Forging Scotland'S Way ahead

Forging Scotland’s Way Ahead: Ten projects for a low carbon future

A report to the Low Carbon Infrastructure Task Force By Mark Crouch and Valerie Robertson

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Forging Scotland’s Way Ahead

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Contents

Executive Summary

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Purpose of this report

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Approach taken

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Long list of projects

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1. Introduction

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1.1 Purpose of this report

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1.2 Case for Low Carbon Infrastructure

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1.3 Policy Context

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2. Approach

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2.1 Identifying priority areas for case studies

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2.2 Eligibility for case studies

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2.3 Stakeholder feedback and general observations

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2.4 Long list of projects

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2.5 Notable runners-up

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3.

Case Studies

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4.

Developing Low Carbon Infrastructure

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4.1 Findings

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4.2 Conclusion

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Acknowledgements

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Reference List


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Executive Summary Purpose of this report This report looks beyond Scotland’s publically supported current infrastructure pipeline to identify the kind of low carbon infrastructure that will be needed to help meet Scotland’s climate change targets. It is intended to build upon the momentum already generated by the Scottish Government in developing low carbon infrastructure policy frameworks. This work has been commissioned by the Low Carbon Infrastructure Task Force, an independent body established as part of a WWF Scotland initiative. The objective of the Task Force is to champion and encourage the public sector to fund and/or facilitate the finance of low carbon infrastructure. It brings together key figures across the infrastructure lifecycle in Scotland, from the public and private sectors, construction and finance industries, and academia, under an independent chair. This report builds on the first piece of work commissioned by the Task Force, “The Case for Low Carbon Infrastructure in Scotland”. A ‘long list’ of infrastructure projects has been developed that are of a sufficient scale to help achieve the transition to a low carbon Scotland as required by the Climate Change (Scotland) Act. The term ‘project’ here refers to possible projects (and programmes that could enable such projects) that the Scottish Government could support through policy development and direct investment.These projects are additional to existing projects or those that the government have already committed to. In developing the long list of projects, the starting point was the Task Force’s definition of low carbon infrastructure: “infrastructure that will enable Scotland’s people and businesses to thrive and prosper in a low carbon society for many generations, in line with the requirements of the Climate Change (Scotland) Act.” The objective is to present case studies for ten projects or programmes that are bold, transformative, have a significant role for the public sector and can be scaled to match investment on the level of the major highways schemes. The projects are intended to be additional to committed infrastructure spend and long term in their outlook.

Approach taken In developing these case studies a number of key stakeholders in both the private and public sector have been interviewed to both assist with identifying projects and inform their definition. The case studies are centred around the key decarbonisation opportunities of heat, transport, energy efficiency and community energy storage.

Long list of projects The final list of projects is shown below: 1.

Major upgrades of existing rail network

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New high speed rail in Scotland

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Re-engineering cities to favour non-motorised transport

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Low carbon transport hubs

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Programme of district heating schemes targeted at high rise domestic properties

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Semi-rural district heating networks

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Urban district heating network

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Energy efficiency retrofit programme, addressing domestic, public sector and commercial buildings

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Grow local energy economies with community scale energy storage

10. Energy from wastewater programme


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Each project has a concise case study which includes: A Overview and justification for inclusion A Context (policy, current activity and key trends) A Role of the public sector A Carbon reduction potential A Economic viability A Timescale A International comparison and best practice A Role for smart technologies A Systems level approach A Link to other case studies A Benefits assessment (additionality, prosperity, co-benefits, environment and behaviours) The approach to developing low carbon infrastructure needs to be systems level, taking an area based, cross-sectoral view to understand how projects complement each other. There are lessons that Scotland can learn from infrastructure development internationally, where evidence-based strategic plans are developed and followed through. In researching and producing this report it is clear that there remain some key barriers to delivering low carbon infrastructure, but there is also in many cases a clear role for the public sector - funding the high risk or long return period initial capital investment phase of projects, in order to lever in private sector investment. This requires making the bold, long term choices, rather than waiting for the market to decide. This report should stimulate debate within Scotland on the type and location of new infrastructure that we need to help us meet our climate change targets. These are ideas that could see Scotland move to the fore within the UK, and show the necessary leadership required to demonstrate how a low carbon society can be delivered. The case studies have been developed in consultation with key infrastructure providers, academics, the private sector and the investment community and should allow for an open debate on what a future Scotland should look like.


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1. Introduction The Scottish Government has an ambitious set of targets to reduce greenhouse gas emissions: AA 80% reduction in greenhouse gas emissions by 2050; AA Largely decarbonised electricity sector by 2030; AA Almost complete decarbonisation of road transport by 2050, with significant progress by 2030; AA Largely decarbonised heat sector by 2050, with significant progress by 2030; AA Zero waste economy by 2050. These targets are ambitious, surpassing those in place at a UK level, and Scotland is making faster progress on cutting emission than the UK as a whole. However, the Scottish Government has not succeeded in meeting its first four annual targets despite significant progress in some sectors such as renewable electricity. Substantial challenges remain in many areas including as transport, heat and energy efficiency if the emissions targets are to be met by 2050. The urgent step-change that is required will only be achieved through significant development in low carbon infrastructure. Putting in place the right foundations now is critical to avoid locking Scotland into a high carbon future. These strategic decisions will dictate how we travel, heat our homes and power our industries now and through to 2050. They will also shape the profile of our economy, influencing the types of jobs we will have in the future. Transitioning to a low carbon economy in Scotland requires billions of pounds in investment, but much of this cost needs to be spent anyway to modernise and maintain our infrastructure networks. Reorienting investment to include low carbon infrastructure and technology will reduce overall costs and secure lower emissions in the future.. While much of this investment will be driven by the private sector, the public sector has a critical role to play. With public finances under tight constraints, getting clear value for money and supporting wider strategic objectives are essential. The wider advantages of low carbon infrastructure are numerous. They include creating and sustaining jobs, addressing fuel poverty, increasing energy security, supporting active lifestyles, and improving air quality. Investing in low carbon infrastructure aligns with the preventative spend agenda, which aims to reduce public service costs by addressing policy problems at an early stage. As well as providing short-term fiscal stimulus, green investment can rebalance the economy away from debt-financed consumption toward stable growth.

1.1 Purpose of this report This report is intended to look beyond the current infrastructure pipeline to identify the kind of low carbon infrastructure that will be needed in the coming decades, and that could be delivered with the right public sector support. The public sector has a clear role in catalysing infrastructure development through funding, policy and regulation. This work has been commissioned by the Low Carbon Infrastructure Task Force, an independent body established as part of a WWF Scotland initiative. The objective of the Task Force is to champion and encourage the public sector to fund and/or facilitate the finance of low carbon infrastructure. It brings together key figures across the infrastructure lifecycle in Scotland, from the public and private sectors, construction and finance industries, and academia, under an independent chair. This work builds on the Case for Low Carbon Infrastructure in Scotland report, which is summarised in Section 1.2 below. A ‘long list’ of infrastructure projects has been developed that are the types of project necessary to achieve the transition to a low carbon Scotland. The term ‘project’ here refers to possible projects (and programmes that could enable such projects) that the Scottish Government could invest in, given current plans, future needs, and the requirements to achieve emission reduction targets by 2050. These projects are additional to existing projects or those that the government have already committed to. In developing the long list of projects, the starting point was the Task Force’s definition of low carbon infrastructure: “infrastructure that will enable Scotland’s people and businesses to thrive and prosper in a low carbon society for many generations, in line with the requirements of the Climate Change (Scotland) Act.”


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Infrastructure must be prioritised in terms of the value it provides to society in addition to reducing carbon emissions; the focus therefore should be on the social and economic outcomes that are supported by infrastructure. For each project identified, a short case study has been developed which explores the following: A Overview and justification for inclusion A Context (policy, current activity and key trends) A Role of the public sector in developing the projects A Carbon reduction potential A Economic viability A Timescale A International comparison and best practice A Role for smart technologies A Systems level approach A Link to other case studies A Benefits assessment (additionality, prosperity, co-benefits, environment and behaviours) Wider economic, social and environmental benefits are identified, along with any potential negative impacts and the key challenges/barriers to delivery. Desk top research and interviews with key experts and stakeholders have informed the research. The selected projects aim to capture a wide range of sectors and geographies across Scotland. Further detail on the approach to identifying and selecting projects is provided in Section 2.

1.2 Case for Low Carbon Infrastructure The key findings from a report commissioned by the Task Force, the “Case for Low Carbon Infrastructure in Scotland,” informed this work and are summarised here. 1.2.1 The public sector role

While infrastructure funding has largely come from private sources in recent years, public sector funding has a unique role to play by: A Investing in long-term enabling infrastructure such as transport; A Anticipating and supporting future infrastructure needs; A Stimulating innovation; A Overcoming barriers to unlock private sector funding; A Addressing market failures; A Supporting and enhancing wider social benefits such as health and education. Aside from funding, government can create industry confidence through clear policy commitments. The public sector also has an important coordination role in enabling a cross-sectoral approach, packaging projects to achieve economies of scale, and developing the skills and capacity required to drive projects forward. 1.2.2 Current infrastructure investment

The Scottish Government’s current Infrastructure Investment Plan acknowledges that infrastructure should be viewed as a tool for supporting positive social and economic outcomes, namely high value

The urgent stepchange that is required will only be achieved through significant development in low carbon infrastructure.

public services and improved connectivity to support access to employment and to build economic resilience. The economic strategy echoes this position and also notes that investment must be prioritised to maximise “the opportunities offered by the transition to a more resource efficient, lower carbon economy.”1 There are considerable challenges, as well as opportunities for shifting the infrastructure landscape. For example, the discussion of low carbon infrastructure tends to be limited to energy generation, transport and domestic energy efficiency, receiving only a cursory mention with regard to the other infrastructure types. Rather than seeing low carbon as a specific type of infrastructure, a low carbon approach should be adopted for all infrastructure development.

