In June 2023, BHESCo were invited by The Marches Local Enterprise Partnership to deliver a Local Area Energy Plan (LAEP) for the region.

Three local authorities (Herefordshire, Shropshire and Telford & Wrekin) in the Marches Region declared climate emergencies in 2019, each actively working towards achieving carbon neutrality by 2030.

The purpose of the LAEP was to recommend the steps and actions to be taken by Herefordshire, Shropshire, and Telford and Wrekin to cut carbon emissions to meet their ambition to be Carbon Neutral by 2030.

Marches carbon emissions by sector
Marches carbon emissions by sector

BHESCo’s Approach & Decarbonisation Pathway

The most important finding from the LAEP that BHESCo produced for the Marches region is that It is impossible to meet a carbon neutral 2030 target.  We looked at carbon sequestration as a real option for early attainment, but there is no specific methodology for measuring biodiversity net gain, so although this is an excellent opportunity, there is work to be done in terms of creating a market standard. We estimate that reaching carbon neutrality will require an investment of £4.4 billion.

An important aspect of our Local Area Energy Plan is that we recommend using the natural resources, being wind, sun and animal waste to drive forward the local carbon economy. Utilising local energy resources will deliver economic prosperity, security of energy supply, and improved wellbeing for residents. 

Another aspect is that the annual targets that we have set for each region are achievable. It is important to form a committee that is responsible for delivering the target. The committee consists of public and private industry representatives that are motivated to manage the successful rollout of the plan.

Energy Efficiency

Although action to reduce energy consumption in our homes, public buildings and businesses can result in a 50% reduction in energy demand for heating, little is being done nationally to promote action on energy efficiency.

To reach Net Zero, it is crucial that a long-term, reliable energy efficiency programme is rolled out to residents by the relevant local authorities. This is especially pertinent for those homes burning oil and solid fuels for heating, as 30% of households across the Marches are off the gas grid. 

Combining the data from the UKERC study and available non-domestic EPC data, BHESCo have modelled a realistic rollout of energy efficiency improvements based on current rates of uptake, by which 95% of properties will reach EPC B by 2050.

Installation of energy efficiency measures and resultant decrease in annual heat demand

Low carbon heating

Heating is responsible for approximately 30% of carbon emissions across the Marches.

Eventually, all properties in the region must transition from fossil fuel heating systems to electric heating. Heating will be delivered through a variety of renewably powered systems, namely: air source heat pumps (ASHPs), ground or water source heat pumps (G(W)SHPs); and where appropriate, electric resistive heating.

Rural Areas

Across the Marches, 30% of homes are off the gas grid. Most rural communities have either electric storage heating or hot water heating systems powered by heating oil, solid fuels, like biomass or coal, or LPG. We recommend transitioning such properties to air source heat pumps (ASHP) as an efficient way to reduce carbon emissions, based on our own experience that GSHP’s higher upfront cost cannot be recouped by the incremental savings achieved through their running costs in the long-term.

Heat Networks

Heat networks are the lowest cost option in urban areas where many buildings of multiple occupancy have communal heating systems, whereby heat and hot water is generated by a centralised boiler.

In Hereford, 305MW has been identified from the river Wye as a potential source of heat. As new housing developments are submitted for planning, heat networks should be an essential component of building affordable housing. This can be incorporated into planning requirements by all local authorities in the Marches region.

The results displayed in the table below illustrate a 92% drop in carbon emissions from heating and a 50% increase in electricity demand.

As we recommend a fabric-first approach to implementing retrofit, we have also accounted for the impact of installing energy efficiency measures alongside heat pumps.

Heat pump rollout across the Marches and its effects on increasing electricity consumption and decreasing CO2 emissions.
Transition to heat pumps and its effect on increasing grid electricity demand (GWh) and decreasing carbon emissions from heat, with (b) and without (b) energy efficiency improvements

Availability of Skilled Labour

One of the significant barriers to meeting a Net Zero 2050 target is the availability of skilled labour to carry out the extent of the specialist work required.

The following table demonstrates the impact that poor, inconsistent policymaking has had on the trades. The Microgeneration Certification Scheme (MCS) was launched in 2010 when the Feed in Tariff was put into place for smaller renewable energy generation systems. The rebound in demand resulted from the launch of the Covid 19 Economic Recovery Plan, which funded the Social Housing Decarbonisation fund, as the cost of solar PV installations fell significantly during the period from 2016 to 2020.

The Herefordshire Low Carbon Technology Centre at the Holme Lacy campus aims to support 750 new learners in its first three years, providing training in low carbon and renewable technologies.

MCS certified yearly installs and (b) newly certified MCS contractors each year since 2009.

Transport

Transport is the UK’s largest carbon emitting sector with road transport representing 91% of its total emissions. In the Marches, the transport sector accounts for 26% of the region’s carbon emissions, second only to agriculture (34%).

In Telford, despite the proliferation of commercial facilities, there are very few charge points in its carparks. There is also a dearth of charge points along the motorways. Hereford only has 14 EV charge points. This inadequate infrastructure will only exacerbate people’s unwillingness to buy an EV.

