future leading up to the Budget, the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) has been retained by government in a modified form and places an obligation on the country’s 5,000 largest greenhouse gas (GHG) emitters (including councils) to measure and reduce their emissions. This provides solid reasons to implement energy efficiency and sustainability measures. However one major aspect has been missing from the start of the scheme.

When the policy was first introduced, organisations could not claim credit under the scheme for installing their own ‘on-site’ renewable generation measures supplying their own power (e.g. a wind turbine installed in an organisation’s car park), while also claiming the income they would usually be entitled to from the government-backed Feed-in Tariffs.

This is a major disincentive to the installation of on-site generating assets and a missed opportunity for these organisations to help deliver the capacity needed to meet the UK’s stretching renewable generation targets (30 per cent by 2020, from around 11 per cent today).

The Department of Energy and Climate Change (DECC) have recently committed to re-examine this policy, meaning that renewable energy generated on-site by CRC parties might be exempt from this contradictory rule. We do not yet have any final dates or confirmation of whether this will become a reality, but an agreement to look again is at least progress and opens the possibility of a positive outcome.

If the policy does change, on site generators could claim both the government payments from the Feed-in-Tariff or Renewable Heat Incentive, and qualify for a reduction in their CRC charges.

Such a logical move would be welcomed by the industry and for the first time offer a win-win for organisations that qualify for the CRC, such as larger local authorities, prompting a re-examination of the feasibility of on-site installations. 

Zero Carbon Homes
Another policy that will make local authorities look again at the opportunities for renewables is the ‘Zero Carbon Homes’ policy under development. The ‘Zero Carbon Homes’ scheme will require housing and commercial property developers to progressively reduce the GHG emissions of new homes between now and 2016.

Although the timelines are subject to confirmation by the Department of Communities and Local Government (CLG), as currently drafted, new homes will need to be zero-carbon by 2016 (and new non‑domestic buildings by 2019). As the deadlines approach, there are targets to deliver more on-site renewables and steadily decreasing emissions from new developments. 

The emissions reductions must be met on the site of the development where possible, however this is not always feasible due to the small size of some sites and other constraints.

Therefore there needs to be an option for such developers to meet their obligations in another way. The current proposed approach is that developers unable to meet the zero-carbon standard on-site would be required to contribute to a fund based on the size of the development (for example based on a cost per unit of housing to be ‘offset’). These funds would be used to pay for sustainable development measures (so-called ‘Allowable Solutions’).

Allowable solutions recognise that new developments of a certain size cannot reduce their emissions by 100 per cent using on-site measures and would be installed off-site from the original development.

Current proposals envisage the relevant local authority being entitled to the first call on the funds and choosing relevant projects to fund, which could become a significant source of low-carbon development finance in some areas. The funds must be used for projects which create verifiable carbon savings, selected from a list of permitted projects.

Approved measures are still to be finalised, but are likely to include a range of options, such as renewables, low energy lighting, district heat networks, retrofit energy efficiency projects, and initiatives to address embodied carbon.

Local Authorities may also be required to provide a local Sustainability Plan for their area to identify areas of focus for investment. 
Following a consultation last year, CLG have committed to publishing a review of the Zero‑Carbon Homes policy and a clear strategy for implementing the policy later this summer, when we should know more about the role local authorities will be expected to play and the opportunities available. 

New policy measures have created a supportive policy framework and new opportunities which arguably should help enable low-carbon action on a local basis across the country. The REA has several concerns regarding the support for large-scale renewables, but for local government bodies there can have been few better times to become involved in renewable energy and climate change mitigation activities. 

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