1.2.3 Benefits of low carbon infrastructure

Making low carbon the central criterion for prioritising infrastructure development will have many complementary benefits. Economy AA Economic progress and resilience. AA Job creation and skills development. AA Supporting domestic industry. Forging Scotland’s Way Ahead

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AA Driving innovation. AA Energy security. Environment AA Improving air quality. AA Influencing behaviour change. Social AA Health benefits. AA Reducing fuel poverty. AA Strengthening local communities. 1.2.4 Low carbon infrastructure opportunities

Transport, heat and energy efficiency have been identified as key opportunities for progress on low carbon infrastructure. The decarbonisation of road transport through a shift to electric vehicles (EVs) is currently the primary focus of the Scottish Government in terms of the transport sector. This must be undertaken in line with the requirements of renewable energy capacity to support EVs. It is recognised that modal shift to public transport and active travel is critical; however investment in these areas is currently lacking. District heating is a key focus area as well as the potential for geothermal and anaerobic digestion as heat sources. The waste sector will require significant reform to meet the target of 5% waste to landfill by 2025 and zero waste by 2050. There are significant opportunities for on-site generation and storage which could see Scottish Water as a net energy provider. Energy efficiency in the housing sector is seen as critical to economic recovery, addressing fuel poverty as well as the transition to a low carbon economy. The recent commitment to tackle this as a national infrastructure priority is welcome, and opens up further opportunity for investment in retrofitting all buildings. 1.2.5 Prioritising projects: assessment criteria

The wider benefits described in section 1.2.3 have been incorporated into a set of assessment criteria which are presented in Table 1. The criteria also serve to illustrate that while no single infrastructure project can deliver the full range of benefits, there are potential synergies to explore across a range of investments that could collectively provide the desired outcomes. Each of the case studies presented in this report have been comparatively assessed against these key criteria, using a traffic light system. Carbon does not appear as a separate criterion, on the basis that all of the case studies have been selected on ability to achieve carbon savings. Table 1 – Assessment criteria for wider benefits of low carbon infrastructure Criterion

Description

Additionality

Adds to existing efforts, rather than replacing them

Prosperity

Contributes to the prosperity of Scotland’s people and businesses

Co-benefits

Social benefits in addition to economic and environmental benefits

Environment

Furthers environmental goals other than carbon abatement

Behaviours

Enables low carbon choices for all

1.2.6 Evaluating deliverability

There are a number of financial and regulatory components that must be in place for certain types of infrastructure to be deliverable. Many of these components are either controlled or strongly influenced by government; thus the public sector has a significant role to play in supporting the delivery of low carbon infrastructure: Investor and enabler Public investment is needed to fund enabling infrastructure such as improved interconnections and energy storage, which are harder to package as private sector investment opportunities. Public investment is also key to leveraging private sector funds. Support emerging technologies Enabling them to become commercially viable and supporting high risk initial capital investment.


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Supportive context to encourage private investment Creating policy certainty, setting out clear infrastructure plans, and improving administrative capacity at the local authority level: a strong policy framework is also a driver for behaviour change. Anticipate and respond to national trends Such as population growth, urbanisation and digital connectivity: the government is often best placed to provide that cross-cutting view to support positive outcomes across a range of policy objectives, sectors and activities.

1.3 Policy Context 1.3.1 Climate Change (Scotland) Act

The Climate Change (Scotland) Act 2009 set statutory targets for emissions reductions in Scotland2, of: A 42% reduction by 2020; A 80% reduction by 2050. A requirement of the act is to report on the policies and proposals for meeting the annual, interim 2020, and 2050 targets. The reports must also set out the respective contributions toward meeting the targets that should be made by energy efficiency, energy generation, land use and transport. The package of policies and proposals in RPP2 have the potential to deliver emissions abatement that would meet the targets set to 2027. However, the UK Committee on Climate Change in its 2015 progress report for Scotland concludes that more action is needed to meet future targets. RPP3 which will report on the next set of targets for up to 2032 is due to be published in 2016/2017. It is intended therefore that the case studies presented in this report could be used to inform the policies and proposals selected for RPP3. 1.3.2 Government Economic Strategy

Scotland’s Economic Strategy sets out an overarching framework to increase competitiveness and tackle inequality in Scotland. It identifies four broad priority areas for action, one of which is sustainable economic growth, resting on a requirement to make the transition to a more resource efficient, low carbon economy. The strategy mentions some specific opportunities offered by the transition, including renewable heat, transforming Scotland’s islands into renewable energy hubs, decentralisation and community owned schemes. Scotland’s Third National Planning Framework, NPF3, is the spatial expression of the Government Economic Strategy and sets out the plans for infrastructure investment. Making Scotland a low carbon place is one of the four strategic planning outcomes, specifically to: A be a world leader in low carbon energy generation, both on and offshore; A be more efficient and produce less waste; and A to largely decarbonise our travel. 1.3.3 Strategic Transport Projects Review (STPR) 2008

The Strategic Transport Projects Review (STPR, 2008), sets out the Scottish Government’s transport investment priorities over the period to 2032. The recommendations identified are those that most effectively contribute towards achieving the objectives of the Government Economic Strategy. A total of 29 major packages of work were put forward which were deemed to best meet the investment priorities of the National Transport Strategy, namely: A improving journey times and connections; A reducing climate change and air quality emissions; and A improving quality, accessibility and affordability. Some of the packages of work include reconfiguring the National Rail timetable, the use of integrated ticketing and intelligent transport systems, the Forth Replacement Crossing, Edinburgh to Glasgow rail improvements, upgrading the A9 from Dunblane to Inverness, and upgrading Edinburgh Haymarket station, among others. Despite these measures, analysis of the overall impact of the STPR shows a net increase in emissions3. 1.3.4 Energy Policy

Under the Scotland Act 1998 that created the Scottish Parliament, energy policy remains a matter that is specifically reserved to the UK Parliament, although energy efficiency policy is devolved. Despite the general reservation, some energy matters have been devolved by secondary legislation to Scottish Ministers, including the Renewables Obligation and consent for power generation.


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Other legislative powers such as planning and environment are also devolved. Thus, even though energy is a reserved matter, Scottish Government has the ability to shape the direction of energy generation in Scotland by exercising its devolved powers. The net effect is significant development of renewable generating capacity and an effective block on new nuclear development.

2. Approach 2.1 Identifying priority areas for case studies Project ideas have been developed by assessing the breakdown of Scotland’s carbon emissions and grouping them into four broad sectors: Electricity supply: The large scale power sector is considered outside of the scope of this project, as it is an area that the Scottish Government and public sector can have little influence on in a UK energy market. Smaller community scale generation is within scope as long as there is a public sector role in the development. Energy storage is necessary to underpin a low carbon future as it enables the instantaneous balance of power supply demand which is critical for distributed and renewable generation. Grid and interconnection issues are considered in scope provided there is a sufficient role for the public sector in developing projects. Aviation, International Shipping, Transport: Aviation abatement measures are considered out of scope given the limited ability of the Scottish public sector to influence these measures. International shipping is also considered an area that Scotland has limited scope to influence, but transport within Scotland is a priority focus area; including personal transport, freight and distribution. Waste, Agriculture, Land Use and Forestry: The infrastructure focus gives limited opportunities to focus case studies around carbon abatement measures in the agriculture, land use and forestry sectors. Waste management and circular economy approaches have an important role in reducing emissions and it is noted that potential projects need to be infrastructure developments rather than simply behavioural change. New large scale energy from waste facilities are not considered a priority, primarily because they can undermine recycling and circular economy approaches by dis-incentivising waste minimisation. The use of existing energy from waste plants to feed into heat networks is within scope. Public, Business & Industrial, Domestic: Heat is a priority area for the case studies, given the large contribution it makes to overall emissions. It is seen as an area that the public sector can have an important role in developing. Energy efficiency for domestic, business and public sector buildings is also a priority area.

2.2 Eligibility for case studies Within priority project areas identified, a set of case studies have been developed that fulfil the following criteria: Types of infrastructure: The context for this study is highlighting projects that capital budgets could be focussed on, the case studies aim to identify what may be considered more ‘hard’ infrastructure – developing new or upgrading existing facilities or systems. Despite this, infrastructure is not just about the ‘kit’, but should be designed to enable behaviour change. It should not be considered in isolation, but requires a systems level approach, where an area based, cross-sectoral view is taken to understand how projects complement each other. Required outcomes: The case studies are intrinsically low carbon in nature. The Task Force’s definition of low carbon infrastructure also highlights social and economic outcomes, and does not view economic growth as an end in itself. Time frame for project implementation: The case studies identify projects that have not already been committed to, and which are therefore generally 5 years or more into the future. The projects are framed around achieving the 80% emissions reduction by 2050. Although the case studies may consider what Scotland may look like in 2050, the case studies are focussed on infrastructure projects rather than specific technologies. Definition and description of projects: The case studies refer to a project or a programme rather than simply broad themes, and are intended to have a sense of place. Where programmes are proposed there is no geographic definition. Where infrastructure projects are proposed that are be suitable for Forging Scotland’s Way Ahead

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multiple locations with similar characteristics, example locations are given to provide a sense of place. However, as no objective assessment has been undertaken to compare the relative merits of different locations, this should not be taken to indicate a priority for the example location over any other. Cost-Benefit Analysis: Current measures for assessing costs and benefits have limitations when applied to low carbon infrastructure as they tend to favour low payback periods and partial economic gains over social and environmental objectives. Given the broad range of project types, scales and level of definitions, attempts to assess costs and benefits across the case studies would be misleading and are therefore not presented.