A £950 million Rapid Charging, alongside £300 million from OFGEM’s Green Recovery Programme, is available to support the electrical capacity required at motorway and A-Road service areas. We are pleased to note that all councils in the Marches region secured funding through the Local Electric Vehicle Infrastructure scheme to install charge points between 2025 and 2029, totalling £3 million. Shropshire Council is working with Connected Kerb on their charge points, while Herefordshire Council is working with Wenea. Notably, Telford and Wrekin is the only council with a dedicated public EV charging infrastructure strategy. In their strategy document, they identify 1.5% of cars as EV. Nationally, 12.5% of all new car acquisitions are electric vehicles.

Electrification of vehicles across the Marches
EV rollout: decrease in C02 emissions from the transport sector and increase in grid consumption (GWh)

Renewable Electricity

Standing out prominently in our analysis from the preceding sections is the remarkable surge in grid electricity consumption expected with the transition to heat pumps and EVs across the Marches.

It is evident that to match this rising electricity consumption and reach net-zero carbon emissions by 2050, a rapid transition to renewable energy is required alongside the continual upgrading of grid infrastructure.

Our preference for producing home-grown electricity stems from an aim to enhance affordability for residents and ensure security of supply. In terms of land use efficiency, onshore wind surpasses solar PV, generating nearly nine times the electricity per hectare. Regarding costs, solar PV costs are projected to decrease by 73% by 2050, driven by improvements in module capacity and declining production costs

Wind Power

Community energy groups, like the Sharenergy/Marches Energy Agency partnership, is a good way to develop onshore wind projects. As onshore wind planning approval requires the consent of local residents, these groups are connected to trusted and respected leaders in the community who endorse the project. Development approval can be achieved through the offer of community ownership and community benefit, as people respond more positively when they obtain some benefit from the development. This is achieved by allocating a share of the annual profits from the generator to a Community Benefit Fund.

Energy suppliers like Ripple Energy and their deployment partner Octopus Energy. These developers also offer community benefit that is attractive to residents, bringing people together in a positive way. Their engagement methods differ as they currently require participating customers to use one particular energy supplier, which may discourage participation and support. We would like to see the energy market opened up more to peer to peer trading so that residents local to renewable energy systems can benefit directly from low-cost electricity generation at the site.

Commercial developers are a means to encourage development to fund the projects. As the requirement for onshore wind is very high, it will be important to engage all potential developers, to determine the more affordable and effective methodology for deploying cheap, onshore wind generated electricity. Community benefit can be embedded as a requirement for planning permission.

Marches Onshore Wind Potential

Solar PV

In total, we have identified 435GW of ground mounted solar capacity in Shropshire and Herefordshire, with an estimated average annual generation capacity of 415TWh. The large number of industrial parks in Telford and Wrekin lend themselves to rooftop solar generation. Encraft’s 2018 report identified 39 MW of rooftop solar potential in Telford and Wrekin, the largest in the region.

To achieve a 2050 target, 126 solar installations must be installed on non-domestic buildings each year. The Marches 2030 Vision report identified 3kW of solar generation for 300,000 households in the region. To achieve this vision by 2050 would require 44 solar installations per day.

Three key installation channels that we highlighted include:

Community Energy:

  • Leverage existing community energy groups or champions in each county.
  • Partner with the Big Solar Co-op, a Shropshire-based social enterprise incubated by Sharenergy.

Energy suppliers:

  • Octopus Energy offers a solar PV home installation service.
  • Consider community benefits when choosing between commercial offerings.

Commercial contractors:

  • ECO4 grants incentivise contractors to increase solar PV installation capacity.
  • Higher initial costs, but lower for consumers due to grant support.
Marches Ground Mounted Solar Potential

Biomethane

Central government published its biomass strategy in August 2023, suggesting that Anaerobic digestion should be increased five to eightfold to reach net zero. the continued use of the gas network is an important asset that delivers significant value to the areas it serves. Secondly, production of biomethane from animal waste diverts a methane producing product into a revenue generating one.

Capturing and processing all organic waste should be an immediate priority. Based on our analysis of tonnes of manure produced by the region each year, we have estimated that if all of this was captured and treated, 67.7GWh of heat could be provided, serving 6 million homes on the gas grid, or 54% of Cadent’s customers. 

As wholesale gas prices are projected to continue increasing to 2035xli, the significant commercial opportunity of a home-grown source of biogas will bring an annual revenue potential of £393 million, based on an average wholesale gas price of 5.5p/kWh while diverting the methane emissions from animal manure.

Potential biomethane to grid locations across the Marches

Financing the LAEP & Economic Benefit

This table shows the projected generation, investment, and cost per GWh for the renewable energy recommendations included in this report.
The installation cost for the AD plant is higher, but the running costs are lower and profit margins are higher.
We recommend creating biomethane from the abundant animal manure produced in the region.

While the investment is £4.4 billion, we estimate that the GVA generated over the period to 2050 is £60billion, mostly from the creation of local electricity generation, jobs creation and biomethane production. or an average of £100M in GVA to the Marches region per year in the first five years)alone.

