Public Sector

Regional Energy Policy

East Midlands
West Midlands

East Midlands

East Midlands Energy Challenge - The Regional Energy Strategy

Part 1 of the Strategy develops energy policy for the region and Part 2 sets out a Framework for Action and responsibilities of regional bodies. The Forthcoming Part 3 will set out the implementation plans developed as a result of the work undertaken in Parts 1 and 2.

Part 1

The strategy outlines the East Midland’s energy challenge as:
‘The East Midlands will take a lead in moving towards a low carbon future that benefits our economy, protects our environment and supports our communities’.

Energy has been identified as a cross cutting policy area that has a role in helping meet many regional objectives and is important for helping to deliver key regional priorities. In particular;

energy production and the supporting industries form an important part of the Region’s economic base and there are significant opportunities in new low carbon technologies that the Region could exploit,
energy generation and production are a major source of greenhouse gases as well as other pollutants and have an impact on the natural and built environment,
the health and wellbeing of our communities and businesses are enhanced if they are able to access affordable heat and power through energy savings, and
the appropriate location of energy generation projects and attendant infrastructure must be addressed in spatial policy.

In developing and implementing actions to meet the energy challenge the energy hierarchy should be followed:

Reduce our energy use -> use energy more efficently -> move to renewable sources -> use remaining fossil fuels cleanly

The strategy recognises that energy issues touch on all aspects of regional life and contains a series of policies grouped into 4 priority areas;

reducing the need for energy,
using energy more efficiently,
using energy from renewable resources, and
making clean and efficient use of fossil fuels.

Part 2 of the Regional Energy Strategy defines regional energy responsibilities, including emda’s. emda has responsibility for the Energy for Enterprise work strand. This defines emda’s energy priorities as;

business performance,
economic exploitation, and
energy capacity.

In addition, emda also has skills responsibilities, centred on energy skills for business.

Energy and Future Regional Prosperity

The Regional Economic Strategy maps out the themes and strategic priorities of the region. One of the overriding themes for regional development has been identified as ‘Ensuring Sustainability’.

Within the overriding themes the Regional Economic Strategy (RES) identifies 10 strategic priorities. Strategic priority 5 relates to ‘Energy and Resources’:

Strategic Priority	Aim
Energy and resources	To transform the way we use resources and use and generate energy to ensure a sustainable economy, a high quality environment and lessen the impact on climate change.

The RES outlines 3 objectives within the ‘Energy and Resources’ strategic priority. These are shown in the table below along with their associated priority actions:

	Energy and Resources Objective	Priority Action/s
5a.	Responding to the challenge of climate change	Adaptation to climate change – Ensure that public and private sector leaders understand and respond to the impacts of climate change by: i) developing a regional climate change adaptation and mitigation strategy / action plan, and ii) providing support to businesses to undertake climate change risk analysis.
		Reducing the demand for energy and resources – Ensure that our need for energy and resources is minimised by: i) investing in better management and skills, ii) driving change through public procurement, iii) encouraging use of low carbon technologies, and iv) stimulating clean design.
5b.	Exploitation of new and growing low carbon markets	Utilising renewable energy technologies – Maximise the economic and environmental benefits of renewable energy technologies by promoting their development and deployment through: i) the creation of a regional renewables investment plan, ii) promote demand for and showcase renewable technologies, and iii) support supply chain development to ensure regional economic benefits from renewables investments.
		Exploiting low carbon technologies – Ensure that businesses are well placed to exploit the opportunities presented by the growing global marketplace for low carbon products and services through: i) regional awareness raising and communications campaign, ii) the provision of dedicated low carbon business support, and iii) creating stronger linkages between the private sector and Higher Education Institutions active in low carbon research and development.
5c.	Ensuring and infrastructure for a low carbon economy	Energy and waste capacity – Promote the development of a more secure, diverse and sustainable energy and waste infrastructure and innovative approaches to providing energy and waste services within our economy by: i) promoting and investing in renewable and low carbon energy generation, ii) promoting and investing in diverse and localised energy-supply, iii) promoting and investing in diverse and localised waste management, and iv) influencing private sector utilities and regulator concerning the capacity and longevity of existing supply and distribution and waste management infrastructure.

To ensure the flourishing sustainable future envisioned in the Regional Economic Strategy (RES) and to meet regional energy targets, the region will need to move towards a low carbon economy.