2.3 Stakeholder feedback and general observations Some general observations have emerged during the stakeholder interviews and during the development of the case studies that apply to the development of low carbon infrastructure across multiple case studies. Some of the key observations are presented here: A As an overall generalised observation, Scotland (and the UK) would benefit from the more strategic, evidence-based approach to developing solutions that is often observed in Europe. A Lengthy delays in infrastructure development add substantially to project costs, with politics and planning delays among the contributory factors. There is a widely held view that the UK could learn from international experience of infrastructure delivery in this regard. A The “chicken and egg” analogy is commonly used when referring to the development of different kinds of infrastructure. If left to the market, infrastructure may not be built because there is no established case for demand, yet the demand cannot grow without the infrastructure. This analogy was applied to heat networks, rail infrastructure and grid upgrades. In these cases, bold, transformative action may be required, allowing the demand to follow; A In the case of local authorities, capacity and capability to develop projects is limited, particularly with constrained budgets. To successfully develop projects local authorities need to develop capability, focus, provide capital and lead with planning requirements; A There are few examples of collaboration between local authorities, which may mean that limited resources are not being used most effectively. Sharing of learning, aggregating projects across boundaries, common standards and procurement frameworks are all measures that could aid the development of low carbon infrastructure. Some degree of compulsion for local authorities to collaborate may be required. A Scale-up of projects is required to attract institutional investors, which may require operating across sectors and local authority boundaries to aggregate into portfolios; and A The lack of developed heat networks was identified as a key constraint across many different technology providers. Hydrogen, fuel cells, water companies, future cities, waste management, geothermal, industry and heat pumps all independently identified heat networks as being a key infrastructure priority for reducing carbon emissions. The development of the networks is technology neutral and can allow a diverse range of heat generation and offtake users to develop.

2.4 Long list of projects The long list of projects is shown below, which are detailed in Section 3 of the report with justification for their inclusion: 1. Major upgrades of existing rail network 2. New high speed rail in Scotland 3. Re-engineering cities to favour non-motorised transport 4. Low carbon transport hubs 5. Programme of district heating schemes targeted at high rise domestic properties 6. Semi-rural district heating networks 7. Urban district heating network 8. Energy efficiency retrofit programme, addressing domestic, public sector and commercial buildings 9. Grow local energy economies with community scale energy storage 10. Energy from wastewater programme Forging Scotland’s Way Ahead

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2.5 Notable runners-up Many project ideas and technologies have been considered that have not been included in the long list of case studies. Some notable ideas considered are mentioned below: A A range of emerging technologies with potential to be integrated into future infrastructure projects, but not scalable into infrastructure projects in their own right. These include technologies such as: • Solar Roads, which has been trialled in a few pilot projects including solar bike lanes; • PaveGen, which uses pedestrian footfall to generate electricity; • Celtic Renewables and similar approaches to using waste and co-products from the whisky industry to develop biofuels. A Smart-city technologies and Internet of Things. These kinds of technological solution are likely to influence energy and carbon management in a multitude of ways, particularly in the context of the 2050 timeframe. Smart technologies and communications are not defined as a stand-alone project, but rather as a cross-cutting theme that will influence each of the case studies. A Light surface rail or other surface city transport schemes. Despite consultation with a range of travel planning experts no schemes have been highlighted as a priority for the cities, with the view that existing travel infrastructure was sufficient for the size of and population distribution in the cities, and that the focus should be on intercity travel, freight and distribution and other means of influencing modal shift. The exception to this is the completion of the Edinburgh tram, which has been highlighted but is not considered additional given that it may be promoted through the City Deal. It is highlighted that this does not preclude the need for additional surface transport schemes across Scotland, but that identifying specific schemes has not been a focus in this study. The need for surface transport schemes and a systems level approach to planning public transport has been highlighted in several case studies. A Grid connectivity issues within Scotland. This underpins low carbon electricity generation and demand, particularly with a focus on electrifying heat and transport. Connectivity within Scotland is an issue for low carbon generation, as it places a constraint on renewable generation. Orkney is one example of many, where there are good wind and marine resources, yet unless transmission infrastructure is improved, an inability to export electricity will limit new capacity and load factors of renewables. Clearly there are constraints within Scotland that restrict new renewable development, however because these are dealt with in the UK electricity market structure there is limited opportunity for the Scottish Government to influence these issues. However, it is noted that local grid constraints are addressed in a case study that considers community scale energy storage. A Grid interconnection, which generally refers to connections between national markets. There are proposals in place for an interconnector between Peterhead and Norway (NorthConnect), although there are also competing proposals that would connect Norway with north east England instead. It is noted that should this result in lower grid carbon intensity, it will affect the UK market as a whole rather than Scotland. This is beyond the control of the public sector in Scotland and has not been taken forward. A Hydrogen as a standalone case study. Hydrogen has been included in the Low Carbon Transport Hubs case study, but has not been included in its own right. Although proponents of hydrogen and fuel cell technologies may support public sector backed deployment of hydrogen infrastructure, there are differences of opinion over efficiency and costs. A Pumped storage, which could perform an essential role in supporting intermittent renewable generation. Scotland has the topography and water resources to develop further pumped hydro schemes, and indeed there are multiple consented schemes that could be large scale infrastructure projects underpinning low carbon generation. However, the current market structure does not sufficiently incentivise the services that storage can provide to the electricity grid to bring forward investment decisions. Reforming the electricity market is not within the Scottish Government’s powers, and therefore large scale pumped storage has not been included in the long list, despite its strategic importance.


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3. Case Studies

Major upgrades of existing rail network New high speed rail in Scotland Re-engineering cities to favour non-motorised transport Low carbon transport hubs Programme of district heating schemes targeted at high rise domestic properties Semi-rural district heating networks Urban district heating network Energy efficiency retrofit programme, addressing domestic, public sector and commercial buildings Grow local energy economies with community scale energy storage Energy from wastewater programme


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Major upgrades of existing rail networks

Overview:

This programme consists of an accelerated upgrading of existing rail lines between the seven Scottish cities through dualling and electrification. As an intermediate step, there is a need to remove current blockages from the network where insufficient ‘loading gauge’ clearance is limiting the cost-effective passage of taller and wider moderngeneration freight containers5. The preferred first leg for improvement is the Perth to Inverness rail link which is primarily single track. An upgrade would provide a significant increase in capacity for both passenger spaces and freight. Currently freight trains are required to divert to allow for passenger trains to pass, significantly increasing journey times for goods. Dualling and blockage clearance would allow the

A programme of major upgrades including dualling and electrification is needed across the network, targeting the links between the seven Scottish cities, to follow from the Edinburgh-Glasgow Improvement Programme which is in progress

use of 28 container freight trains to travel on the line (currently limited to 20 containers) as well as more frequent passenger and freight services. This increase in volume would make rail freight more economical and therefore more competitive with road freight. Upgrading the ‘Highland Main Line’ would enhance the growth and development that has taken place in Inverness and the region in recent years. The Edinburgh Glasgow Improvement Programme (EGIP) to be completed by December 2016, will deliver a 20% reduction in journey times and 30% more capacity, enabling "a cleaner, greener and quieter railway with lower carbon emissions".6 These proposals seek to extend these benefits across the major rail network. Justification: There is a need to transform Scotland’s rail capability in order to compete with road journeys both for passengers and freight. The planned programme to dual the A9 and A96 will substantially strengthen the competitive position of road haulage against rail freight in the medium to long term, while in the short term the trial of a higher speed limit of 50mph (up from 40 mph) for lorries on single-carriageway sections of the A9 has already allowed road hauliers to cut journey times from the Central Belt to Inverness by up to half an hour – with no compensating enhancements for rail freight. A more balanced level of investment should be directed towards dualling single-track sections of the rail network in order to encourage modal shift. Aside from energy and carbon savings, there are wider benefits from displacing journeys from road to rail. These include reduced journey times and associated economic benefits, and safer journeys, whilst less road freight would reduce the wear and tear imposed by 44-tonne lorries on road surfaces thereby reducing maintenance costs. There are wider economic benefits in strengthening the links between cities, including potential tourism benefits and extending travel to work areas.