We estimate that if a community ownership model is developed, that £6million of community benefit will be generated should community benefit be incorporated into the planning and procurement policies associated with the development of local heat and power generation.

Total renewable energy investment required

Jobs Growth Ambition:
* Aim to create jobs growth at 15% per year.
* Transition areas for job creation:
* Upskilling trades for energy efficiency.
* Onshore wind development and construction.
* Energy infrastructure planning and construction.
* Heat pump installers.
* Solar PV installers.
* Project developers and managers.
* Procurement and manufacturing.
* EV charging installations.
* Alternative fuel production (biofuels and biomethane).

Economic Contribution:
* Total estimated GVA contribution from plan recommendations: Over £60 Billion by 2050.

Policy Recommendations

1) Local Authorities Leadership:

  • Demonstrate leadership in guiding and overseeing actions.
  • Exercise power to enact legislation encouraging private industry and community social enterprise investment in recommended infrastructural changes.

2) Energy Pricing Transformation:

  • Shift environmental levies on electricity to gas.
  • Make heat pump operation economically attractive by reducing electricity prices relative to gas.
  • Encourage low carbon heating adoption, aiding property owners in replacing fossil fuel boilers.

3) Strategic Grid Investment:

  • Address fuel poverty through private financing for grid investment.
  • Regulate grid investments for steady and reliable returns, reducing risk for investors.
  • Ensure fair distribution of investment to prevent regional disparities in energy access.

4) Electric Vehicle Subsidy and Infrastructure:

  • Subsidise 7kW home EV charging points and 7-22kW points in office/industrial complexes.
  • Install 50-180kW supercharging points on motorways.
  • Government to address infrastructural issues causing range anxiety before implementing large-scale EV subsidies.

5) HGV Charging Infrastructure:

  • Plan for 250kW HGV charging at service stations.
  • Integrate considerations into regional transport strategy for effective connections with Distribution Network Operator.

6) OFGEM Regulation and Project Delays:

  • Regulate to manage connections to the National Grid logjam.
  • Require developers to meet key milestones or risk losing consent to connect.
  • Transfer consent to developers actively contributing to clean generation or storage assets.

7) Local Planning Authorities Bold Actions:

  • Set planning policies for new homes to achieve net-zero carbon emissions.
  • Allow thermal improvements for existing buildings without impacting appearance.
  • Adapt restrictive rules on secondary glazing, underfloor insulation, and heat pump siting.

8) Building Regulations Modification:

  • Modify Building Regulations (Part L) to phase out fossil fuel heating systems in new developments.
  • Distribute social and environmental levies to gas tariffs, making electric heating by efficient heat pumps more affordable.
  • Ban gas boiler installations in new builds by 2025 and make homes “heat pump ready” by 2030.

9) Peer-to-Peer Energy Trading:

  • Open energy market to peer-to-peer trading.
  • Enforce regulatory requirement for licensed energy suppliers to facilitate local residents benefiting from low-cost electricity generation.

Next steps

1) Local Authorities Leadership:

  • Demonstrate leadership in guiding and overseeing actions.
  • Exercise power to enact legislation encouraging private industry and community social enterprise investment in recommended infrastructural changes.

2) Energy Pricing Transformation:

  • Shift environmental levies on electricity to gas.
  • Make heat pump operation economically attractive by reducing electricity prices relative to gas.
  • Encourage low carbon heating adoption, aiding property owners in replacing fossil fuel boilers.

3) Strategic Grid Investment:

  • Address fuel poverty through private financing for grid investment.
  • Regulate grid investments for steady and reliable returns, reducing risk for investors.
  • Ensure fair distribution of investment to prevent regional disparities in energy access.

4) Electric Vehicle Subsidy and Infrastructure:

  • Subsidise 7kW home EV charging points and 7-22kW points in office/industrial complexes.
  • Install 50-180kW supercharging points on motorways.
  • Government to address infrastructural issues causing range anxiety before implementing large-scale EV subsidies.

5) HGV Charging Infrastructure:

  • Plan for 250kW HGV charging at service stations.
  • Integrate considerations into regional transport strategy for effective connections with Distribution Network Operator.

6) OFGEM Regulation and Project Delays:

  • Regulate to manage connections to the National Grid logjam.
  • Require developers to meet key milestones or risk losing consent to connect.
  • Transfer consent to developers actively contributing to clean generation or storage assets.

7) Local Planning Authorities Bold Actions:

  • Set planning policies for new homes to achieve net-zero carbon emissions.
  • Allow thermal improvements for existing buildings without impacting appearance.
  • Adapt restrictive rules on secondary glazing, underfloor insulation, and heat pump siting.

8) Building Regulations Modification:

  • Modify Building Regulations (Part L) to phase out fossil fuel heating systems in new developments.
  • Distribute social and environmental levies to gas tariffs, making electric heating by efficient heat pumps more affordable.
  • Ban gas boiler installations in new builds by 2025 and make homes “heat pump ready” by 2030.

9) Peer-to-Peer Energy Trading:

  • Open energy market to peer-to-peer trading.
  • Enforce regulatory requirement for licensed energy suppliers to facilitate local residents benefiting from low-cost electricity generation.
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