Moving effectively towards a low carbon economy has the capacity to provide the region with a number of opportunities which will contribute to regional prosperity. In particular are the business opportunities that will open up for companies with low carbon or energy efficient technologies. It will be crucial for the future prosperity of the region that businesses are able to embrace these opportunities. This project has the potential to contribute to the achievement of the ‘Energy and Resources’ RES objectives (especially with regard to ‘Exploitation of New and Growing Low Carbon Markets’) and will contribute to ensuring the sustainability of the region.

West Midlands

Energy will form an important regional focus in the achievement of sustainable development. The national target is for 10% of electricity to come from renewable sources by 2010 and 15% by 2015 and the regional energy strategy aims to put in place the framework and targets for the region to make its contribution to national energy targets.

The regional energy strategy outlines four headline objectives which are tied in with sustainable development. These are;

improving energy efficiency.
increasing the use of renewable energy resources,
maximising uptake of business opportunities, and
ensuring focused and integrated delivery and implementation.

The strategy then goes onto define regional energy targets; these are listed in the table below:

Headline Objective	Target
	2010	2020
Improving energy efficiency	Industry - Reduce CO2 emissions by 2.4 Mt (18%).	Industry – Additional 4.3 Mt (32%) CO2 reduction.
	Commercial and public sector - Reduce CO2 emissions by 2.0 Mt (36%).	Commercial and public sector - Additional 1.5 Mt (26%) reduction.
	Domestic – Reduce CO2 emissions by 2.4 Mt (19%).	Domestic – Additional 3.7 Mt (29%) reduction.
	Transport – Stabilise CO2 emissions.	Transport – 0.7 Mt (7%) emissions reduction.
	Combined heat and power – 1,000 MWe3 generation.
Increasing the use of renewable energy resources	5% electricity consumed to be from renewable sources.	10% electricity consumed to be from renewable sources.
	250 GWh (0.3% of consumption) of heat from renewable sources.	650 GWh (1% of consumption) of heat from renewable sources.
	460 GWh of liquid bio fuels per year.

The Regional Energy Strategy sets targets for increasing energy efficiency to reduce overall energy use, increasing the proportion of energy that comes from renewable sources, and exploiting the business opportunities in both energy efficiency and renewable energy for the benefit of the regional economy. The West Midlands produces very little of the energy it uses, and the Regional Energy Strategy also sets out plans to ensure a secure supply of energy in the future.

The West Midlands launched its Regional Energy Strategy in November 2004. The formation of a regional energy office - Energy West Midlands - was one of its first priorities

Energy West Midlands

Energy West Midlands is the energy office for the region. It has been established to implement the Regional Energy Strategy and help the people and businesses of the West Midlands meet the challenge of climate change. Energy West Midlands aims to;

raise the profile of climate change and low-carbon technology across the West Midlands,
promote and deliver initiatives that are helping to reduce carbon emissions,
engage businesses and public sector organisations in the climate change debate,
help businesses identify the best way towards using and developing low-carbon technology, and
to capitalise on the benefits of a low carbon future.

To achieve these objectives Energy West Midlands has developed an Action Plan which includes the following live initiatives;

effective energy efficiency – there are many agencies helping both domestic and commercial audiences active in the region. Energy West Midlands is working with them to improve integrated working and eradicate confusion among target audiences,
promoting the use of B5 biodiesel blend in the region. a project working with Marches Energy Agency to increase and promote the use of bio diesel within the West Midlands. The first phase of this project is to establish 20 filling stations stocking the product and promote the wider use of this fuel. In subsequent years to further increase the geographical area covered and look to assist in developing the fuel supply chain,
promoting Best Practice in Social Housing – Energy West Midlands has initiated a project looking to improve the energy efficiency of the region’s social housing stock. The project is being led by Sustainability West Midlands and is seeking to establish best practice for new build design, improving and maintaining existing stock,
communications – Energy West Midlands has embarked upon a communications campaign aimed at raising the awareness of energy efficiency and climate change across the region. We are working closely with key regional stakeholders tapping into their networks to spread information and messages,
promote the market for small-scale renewables – Energy West Midlands is working with to increase the uptake of small-scale renewables by businesses across the region. The main focus is on off-gas-grid areas with early successes in the west of the region offering the potential to widen the initiative out,
maximising business opportunities – By working with the Regional Skills partnership and businesses, Energy West Midlands hopes to identify the skills gap, develop an appropriate response through training and capacity building. Only when the right skills are in place, can the region hope to capitalise on the tremendous opportunities offered in this emerging area of business,
energy proofing – Energy is not an isolated issue. A key challenge for Energy West Midlands will be to ensure that the energy agenda is covered in all the region’s policies and actions We will make sure that energy is given the appropriate focus, so that all regional policies support our goals in delivery and implementation, and
monitoring and evaluation – We need to monitor to see how we are doing and measure the effect we are having. We can then better focus and target our work.