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The shift of freight and passengers to rail is recognised by Network Rail as having significant advantages on carbon savings, air quality, and safety, as well as providing major employment opportunities. The new Borders Railway was estimated to have created between 200-400 construction jobs7 and provide wider economic benefits estimated at £33m over the appraisal period along with user benefits, safety benefits and carbon savings8. Context: In publishing the National Transport Strategy, the Scottish Government recognises that transport developments should be prioritised based on how they deliver strategic outcomes. The three strategic outcomes which form the guiding principles for transport policy making are: A Improving journey times and connections – to tackle congestion and the lack of integration and connections in transport which impact on high level objectives for economic growth, social inclusion, integration and safety. A Reducing emissions – to tackle the issues of climate change, air quality and health improvement which impact on the high level objective for protecting the environment and improving health. A Improving quality, accessibility and affordability – to give people a choice of public transport, where availability means better quality transport services and value for money, or an alternative to the car. This programme of major rail upgrades delivers against all of these outcomes. This would be an appropriate response to the growth in both passenger and rail freight traffic. Passenger rail use has grown by 50% over the period 2003-20139 (average 4% growth per year). Rail freight in Scotland has increased slightly from the mid-1990s “all time low” to around 7-14 million tonnes in recent years. However, road accounts for the vast majority of freight traffic in Scotland both in terms of “tonnes lifted” and “tonne – kilometres”.10 Rail freight is most economical for long-haul journeys of 300km or greater, although short haul journeys can achieve good returns in comparison to road depending on the volume transported and other factors. Over one-third (36%) of road freight movements in Scotland are over long haul distances of 300km or more11. These journeys are more likely to be suited to modal shift onto rail. There is an existing £5 billion package of funding and investment for Scottish railways until 2019. This is supporting improvements to infrastructure and services across the network, including substantial improvements to the Highland Main Line and the route between Aberdeen to Inverness. These may partially address some of the network constraints highlighted in this case study. Role of the public sector: The role of the public sector is four-fold: specifying, funding, procuring and promoting. By committing to an upgrade of the entire network, Scottish Government would communicate a clear message that rail is integral to Scotland’s future transport provision, increasing investor confidence in rail freight especially. Setting out the timetable for planned upgrades is the first step in this commitment. Planning and implementation would need to be in conjunction with Abellio and other operators who would provide the rolling stock and timetables to maximise uptake. Government investment in rail infrastructure is required at a level to match or exceed current investment in road upgrades. It is envisaged that the government would fund the rail infrastructure upgrades via Transport Scotland. Additional funding would be required for Network Rail, also directed via Transport Scotland, to run/maintain the network due to additional volume of use. By stipulating the terms of procurement, government can also maximise the wider benefits such as job creation, expenditure in the supply chain and other sustainability criteria. The public sector role is key in promoting the enhanced service benefits to users and service providers in order to induce the greatest possible modal shift from road transport. Carbon: There are significant energy and carbon savings in rail travel in comparison to road journeys, particularly for freight transport. The new Borders rail link is expected to reduce carbon emissions by transferring journeys from road to rail, resulting in a net saving of 33,865 tCO2 over the 60 year appraisal period8. Rail freight is estimated to require approximately a quarter to a third of the energy required for road haulage12. This saving would be further enhanced by electrification of the rail network, increasing over time through decarbonisation of the grid. Economic viability: Based on costs from recent major rail schemes in Scotland, the estimated cost of rail upgrade to dualling and electrification is between £20-30m per mile. A review of recent road projects throughout the UK reveals a huge variation in road dualling costs, ranging from £1.1 - £146m per mile, with a median cost of £18m and a mean of £30m per mile13. The dualling and electrification of all major lines between the cities is yet to be quantified. An initial cost estimate for the Perth to Inverness leg is £1bn14. Forging Scotland’s Way Ahead

15

The upgrading of existing lines must go hand-in-hand with terminal development to allow freight access onto the railways. Existing terminals will require upgrading and additional terminals will be required – starting with Dundee, Tayside and Fife in order to serve the whisky industry. It is likely that the terminal development would be part funded by government and service providers. Potential private sector contributions could include major industry players such as the whisky and forestry sectors. Timescale: It is envisaged that the first improvement leg from Perth to Inverness could be completed within five years, with subsequent legs to follow based on a comprehensive prioritisation exercise. There are no technological barriers to overcome; the main limiting factor in terms of timescales is the lengthy planning process and availability of funding. This could be accelerated by specifying the upgrade works as an infrastructure priority in the National Planning Framework and National Transport Strategy. International comparison and best practice: There are similarities between Scotland’s railway network and those of New Zealand, Sweden, Denmark and Ireland which are small but relatively affluent countries that also face issues of peripherality. The proportion of route length that is single track is 45% in Scotland, compared with 31% in Denmark, 42% in Northern Ireland, 70% in Ireland, and 74% in Sweden. The proportion of route length that is electrified is 39% in Scotland compared with 2% in Ireland, 0% in Northern Ireland, 12% in New Zealand, 23% in Denmark and 65% in Sweden. In terms of the total “workload”, it is estimated that 90% of passenger-km travelled in Sweden, as opposed to 60% in Scotland, are powered by electricity. The proportion of freight transport that makes use of electrification is not known15. Scotland’s performance in terms of existing levels of dual and electrified track falls in the middle range of these comparable countries. Role for smart technologies: Smart technologies could be incorporated through integrated ticketing using smart phones, eliminating the need for a physical ticket. Travel planning apps could be employed to monitor journeys in order to target campaigns toward modal shift, as well as respond to real-time delays through sensors. Big Data Analytics could also play a role in analysing the movement of goods in order to optimise freight movements. Systems level approach: It is essential that an integrated approach is taken to maximise the benefits of upgrading the rail network. Development should recognise and work with other public transport providers to provide connecting surface transport services with coordination of scheduling. An integrated approach would also make provision for active travel, with bike share schemes and infrastructure. Fair and flexible ticket pricing will also encourage utilisation and increase service efficiency at stations. Link to other case studies: There is a direct relationship with the high speed rail case study, and also reengineering cities and low carbon transport hubs, which need to be considered as part of an integrated low carbon transport system.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Over and above

Construction

Significant

Air quality

Enables public

existing efforts.

job creation as

potential benefits

benefits from

and businesses to

There are plans

well as improved

include safety

electrification

make low carbon

to upgrade

access to labour

and reduced

based on existing

transport choices

individual

markets through

maintenance

rail use patterns.

and encourages

sections of the

connectivity.

costs of displacing

Further air quality

modal shift.

network; however

passenger and

benefits from

an accelerated

freight journeys

inducing modal

programme is

from road to rail.

shift from road

needed with a

to rail.

commitment to address all of the lines linking the seven cities.


16

New high speed rail in Scotland

Overview:

The project would develop new high speed rail capacity in Scotland. High speed refers to travel at speeds of up to 150 mph, rather than the 225 mph speeds proposed for HS2 which come at a significant cost premium. The motivation behind new high speed lines is to reduce travel times, increase capacity and connectivity between the north east and the central belt and further south, both through new lines and by freeing capacity on existing lines. The goal is to encourage modal shift for both passengers and freight, away from road and air. There are several potential route options. High speed rail infrastructure between Glasgow and Edinburgh to the English border would be attractive if they linked up with high speed lines to London. Reducing the current journey time from around 5 hours to less than 3 hours would make rail travel more attractive than flying, with the potential for substantial modal shift and carbon savings. Ensuring Scotland’s inclusion in a UK high speed rail network is a priority for the Scottish Government16, but it is noted that this would be contingent on the UK Government committing to building to the border. An alternative high speed proposal is to develop a new high speed electrified rail link between Glasgow/Edinburgh and Aberdeen, which is put forward as an example in this case study. This would cut journey times to 80 minutes compared to current times of around 160 minutes. Improving the connectivity between Scotland’s largest northerly city and the Central Belt would create new employment flexibility and access to labour markets. It would also significantly increase passenger and freight capacity, through adding both speed and line capacity to the existing rail infrastructure. This need to improve connectivity particularly between Edinburgh and Aberdeen was recognised as a key project in the Strategic Transport Projects Review (STPR) but this proposed project would achieve carbon savings and connectivity benefits at a scale significantly greater than the measures suggested in the STPR. Significantly it would also free up capacity of the existing line which links Aberdeen with Montrose, Arbroath and Dundee to maximise the potential for freight modal shift. It is highlighted that there are alternative proposals to improving rail connectivity and journey times between Scotland’s cities, such as the ‘Inter-City Express’ concept proposed by Transform Scotland15, which includes a range of measures including a new route between Edinburgh and Perth. Justification: It is recognised that connectivity between Scotland’s cities is a key factor to fostering economic resilience. As the economy of Aberdeen begins to diversify it is important that the links to the Central Belt, and on to strategic centres in England, are enhanced to support that diversification Forging Scotland’s Way Ahead

17

and investment. This need for connectivity must be achieved in a sustainable manner and a modal shift from road to rail fits with that aspiration. Current journey times between Edinburgh or Glasgow and Aberdeen average 2h 30 minutes by both road and rail. The existing single track line means that services are interrupted by having to pull in

A new high speed electrified line between the Central Belt and Aberdeen which would cut journey times to 80 minutes and is one potential option for new high speed rail in Scotland

to wait for trains to pass in the opposite direction. In order to displace road journeys, a significant reduction in rail journey times is required. Improving passenger journey times to the Central Belt will improve the overall journey time to key onward destinations such as London, Manchester, Leeds and Birmingham. Better connectivity is key to the success of the growing ‘knowledge economy’ in Aberdeen and will provide long term economic resilience to an otherwise remote area. It is currently much faster and easier to fly to/from destinations in England. Shorter journey times will make rail travel a more appealing alternative to domestic air travel which is more carbon intensive. In terms of freight movement, road freight traffic is concentrated in the Central Belt and the A90 corridor linking to Dundee and Aberdeen is also busy. The existing rail line between the Central Belt and Aberdeen is lacking in loops to allow passing of freight trains; this also restricts the length of freight trains that can operate. Freight traffic is also limited by the semaphore signals in use as opposed to bi-directional signalling which would allow the route to remain open for freight during periods of engineering works. The proposed Rail Enhancement measures in the STPR would go some way to addressing these and other issues for the benefit of freight operations. However the performance of the freight improvements in terms of value for money is described as ‘marginal’ with the potential benefit of reduced carbon emissions deemed to make the overall scheme worthwhile. The introduction of a new rail link would displace passenger journeys from the existing line, freeing up significant capacity on the new and existing line for freight transport. This would maximise the opportunity for modal shift from road to rail freight with associated carbon emission reductions. The Rail Enhancement measures in the STPR also include upgrading the single track section through the Montrose Basin which is an internationally designated site of importance for breeding birds. The new rail link would potentially avoid negative environmental impacts on the basin from the proposed works. Context: The challenges posed by the current rail service between Aberdeen and the central belt were identified in the STPR in terms of the need to improve service frequencies and reduce overall journey times. According to the STPR, while Edinburgh, Glasgow, Perth and Dundee are all within a reasonable travel time of each other, the journey time to Aberdeen is between two and three hours depending on the time of day. Both the distance and average speeds attributed to the nature of the existing infrastructure act as constraints, limiting Aberdeen’s ability to interact with the major economic centres of Edinburgh and Glasgow and to derive benefits from business or freight movements. Further, there is recognition in the STPR that the current provision will not accommodate future demand and that “opportunities need to be sought for provision of enhanced rail services on [this] route.” Rail Enhancements between Aberdeen and the Central Belt is identified as one of the 29 targeted infrastructure improvements in the STPR; however this would reduce journey times by only 20 minutes and offer limited improvements in freight capacity. A new rail link would offer greater benefits in terms of carbon savings and improved connectivity to Scotland and the rest of the UK. There are potential synergies with other case study projects, such as the rail and rail freight upgrading project. Interconnections with other transport modes would need to be designed in to maximise the benefit. As with all electrified transport, the carbon savings potential increases as the grid decarbonises. Role of the public sector: The public sector could play a primary role in delivering the new Aberdeen rail link at a policy level by including it in the National Transport Strategy and within the Scottish National Planning Framework as a strategic priority. There are increasing arguments for broadening the criteria used to assess the benefit-cost ratio of strategic transport developments to include wider measures of environmental and social impacts. These are particularly important in reflecting the benefits of carbon savings and future connectivity for Aberdeen in particular as its economy diversifies. In addition to strong backing and leadership, government would need to provide the capital budget required for the new infrastructure, which would be administered through Transport Scotland.


