How should towns and cities approach local area energy plans?

Heating buildings and water accounts for 20% of the UK’s carbon emissions and 85% of homes (24.5m) are heated using natural gas. On top of this, 80% to 90% of buildings in use today in the United Kingdom will still be in use in 2050. Decarbonising heating energy is going to be crucial to achieving net zero targets by 2050.

United Kingdom | 07 March 2022
Reading Time : 5 minutes

By Oliver Clay, Consultant, Sustainability and Climate Change at WSP

The highest concentration of buildings is in towns and cities. Local authorities’ approach to energy plans may determine the success of national decarbonisation efforts. The UK Government and the Energy Systems Catapult piloted a new approach, with Newcastle, Bridgend and Greater Manchester the testbed for Local Area Energy Plans (LAEP).

A LAEP is a new strategic framework and evidence base used to co-ordinate and support decision-making for communities, innovators, planners, residents, and investors. This article explores the impact of LAEPs within the three testbed areas and explores whether they provide a model to be followed by towns and cities across the rest of the UK.

Different approaches, consistent challenges

Each urban area approached LAEPs differently, but they all had the shared purpose of improving the service to residents, decarbonising their housing stock, and tackling fuel poverty. They also face consistent challenges. This includes persuading consumers to adopt new technologies, diversifying and upskilling their workforces, ensuring sufficient capacity to deliver plans, building new relationships with stakeholders, and all within a short timeline.

Yet authorities in towns and cities have a unique position to deliver on net zero. They can connect disparate local actors and identify suitable inward investment. The LAEP provides a framework through which authorities can deliver behaviour change, environmental benefits, and investment that accentuates the local multiplier effect, boosting their economies.

Case Studies: Local Area Energy Plans (LAEP)

Greater Manchester Combined Authority

Greater Manchester used their LAEP to create Value Sharing Propositions to reward consumers for carbon conscious choices. They have also developed a Local Energy Market to stimulate innovation and create an energy ecosystem which accommodates digitalisation, demand management and improves technologies.

Bridgend County Borough Council

Bridgend emphasised the importance of engaging stakeholders early and consistently to create a living LAEP document. They focused extensively on skills, working closely with Bridgend College on green transition courses. The LAEP could create £7.4bn of inward investment, their largest economic opportunity for the next 30 years.

Newcastle City Council

Newcastle focused on unlocking significant private sector investment to deliver new jobs, economic growth and lower energy bills. They worked with their Distributed Network Operator (DNO) and Gas Distribution Network Operator (GDO) to model networks and target interventions. Their LAEP adopts a new phased roll out, by planning to install gas-hybrid heat pumps before a transition to electric only post-2030 to benefit from future technological improvements.

Where should local authorities focus their attention?

The three testbed areas provide insight into approaches that future local authorities should take when developing their own LAEPs. Reflecting on the testbeds, as well as our own experience working with towns and cities on their energy and net zero plans, here’s our five areas for focus for local authorities developing LAEPs:

Retrofit first: All existing LAEPs focus on the impact of retrofitting properties as a first step. If funding can be found, there is a clear opportunity for immediate impacts on fuel poverty, employment, demand management as well as emissions reductions.
Embracing district heating and electrification: The LAEPs saw district heating as their preferred option for heating in buildings. The exponential growth in UK renewable capacity also makes electrification an attractive option.
Digitalisation: Digitalisation is a key theme in all LAEPs, with the central strength highlighting the role of technology in helping local authorities to understand and better manage energy demand across their geographies.
Community energy: Community energy groups provide additional expertise, volunteers and capital. Leveraging £50m in private investment from £7.4m in public funding. They provide a different perspective from energy companies, adding to the diversity of local actors focused on delivering clean energy at scale.
Procurement: The public sector is one of the largest local employers and is also a substantial purchaser; sustainable procurement policy can support decarbonisation in local supply chains in line with the Social Value Act 2012.

To successfully deliver LAEPs, our experience shows it’s important to genuinely engage multiple stakeholders to create a relevant plan that anticipates problems, utilises local knowledge, and can be financed and actioned from multiple sources, whether public, private, individual, or community. Short, medium, and long-term deliverables and reporting are needed for accountability whilst people must be supported with the right skills and resources.

This underlines our approach to supporting the capacity of councils to deliver LAEPs by assisting with funding and grant applications, providing best practice and modelling advice, identifying funding sources, ensuring regulatory compliance, and developing communication strategies. Through this we help our clients to offer consumers attractive and reliable low carbon choices that are key to ensuring a successful transition towards net zero.