A review of progress against the regional targets outlined in the Energy Strategy was undertaken by the Regional Observatory.

Energy Strategy Monitoring Report

The West Midlands Regional Observatory was commissioned by Energy West Midlands to produce the first monitoring report for measuring progress towards the regional targets outlined in the West Midlands Energy Strategy, published in November 2004.

The report provides the first comprehensive compendium of regional energy and emissions estimates. It identifies and analyses new data produced by the energy group within DTI and DEFRA, as well as regional surveys undertaken since the strategy launch, which provide information on renewable energy production, a key target for the strategy.

In terms of resource availability it was estimated that the region has the potential for 2,993 GWh of generation from renewable energy sources by 2010, with 45% of this coming from wind, 26% from waste, 21% from landfill gas, 4% from biomass, 2% from sewerage gas and 1% from photovoltaics and hydro-electricity. However, there may be a slower progress in the supply of renewables, as it has been identified that most of the energy from waste resources in the region have already been tapped, leaving onshore wind and biomass resources as the most important options for increasing renewable supplies within the Region. Both of these options may require significant investment in electricity network infrastructure.

Wind was identified as the largest contributor to the region’s renewable commitments as it is likely to be the cheapest renewable energy technology; however there were no identified wind-power sites in the region generating electricity in 2004.

Combined heat and power, or CHP, is a technology that is efficient and is already established in the region. With the additional benefits of reduced emissions and the enhanced security and diversity of energy supply, CHP technologies offer a significant potential for meeting the energy strategy targets.

Total CO2 emissions for the region are diverging from the projected straight line reduction necessary to achieve the region’s commitment to ensuring a 60% reduction in emissions by 2050.

Renewable Energy Supply

Renewable energy can be thought of as energy that occurs naturally and repeatedly in the natural environment. Sources of renewable energy are continuously available, offering the potential for achieving sustainability in energy supplies. This is an increasingly important issue as fossil fuel reserves pass their peak, whilst demand for energy continues to climb. The major advantage of increasing the use of renewable energy is that it produces practically no net CO2 emissions compared to energy from fossil fuels.

Generation of Electricity from Renewable Sources

Generation of electricity from renewable sources (GWh) 2002- 2004 - West Midlands Generation

Hydro                         Landfill Gas                Other biofuels           Total
2004                1.9                   250.7                           398.4                           651
2003                1.8                   224.6                           354.8                           581.2
2002                2.4                   207.5                           399.5                           609.4

Share of UK total
Hydro                         Landfill Gas                Other biofuels           Total
2004                0.04%               6.3%                             12.1%                           4.6%
2003                0.1%                 6.9%                             12.5%                           5.5%
2002                0.1%                 7.9%                             16.6%                           5.5%

Source: RESTATS

The table shows the level of generation of electricity from renewable sources between 2002 and 2004 in the Region, and the region’s share of the national total. The largest increase regionally has been from landfill gas, although the region’s share of the UK has fallen over the same period. Generation from biofuels has fallen slightly, but there has been a 21% fall in electricity generated from hydro in the Region. Wind was identified as the largest contributor to the region’s renewable commitments as it is likely to be the cheapest renewable energy technology; however there were no identified wind-power sites in the region generating electricity in 2004.

The locations of the Region’s renewable sites which have a generating capacity of greater than 50KW are shown above. The relative area of the map symbol indicates generating capacity. The largest number of sites are generating electricity from sewage gas and are located widely across the region, while landfill gas sites tend to be located in the south and south west of the region. The cost of access to the electricity grid may be a factor behind the absence of renewable generating sites in the west and south west of the region.