18

Additional funding would be required for Network Rail, also directed via Transport Scotland, to run/ maintain the additions to the network. Private sector partners would need to include the operators such as Abellio who would have a role in providing appropriate rolling stock. By stipulating the terms of procurement, government can maximise the wider benefits such as job creation, expenditure in the supply chain and other sustainability criteria. The public sector also has a role in promoting the benefits to maximise uptake, working with network operators and organisations such as the Rail Freight Group. Carbon: The carbon savings potential is due to modal shift, removing both passenger and freight transport from the roads. High Speed Rail has been shown to deliver significant carbon savings18. According to emissions factors reported by DECC19, average air passenger domestic travel is nearly seven times more carbon intensive per passenger mile than rail travel. Economic viability: The costs of a new rail link would be substantial, estimated to be in the order of £410bn pounds for 100 miles of new track. The low end estimate is based on an international study on unit cost projections for new transport infrastructure20 which reported figures of £36-£50m per mile of high speed track in OECD countries. The high-end cost is based on an estimated £120-£130m per mile for HS221; however the proposed link would not be expected to achieve the 225mph speeds of HS2 therefore would not be as expensive. Timescale: It is envisaged that the line would take 10 years to construct. There are no technological constraints; however this is unlikely to be achievable in the short-term due to planning constraints and the need for route optioneering. The timescales could be reduced by specifying the upgrade works as an infrastructure priority in the National Planning Framework and National Transport Strategy. International comparison and best practice: There are similarities between Scotland’s railway network and those of New Zealand, Sweden, Denmark and Ireland which are small but relatively affluent countries that also face issues of peripherality. Average speeds between major cities in these countries vary between 50km/hr to 90 km/hr (mean of 75km/hr). In comparison, the journey from Glasgow to Aberdeen is approximately 200 km and takes 2 hours 40 minutes, an average speed of 74km/hr. Role for smart technologies: The key role identified for smart technology is through the use of travel planning apps as well as integrated ticketing for onward journeys. Systems level approach: It is essential that an integrated approach is taken to encourage modal shift, including provision of surface transport services and active travel. Fair and flexible ticket pricing will also encourage utilisation and increase service efficiency at stations. Link to other case studies: There is a direct relationship with the major rail upgrades case study, and also re-engineering cities and low carbon transport hubs, which need to be considered as part of an integrated low carbon transport system.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Additional to

Contributes

Potential benefits

Improved air

Good quality

existing efforts.

toward economic

include safety

quality through

and fairly priced

This is an

resilience of

and reduced

displacing

public transport

ambitious project

Aberdeen as

maintenance

passenger

provision enables

which is outside

the economy

costs from

journeys from

low carbon

the scope of

diversifies and

displacing

road/air and

choices.

current national

access to markets

passenger and

freight journeys

infrastructure

in Scotland and

freight journeys

from road to rail.

plans.

the UK becomes

off of roads.

increasingly important.


19

Re-engineering cities to favour non-motorised transport

Overview:

The goal is to create more ‘liveable’ cities with lower dependence on private car ownership, reduced air pollution and that are safer for pedestrians and cyclists. This would be achieved through re-engineering areas of city centres to be predominantly car-free, with well-designed and connected infrastructure for pedestrians and cyclists to connect these areas to surrounding populations and a systems level approach to public transport. The scope of this objective is to deliver change to all urban areas across Scotland, but Glasgow, as the largest city, is used as an example in this case study. Measures to favour non-motorised transport include: A Transformational change in the provision of cycling infrastructure. This would include segregated cycle paths along strategic routes into the city from suburban areas. An increase in the number of secure, undercover parking spaces for bikes in cities would be required. Cycle share schemes would be initiated, or expanded to cover larger areas of cities where they already exist. A Significant restrictions on the use of private motorised vehicles in city centres. There are various approaches to this. Large areas of the city centre could be completely closed to private vehicles, with only taxis, buses and distribution vehicles allowed in these zones with reductions in speed limits. Alternatively a congestion charging approach could be adopted, or traffic circulation plans introduced, to displace traffic from the city centre and promote cycling as the preferred means of transport for cross-city trips. A Ultra-low emission zones in city centre areas to discourage use of internal combustion engine vehicles. A system to ensure compliance and manage fines or charges, such as a network of cameras, would need to be installed an operated. A Improve cities for pedestrians in terms of safety, health and aesthetics by increasing the scale and number of walkways uninterrupted by traffic, or pedestrianising streets to ‘reclaim’ cities from cars. Greenways design characteristics could be adopted to create attractive, green pedestrian environments where people want to spend time. This is done by adding landscaping and vegetation to walkways and cycle paths. A A systems approach to urban travel would need to be adopted to ensure good access to the city centre is retained. This might include a variety of travel modes, including rail and surface transport, support for car clubs or park and ride schemes.


20

The ambition and type of measures adopted will depend upon the characteristics of the city in question

Glasgow is used as an example, yet this approach could be taken in all of Scotland’s cities.

and the political will at a local government level to make these types of bold changes. The level of ambition could be increased to a coordinated programme of re-allocating city space away from motorised transport across all main cities if it were deemed strategically important at a national level. Justification: The majority of Scotland’s population (81%) live in urban areas, with the seven cities of Aberdeen, Dundee, Edinburgh, Glasgow, Inverness, Perth and Stirling accounting for roughly 1.7m or 33% of the total population with the general trend is towards increased urbanisation. Cities become ‘locked in’ to particular patterns of transport use, predominately due to historical infrastructure investments and institutional inflexibility. Understanding how to re-engineer cities and urban infrastructure will be essential for transforming the built environment and achieving a low carbon Scotland. Reducing private vehicle use in cities, and particularly reducing or completely removing internal combustion engine vehicles, can make significant reductions in carbon emissions, but also improve local air quality, with associated health and economic benefits to city populations and services. Glasgow is a city where the existing transport infrastructure, property and business types lend themselves to being adapted. Glasgow air pollution is among the UK’s worst, and there are Air Quality Management Areas (AQMAs) in three parts of the city22. Context: The Scottish Government is supportive of approaches to make cities more liveable, including reducing harmful emissions and promoting walking and cycling for short journeys. Low Emission Zones (LEZs) are part of proposals outlined in the forthcoming Low Emission Strategy which will be launched later this year. The Scottish Government is creating a Low Emission Zone Framework, which will follow the principles of Scottish Transport Appraisal Guidance (STAG) in order to properly appraise the benefits or otherwise of an LEZ for an AQMA area. There is a significant budget already set aside for upgrades to Active Travel in Scotland from 2015-16; this is in the region of £36 million which is a 12% increase on the previous year23. Cycling is becoming an increasingly popular mode of transport in Glasgow, with an increase of 207% between 2007 and 2014)24. This project would tie in with the Glasgow and Clyde Valley City Deal – the first City Deal to be agreed in Scotland. UK Government, Scottish Government and local authorities have jointly contributed funding of £1.1bn. So far, approximately £415m has been committed to infrastructure projects, with approximately £280m related to improved pedestrian and cycle access25. There is potential to tap into the remaining budget available to expand on these measures and truly transform Glasgow’s city space as an exemplar for other Scottish cities. This project is aligned with the policy direction of the Scottish Government around both active travel infrastructure and Low Emission Zones, but proposes a step change in the ambition level. Role of the public sector: Public sector funding through Transport Scotland or using local authority or city deal funding could be used to fund cycling infrastructure, redesign of street layouts and the introduction of Low or Ultra Low Emission Zones. This would also apply if additional surface transport services were developed as part of the transformation. Development and Planning: planners have a crucial role to play in designing urban landscapes and setting conditions for future developments. The forthcoming Low Emission Strategy will require alterations to existing planning guidance and associated training. Carbon: The goal would be to discourage residents, commuters and visitors to the city from driving, so modal shifts away from private vehicle use and towards active travel and public transport would result in significant carbon savings. This could potentially also foster a more widespread shift away from private vehicle ownership amongst city region populations. Economic viability: While isolated cycling infrastructure schemes are relatively inexpensive in comparison to road schemes, a bold reengineering of a city would involve significant public consultation and capital expense, particularly when additional public transport services need to be funded. The introduction of ULEZs would require a compliance system to be installed, and there would be operating costs for maintenance and resourcing that are not covered by the collection of fines. Taking a more holistic view, it has long been recognised that with regard to cycling infrastructure, societal benefits far outweigh the costs – with benefits including physical fitness, reduction in absenteeism and reduced air pollution. This may result in direct savings to the NHS, the employers and cyclists. A UK Government appraisal showed a 5.5 to 1 benefit to cost ratio for cycling grants26. The cost of air pollution to society is also highlighted, with the World Health Organisation estimating that air pollution cost the UK £54B, or 3.7% of GDP per year.