The next section examines in more detail the region’s existing capacity for renewables from different sources. While RESTATS provides a good central source for data on renewable energy sources, we have drawn on a number of different sources that have provided a focus on the West Midlands region.

Combined Heat and Power

Combined heat and power, or CHP, is a technology that is efficient and is already established in the region. On-site or near-site heat generated by electricity production can be highly efficient, and the electricity produced can either be used by the host producer to offset energy consumption which would otherwise draw on the grid, or fed into the electricity grid to supply off site consumption. With the additional benefits of reduced emissions and the enhanced security and diversity of energy supply, CHP technologies offer a significant potential for meeting the energy strategy targets.

Location of CHP sites in the West Midlands

The amount of energy generated by heat sold has increased in the region by 47% between 2002 and 2004, driven mainly by increasing utilization of CHP in the commercial and public services sectors. As has been noted already, the regional figures may be distorted by larger CHP sites outside the region which are included in the national figure. Figure 9 shows the regional distribution of CHP sites. The sites are clustered around the urban areas, where in addition to relatively lower costs of connecting to the electricity network compared to rural areas; there is a greater concentration of the main consuming sectors.

Wood energy

Energy generated from wood has a number of advantages for the commitment of the region to meet carbon emissions targets, as a driver to enable competitiveness and in reducing pressure on landfill. The Wood Energy Strategy for the West Midlands highlights the benefits of wood as an energy source, including its small amount of net CO2 emissions, its relative cost against fossil fuels and the associated landscape benefits that may result from bringing neglected woods back into management. In addition to employment benefits arising from a greater use of locally sourced wood, the Wood Strategy also highlights the competitiveness factors such as the lower disposal costs for wood users and the reduced pressure on the region’s landfill sites. Capacity from wood energy boilers has been increasing more rapidly after 2003

While the market for wood used for energy generation is still embryonic, estimates from DEFRA indicate that the overall sustainable timber production in the West Midlands is around 230 km3 per annum, whilst the total amount of wood processed in the region amounts to some 425 km3 per annum. While growth in total capacity was progressive between 1990 and 1997, a step change in capacity occurred before 2001 and since then total capacity has been growing at an increasing rate, with cumulative capacity currently standing at 3,325 KW, produced by 23 sites across the region.

The drivers for critical mass, increased volumes and subsequent economies of scale in the market can be influenced by public sector management adopting wood as a viable alternative fuel. Public administration is a growing sector in the regional economy and already exhibits a greater use of heat sold than other sectors.

Biofuels for transport

Liquid biofuels are defined as liquid fuels that are derived from crops and waste cooking oil, primarily for use in road transport. As fossil fuel supplies become scarcer and likely to rise in price as demand continues to grow, biofuels may become an increasingly economically viable source of fuel.

The main reasons for the encouragement of development in biofuels are that they can be used in existing engine technologies as a way to reduce carbon emissions and can contribute to reductions in our reliance on fossil fuels. Assuming existing technological conditions, which preclude large scale production, expansion in biofuels is likely to be driven by the expansion of the number of small-scale producers.

Given the localised and small scale nature of its production and distribution, data on biofuels is limited. An audit of the region’s bioenergy capacity provides a good source of reference. On the supply side for liquid biofuels, the key findings were;

biodiesel produced in the Region comes from processed Waste Vegetable Oil. Existing processors are capable of producing between 7 million and 15 million litres per annum, much of which is used internally. Small scale diversification opportunities exist for farmers if capacity is allocated to grow oilseed rape specifically for biodiesel with supplies preferably confined to local markets to minimise net losses arising from transporting the fuel (so called ‘fuel miles’),
although a feasibility study to examine the cost-benefits of producing bioethanol from orchards in Herefordshire has been undertaken by Herefordshire Sustain, and potential exists for a market for sugar beet and fruit crops, at present there is no infrastructure for bioethanol production in the Region,
due to its two large biofuel processing plants the West Midlands accounts for 50% of the UK’s current production capacity, but the majority of production goes out of the Region, and
while there are a number of filling stations selling biodiesel at a 5% blend throughout the Region - fuel that can be used in every diesel vehicle – there continues to be a lack of awareness among motorists. A regional programme to help filling station owners promote the fuel and inform potential users about how they can use the fuel is being developed to help grow the number of filling stations stocking the fuel, and increase demand in the Region.