21

Timescale: To develop this into an implementable project would require many steps including gaining political leadership, public consultation, and design of an integrated transport strategy. This would likely require a time frame of over 5 years. International comparison and best practice: For cycling infrastructure, Denmark is a European leader. Copenhagen is of a similar size and population to Glasgow and boasts segregated lanes and a super highway for bicycles. “Going Dutch” is a long stated ambition of cycling campaigners: the annual per capita spend on active travel in Scotland is £3.50-4.50, while evidence from Nordic countries suggests around £10 per head of the population is required to achieve the kind of modal shifts necessary to meet Scottish Government targets27. The Dutch city of Groningen, where 61% of all trips are now made by bicycle, made radical changes in the 1970s to remove cars from the city centre. Businesses were initially very resistant, but over time the changes proved to benefit local prosperity28. Vitoria in Spain is a good example of a city that completely overhauled infrastructure from very little in the way of cycling lanes; in ten years the city has transformed itself from a car-dominated, polluted city to one of the most pedestrian and cycle friendly in Europe. The city was successful in transforming congested roads into green, cycle-friendly boulevards where residents wanted to spend time outdoors29. Pedestrianising the historic city centre of Burgos in Spain led to a 30 percent increase in the number of pedestrians in the zone, and a 200 percent increase in the number of cyclists in the zone30. There are further opportunities to employ emerging technologies such as solar roadways which incorporate solar panels into pedestrian/cycle lanes. These have been successfully trialled in the Netherlands and development is continuing to incorporate additional features such as programmable LEDs, custom road signs and heating components to prevent build-up of ice and snow. Role for smart technologies: The Glasgow Future Cities programme has already installed cycling monitors on busy routes which also act as engagement tools with real-time displays. The use of mobile phone tracking apps, such as Strava or GlasgowCycle can also be used to map out popular cycle routes and strategically plan future infrastructure to maximise use. Other potential applications include pollution-free routing, and mobile pollution sensors worn by cyclists and pedestrians. Systems level approach: Adopting these changes would require a huge cultural shift that would need to be supported in a variety of ways. Strategic public transport planning, behaviour change programmes in schools and businesses, planning regulations to ensure businesses make adequate provision of cycling facilities could all be part of this approach. Link to other case studies: Related to the two rail case studies, given the need for multi-modal journeys. There are particular synergies with the low carbon transport hubs, which could support businesses operating low emission vehicles in the city.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Significantly

Despite concerns

Health benefits

Air quality

Will actively

additional

from local

for local

improvements

promote

to existing

businesses,

population, both

and water quality

behavioural

investment in

international

due to active

improvements

change to support

active travel

experience has

travel and cleaner

through reduced

low carbon

infrastructure and

shown that

air.

surface runoff,

healthy lifestyles.

Low Emissions

removal of car

provided

Strategy

traffic supports

problems aren’t

Consultation.

local businesses

transferred

and can

elsewhere.

regenerate areas.


22

Low carbon transport hubs

Overview:

This project involves the creation of transport hubs in and around major cities dedicated to recharging provision for lowcarbon travel. They would primarily be for the use of electric vehicles (EVs), but could also be used for hydrogen generation and refuelling. The concept would see the hubs serving a variety of users - available to the general public but also serving an array of businesses and service providers, such as EV taxi companies, EV car clubs, EV distribution companies taking the “last mile” of goods deliveries, and hydrogen refuelling for city bus services. The concept could also be viewed as providing future bases for driverless electric cars which could provide taxi services. This concept is applicable in all of Scotland’s cities and urban areas. Justification: To date, ChargePlace Scotland electric charging infrastructure has been funded by Transport Scotland and installed where local authorities have existing land available. The network now comprises over 800 public charging bays across all 32 local authorities. In addition to providing a wide distribution of chargers, a particular focus has been on providing rapid chargers on strategic routes connecting Scotland’s towns and cities. Thu far, there has not been the resources available to purchase land in strategic locations to provide hubs with multiple chargers (suggested maximum intervals of 35 miles and coverage in city centres31) to accommodate the growing number of EVs. While the primary means of charging electric vehicles is at home, it must be recognised that many householders, such as those living in tenement blocks, don’t have access to off street parking and therefore there is a role for the public sector in ensuring access to charging infrastructure. The “last mile” of distribution into dense urban areas is often highlighted as problematic, for several reasons including air quality, carbon emissions and congestion. Transport of goods to the periphery of urban centres is likely to involve diesel or LPG vehicles, due to the loads and distances involved. However, the use of low carbon vehicles could replace the final distribution stage into cities to supply retailers, other businesses and individuals. In addition to EV charging points, the hubs could also install electrolysers to generate hydrogen for refuelling fuel cell buses and cars. The deployment of rapid EV chargers requires distribution network upgrades, and given that these power sources would only be required intermittently, there is the potential to use spare capacity to generate hydrogen, particularly during periods when the grid has surplus energy.32 Existing infrastructure would be well utilised and enhanced by this project, which would rely on the current road network and freight distribution channels already in place. It would coexist well with Transport Scotland’s plans to extend the EV charging network in Scotland as outlined in the plug-in vehicles ‘roadmap’33 and could take guidance from Aberdeen from how best to incorporate hydrogen from its capacity as Europe’s ‘hydrogen hub’. The concept of a hub is designed to flexibly address a range of needs. By planning it around businesses and service providers a reliable demand can be forecasted to ensure viability. This project, or programme of projects, would require a coordinated approach to developing operations at these sites into viable businesses. Context: A 2010 report by WWF estimates that 1 in 10 cars on the road must be electric by 2020 if Scotland is to achieve its climate targets34, while the Scottish Government has also expressed its aim for towns and cities to be free of petrol/diesel emissions by 205035. While currently there are an estimated


23

37,000 EVs on the road in the UK36 the trend is still towards petrol and diesel fuels. Transformational change is needed to support a larger number of Electric and low carbon vehicles – a move away from individual charging points towards larger hubs on strategic corridors which cater for transport needs. There are a range of EV and Hydrogen infrastructure activities underway in Scotland, for example: A Trialling of ‘Light and Charge’ streetlights to keep EVs charged up using existing urban infrastructure rather than dedicated EV power outlets. A There is an all-electric car club in St. Andrews and an all-electric taxi company in Dundee. A City taxi fleets are transitioning to EVs, increasing their urban presence and allowing them to be experienced by more people. A Transport Scotland has developed a strategic intervention via European Regional Development Fund to develop low carbon transport hubs. A small scale hub is currently located at Broxden Roundabout in Perth. A The H2 Aberdeen initiative has produced a state-of-the-art hydrogen production and refuelling station, incorporating a fleet of 10 hydrogen buses, and attracting funding from the UK and Europe37. Role of the public sector: The public sector would need to take a leadership role in developing the hubs, to identify potential sites, include them in development plans and engage with potential partners from the private sector. This would include engaging with stakeholders such as freight companies, bus companies and car clubs. There are funding programmes in place such as those awarded through Office for Low Emission Vehicles (OLEV) and Transport Scotland, but this project would likely need to source additional or alternative funding. Entities would need to be set up to operate the hub. Initiatives are already in place which are supporting the uptake of EVs by both private and public sector fleets. fleets. For example, the Energy Saving Trust administers funding for businesses to install EV charge point at their premises and interest free loans to purchase EVs. The Switched On Fleets initiative provides funding to help public sector fleets with the purchase or lease of electric cars and

Hubs would include charging infrastructure for use by the public, and businesses and service providers such as taxis, distribution vehicles and public transport

vans. This £2.5 million fund has potential to add 280 additional EVs to public sector fleets across Scotland by 2016. The long term goal would be to grow the market until a significant level of demand exists before allowing commercial operators to take over once a commercial model had been established and demonstrated. This may involve a range of businesses around the hubs to attract a range of users, such as shops, café and restaurant facilities. There is a need to develop capacity and capability both within government departments and local authorities to develop these ideas into investable projects by coordinating the various strands. Carbon: EVs and Fuel Cell vehicles are emission free at the points of use, but the embodied emissions will depend on how the electricity or hydrogen is generated. The full benefits of EV uptake are dependent on grid decarbonisation in the future. Provisions such as Car Clubs and taxi schemes may also reduce car ownership over time and reduce reliance on private vehicle travel, reducing total mileage. Economic viability: The infrastructure cost for the hubs would need to include land purchase, building development costs, EV charging equipment, plus hydrogen generation, storage and fuelling equipment. There would also be a need to update road infrastructure in the surrounding areas. Grants provided for rapid EV chargers are currently £40K, which breaks down into roughly £25K for the unit and £15K for the electrical connection and other costs.38 Assuming some efficiencies of scale, 50 rapid chargers to support a diverse range of EV businesses may cost in the order of £1.5-2m. For the hydrogen infrastructure, purchase of electrolysers for producing and storing hydrogen cost around £2m per MW of electrolyser capacity. If this was to be linked to fuel cell buses, these cost around £1m each but the price would reduce to around £650K if large numbers were procured. A hydrogen refuelling station for the buses would cost around £700K.39 The total cost would depend upon the configuration of the hub and land purchase costs, but based on these indicative costs it could be in excess of £5-10m. The ongoing business case for the hub would be based upon the value of the electricity/ hydrogen to the individuals and businesses served. The value of this market would be expected to grow over time as businesses and public adapt.


24

Timescale: There are no technological barriers to implementing this, but this kind of major development would take in excess of 5 years to develop, schedule distribution network upgrades and coordinate a consortium of organisations around which to develop the hubs. International best practice: Adoption of EVs on a country-wide scale has thus far been most effective in Norway, the world’s leader of the EV market. Norway boasts an EV charging network with nationwide coverage and fast chargers available along highways at a minimum distance of 40 to 60km apart, where payments can be made via mobile phone. The e-mobility scheme ‘Green Car’ aims to get 200,000 Norwegians to buy a car with a plug by the year 2020, by providing hands-on support to corporate and municipal fleets, helping them to successfully introduce EVs. It has been observed that Norway has some significant advantages compared to Scotland that have allowed it to grow its EV market, such as a high-tax economy which enables significant tax-relief measures40. Other examples include Seattle, in the United States which has adopted smart charging to perform a demand response function. Across Europe, BMW have rolled out a ChargeNow network for ‘Light and Charge’ with 18,000 stations. ChargeNow is a partnership between BMW and partnering charge point operators, creating one expansive network that allows charging at over 4000 locations across the UK for a fixed fee a month, with 80% of the charging points free at point of to use. Role for smart technologies: Mobile phone apps can be used to make payment for EV charging, as well as providing traffic information and route maps. Mobile apps can also be used to schedule and book time slots at charging stations in advance. In a future scenario with a large uptake of EVs, smart charging can be used to balance supply and demand from the grid, providing a storage function. This will be more applicable in domestic settings than the use of rapid chargers once the demand for EV’s has grown. With smart charging, customers can charge their EVs in response to more granular price signals from utility companies and so can synchronise with lower-cost times. This would allow charging during off-peak hours when the utility network has excess power and prices are lower. EV batteries can act as a ‘sink’ therefore providing a storage function and enabling an increased volume of low carbon generation on the grid. Similarly, hydrogen generation can also be controlled in this way to provide a grid balancing function. Systems level approach: The configuration of hubs should be planned to meet various needs, including public transport, private transport and commercial needs such as taxis and distribution. Hubs would need to align with local transport plans and strategic routes to maximise access and provide multimodal transport options. A whole systems energy approach would look to optimise the use of electric distribution infrastructure and provide load balancing by using electric and hydrogen charging in tandem. The infrastructure would need to be supported with a range of soft measures to encourage uptake and usage, and maximise access to the facilities, for example commercial incentives and awareness programmes. Link to other case studies: Synergies with reengineering cities, which proposes traffic free and Ultra Low Emission Zones in cities. It could also support the two rail cases studies through provision of local low carbon transport options. The case study also relates to community energy storage, as the hub could be used to perform a grid balancing function.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

EV infrastructure

Local employment

Health

Improvements

A multi-stranded

is being

during

benefits from

in local air

approach (taxis,

developed

development and

improvements

quality. Some

car-clubs,

across Scotland,

a small number

in air quality,

concerns over the

distribution

including some

of ongoing jobs in

reduction in

environmental

vehicles,

isolated cases

operation.

congestion if

impacts of EV

high profile

of hydrogen

reliance on

batteries.

infrastructure) will

infrastructure,

private car

encourage a high

but this proposal

ownership is

degree of public

is a significant

reduced.

engagement.

increase in scale.


25

Programme of district heating schemes targeted at high rise domestic properties

Overview:

High rise domestic properties offer some of the most viable sites to develop district heating schemes. This proposal is for a nationally coordinated programme to target high rise blocks owned by housing associations across Scotland, which could then become anchor points for future district heating networks. There are approximately 58,000 high rise properties in Scotland41, which equates to roughly 600 blocks to be targeted42. This proposal is in tune with the Scottish Government commitment to make energy efficiency a National Infrastructure Priority. Provision of district heating to all of Scotland’s high rise domestic properties goes significantly beyond existing or planned levels of ambition. The heat source used has a significant influence on the carbon profile of district heating schemes. Natural gas boilers and CHP are common heat sources in these types of applications. These will deliver significant carbon savings compared to the inefficient heating systems common in high rise properties, such as electric storage heaters.. In the long run the goal should be transition to heat sources that are less carbon intensive than natural gas, such as biomass boilers, industrial waste heat, energy from waste, heat pumps or biogas. These technologies may initially not be economically viable, but as the heat networks and the market for heat off-take grows, a diverse range of heat sources would be expected to become cost effective. The initial step of installing the heat networks to serve the

High density multiple occupancy housing would be targeted in a programme across multiple local authorities.

properties may be a necessary step in achieving this transition. Justification: 50% of Scotland’s total energy usage is due to heat43 and therefore low carbon approaches to heating need to be a priority. Blocks of high rise properties would be targeted to create anchor loads for future or emerging heat networks. This programme has a clear role for the public sector, implemented through local authorities and housing associations. It targets buildings which are likely to be well suited to district heating for the following reasons: A There is sufficient density of population for an economic case. A Many high rise blocks are currently heated using inefficient electric storage heaters and don’t have gas services. The high running costs and carbon emissions associated with the incumbent heating sources mean that greater savings are possible. A District heating would be installed in parallel with energy efficiency measures and supported by behaviour change programmes.


26

A Fuel poverty can be addressed in areas of multiple deprivation, aligning with social justice goals. A There are well established proofs from around Scotland and the UK, both in terms of demonstrated cost and energy savings, and established charging mechanisms. A The scheme would target areas where heat networks and energy efficiency measures will have the greatest benefits, creating networks for other heat sources and off-takers to tap into. Context: The Scottish Government has set a target of 40,000 homes to benefit from affordable low carbon heat from district heating as part of an overall target of 1.5TWh of heat to be delivered by district heating by 202044. Developing district heating networks is also included in Scotland’s Energy Efficiency Programme which is the cornerstone of the Scottish Government’s National Infrastructure Priority on energy efficiency. Role of the public sector: The public sector would be required to develop the business case for the properties at a local authority or housing association level and also develop the required organisational structures. The following enabling measures are suggested: A Each authority could set up an ESCO or similar. A A parent ESCO could be set up to oversee and aggregate ESCOs at a local authority level, which are smaller and will deal with billing arrangements. A Budgetary constraints may limit the capability of local authorities to support ESCOs. The Scottish Government may need to explore mechanisms for addressing this, such as taking an equity stake in a nationwide ESCO. A Policy is required to ensure there is a common framework covering all housing associations and local authorities. For a nationwide programme, some degree of compulsion is required for local authorities to participate. A Common standards and procurement frameworks are needed. The Greater London Authority has already developed these45, which Scotland could sign up to rather than spend resources re-developing its own. In summary, there are four key roles for the public sector in driving this programme: developing capability, focussing efforts, providing capital and establishing planning requirements. This applies to Scottish Government and local authorities. Carbon: Assuming a saving of 2.3tCO2 per year per dwelling46 using gas CHP, the total saving across the whole programme would be in the order of 100ktCO2/year, or 0.15% of Scotland’s total emissions. Note that the saving per dwelling will depend on a range of site specific factors and that greater savings could be achievable with renewable heat sources. If the high rise blocks act as anchor heat loads to enable heat networks to develop around them in the future, more significant carbon savings can be achieved in the longer term. Increased scale and number of properties connected will increase potential carbon savings, and a network with a diverse range of low carbon heat sources could increase carbon savings further. Economic viability: Costs per property are likely to be in the range of £4-6k47, implying a total cost of over £250m if a programme of around 50,000 properties was completed. Developing programmes of this scale will make them attractive to investors. Payback period for the schemes are very site dependant and will depend upon site specific issues, the cost of borrowing and charging structure used. Payback periods of around 10 years are fairly typical for the schemes supplying blocks of high density housing, compared to payback periods of over 20 years when more extensive heat networks are developed. Timescale: There is no technological barrier to prevent the development of these programme schemes, as established technologies are used. The timeframe for developing business cases for individual sites, setting up ESCOs if required and building capacity in local authorities will mean significant progress across a nationwide programme would likely take 5-10 years. International comparison and best practice: Parts of Scandinavia and Eastern Europe have long established district heating networks, which are then supported by planning requirements that require new developments to connect to networks. Lessons can be learned from these strong planning requirements, although Scotland must first develop the infrastructure, namely well-established heat networks, before such policy and planning levers can be applied.


27

Role for smart technologies: Smart technologies and advanced controls provide a means to optimise heat management, and can enable it to be treated as a service provision. Real time monitoring and data analytics can be used to automate management of heat. Monitoring of temperature and other factors, such as humidity, can also be used to assess the effectiveness of insulation in real life situations, which is being trialled with Glasgow Housing Associations through the Future Cities programme48. Where electrified heat sources are used in the network, such as heat pumps, smart controls may enable demand response functions to be performed, fluctuating heat output to increase or reduce electricity demand as the grid requires. Systems level approach: Ensuring that properties are energy efficient is a pre-requisite for realising the benefits of district heating. Strategic planning, using tools such as the Scottish Government Heat Map49 can enable identification of appropriate heat sources and allow future proofing compatible with the development goals of the area to be designed into the network layout and sizing. Heat metering issues need to be carefully considered and resolved to ensure that low carbon behaviours are supported while also ensuring a fair pricing structure that alleviates fuel poverty. Local or community behaviour change and education programmes for residents to operate heating controls efficiently will be required. This may provide an opportunity to influence other behaviours beside domestic heating, such as sustainable transport and recycling. Link to other case studies: This case study is linked to the other district heating case studies, as the strategic goal is to connect high-rise blocks into large scale heat networks. Retrofitting energy efficiency measures may be required, such as externally cladding the high rise blocks. There is overlap with the community energy storage case study, given the potential to use a district heating network as thermal storage.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Additional to

Potential for local

Tackles fuel

No significant

Provides

existing efforts.

employment of

poverty in areas

local

opportunity to

While individual

skilled labour

of multiple

environmental

engage residents

schemes have

across Scotland.

deprivation.

benefits beyond

with energy

carbon reduction.

efficiency and

been developed, no nationally

low carbon

coordinated

heating and

programme

pave the way

exists.

for further engagement.


28

Semi-rural district heating networks

Overview:

Public funding made available to support the development of semi-rural district heating networks. The economic case for developing heat networks is site specific and therefore this programme would need to allow funding to assess the feasibility of developing networks in promising locations. A diverse range of heat sources could be used to supply these heat networks, and the most appropriate sources will depend on the specifics of the scheme and local characteristics. For this case study, a heat network in Fife is used as an example, which would be supplied by geothermal heat in addition to other sources. Geothermal is widely used internationally but not well developed in the UK, despite its potential to be a significant source of low carbon heat. This example project would see the development of a semi-rural district heating network in Fife that extends from the Frances colliery (a pumped mine) in Dysart to Dunfermline’s already existing landfill gas and biomass district heating network. It would connect up to Lumphinnans, where one of the only two mine-water geothermal schemes in Scotland exists, and Cowdenbeath where a new biomass district heating network is being developed. The network could deliver heat to all the communities along this corridor as it is developed in phases, helping to address fuel poverty. The network could draw renewable heat from many mine workings along the way, as well as deep geothermal aquifer resources (Hot Sedimentary Aquifers) which are expected to be highly productive. Eventually it could be comparable to networks present in European countries including the Netherlands, Denmark and Spain which are large enough to provide their own buffer, reducing need for storage and increasing reliability and cost efficiency of heat provided50. Justification: 50% of Scotland’s total energy usage is due to heat51 and therefore low carbon approaches to heating need to be a priority for all parts of Scotland, not only in urban areas. While the greater density of heat demand often makes urban areas more suitable for district heating networks than more rural locations, other mitigating factors may be present that can make semi-rural networks attractive. This may include the proximity to low carbon heat sources, such as energy from waste, agricultural and forestry related feedstocks or geothermal resources. This example project has been selected because it represents an opportunity to develop a large scale heat network that links up existing schemes with new heat sources. It is presented in addition to other well-known schemes, such as the Clyde Gateway (the largest current development site in Scotland) that also have the potential to develop geothermal sources and expand existing district heating infrastructure. Abandoned mine workings are receiving a lot of interest as a potential source of geothermal heat, and there are two already in existence serving small communities of less than 20 properties (Shettleston in


29

east Glasgow and Lumphinnans in Fife) which have been operating since around 200052. There is a good correlation between the locations of mine workings and population centres, due to the proximity of exmining communities. Mine workings extend through much of Fife, and are widely present in the central belt from East Lothian to Ayrshire. These sites are attractive because the mine workings have enhanced the permeability of the strata such that groundwater can be extracted at a greater rate than would otherwise be possible, reducing the drilling required. This makes them suitable for large, open-loop ground source heat pump systems at depths within a few hundred metres of surface53. The Central Belt (including this part of Fife), along with the southern edge of the Moray Firth Basin, also has suitable geology for potentially developing Hot Sedimentary Aquifers54; this involves drilling deeper, potentially down to 3,000m below the surface. The technology works best when serving new developments close to the mines, as it is more energy and cost-efficient to design new systems rather than retrofitting (D Townsend 2015 pers.comm., 28 July). Low-grade heat delivered by Ground Source Heat Pumps is most effectively used in well insulated (typically new-build) properties. Context: Developing district heating networks is considered part of Scotland’s Energy Efficiency Programme which is the cornerstone of the Scottish Government’s National Infrastructure Priority on energy efficiency. To explore the capacity of Scotland’s geothermal resource to meet the energy needs of local communities, the Scottish Government ran a Geothermal Challenge Fund as part of the Low Carbon Infrastructure Transition Programme. Grant funding totalling £234,025 has been awarded to five geothermal projects, and the consortia behind a further four proposed projects may be eligible for early development support to progress proposals55. A Scottish Government study into available geothermal resource estimates that 2.5MW/km2 could be obtained on average using open-loop ground source heat systems in the mined areas of Scotland, giving a maximum accessible heat resource of 12GW, equivalent to approximately one third of Scotland’s total heat demand56. Noting that in practice this resource is unlikely to be fully developed, it highlights the potential for geothermal to make a significant contribution to a diverse heating mix, supported by the roll-out of district heat networks. Role of the public sector: The level of investment required to develop these large scale networks is such that it will require public sector support. Developing geothermal resources carries its own risks and costs in addition to developing the heat networks themselves, which are very capital intensive. The following are means by which the public sector can support the development of this and similar projects: A Continue and increase support to challenge funds to progress promising proposals. A Grow investor confidence by making policy and legislative direction clear (Scottish Government), for both district heating in general and geothermal. A Incorporation into local authority and national level development plans and planning guidance. A Some form of government-backed underwriting scheme to help de-risk drilling to develop geothermal resources, where there is always a degree of geological uncertainty. Unlike in the oil and gas sector, where the companies can manage the risk of unsuccessful drilling, this low value and un-shippable nature of hot water means that a geothermal project is more challenging to invest in until the specific reservoir is well-characterised. In addition to the support required for developing geothermal, all of the requirements for developing district heating networks are needed at a local authority level (engaging ESCOs, developing internal capability, providing capital and planning requirements). Carbon: Carbon emissions would be reduced by displacing higher carbon sources of heating such as gas. Estimates from a completed geothermal scheme in the Netherlands suggest savings of around 55% are possible57. Total carbon savings can only be finally quantified on a site-specific basis. Economic viability: In semi-rural communities the heat demand density is likely to be lower than urban communities, which can make the economics of district heating harder to justify. However, mitigating factors include lower capital costs for laying pipes outside of cities, reduced land costs, potentially more options for siting energy centres, and greater availability of heat sources or feedstocks. New modern housing developments in semi-rural areas may provide more energy efficient properties for heat networks to supply, and where a district heating solution avoids the cost of connecting to the gas grid this will improve economic viability compared to alternatives. These site specific factors would need to be considered as part of scheme feasibility.


30

Developing geothermal sources is capital intensive, but do not require much investment in operation, with electricity the main ongoing cost. The payback period for this kind of project is long and therefore will suit long term investors. Indicative costs for drilling geothermal wells in mine workings of 500m depth are around £1m for two wells and £0.5m for a heat centre and pumps, plus the cost of district heating networks. Timescale: Typical timescales from feasibility to drilling geothermal wells are around 6 months for mine water and a year for deep geothermal aquifers. Developing the resources fully with heat networks serving multiple communities across Scotland would likely take in the order of 10-20+ years given lead times required for feasibility and business case development. International comparison and best practice: Public sector capital has played an important role in developing district heating schemes internationally. An example of a geothermal district heating project is Heerlen in the Netherlands. This European Commission funded exemplar project which uses mine water to supply sustainable heating and cooling to a new housing development of 200 houses, shops, offices and a supermarket58, and demonstrates the benefit of a co-ordinated approach to planning. The Swiss Government has instituted an insurance scheme – the geothermal guarantee scheme – to assist with the cost of wells if unsuccessful; developers may be reimbursed 50% of the costs of unsuccessful wells, whilst successful developments contribute to the fund.59 Similar schemes are also present in Germany and France, and also in East Africa, a scheme contributed to by the Department for International Development (DFID)60. Role for smart technologies: Smart technologies can be used for optimisation of heat management with the potential to provide demand response and energy storage functions via thermal storage. Systems level approach: A coordinated, approach is required to assess what is the appropriate solution for each community, including understanding local characteristics such as availability of renewable electricity resources or feedstocks. Long term, strategic planning with respect to new developments and industry is required to ensure networks are futureproofed. Heat metering issues need to be carefully considered and resolved to ensure that low carbon behaviours are supported while also ensuring a fair pricing structure that alleviates fuel poverty. Link to other case studies: This case study is linked to the other district heating case studies and the retrofitting case study, given the need for energy efficient buildings if the full benefits of district heating are to be realised. There is also overlap with the community energy storage case study, given the potential to use a district heating network as thermal storage. Energy from wastewater is also relevant, as a potential heat source for heat networks.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Significantly

Potential for local

Tackling fuel

No significant

Enables residents

additional to

employment of

poverty, improved

local

and businesses

existing efforts,

skilled labour

energy security,

environmental

to engage with

where only pilot

in particular

potential to

benefits

energy efficiency

scale projects

locations,

become exemplar

beyond carbon

and low carbon

exist.

supporting new

project for

reduction. Some

heating.

developments.

technology

environmental

exchange and

risks to manage

replication.

with mine waters, although mine water management is now a very mature field.


31

Urban district heating network

Overview:

The development of Scandinavian style district heating networks in Scotland’s city centres would join up isolated “heat islands” to develop future-proofed networks. This kind of capital intensive infrastructure requires public sector backing in order to establish market certainty, reduce capital risk and therefore support private sector investment. Once the network infrastructure is installed a range of diverse heat sources and heat-offtake schemes can then be developed by the private sector. With a network in place, policy and planning levers could be made available to compel new and existing developments to connect into the networks. In this case study Edinburgh is considered as an example location. This type of project would be suitable for most of Scotland’s cities, particularly those that already have the beginnings of heat networks. None of the cities currently have an overall city wide network. Aberdeen could be considered the closest to having a city network, but this has still taken many years of incremental growth to develop. Glasgow and Edinburgh have a significant number of isolated schemes but no joined up network. Heat networks are technology neutral in that a range of diverse heat generation technologies can be used to feed into the networks including: Combined Heat and Power (CHP) using natural gas or biomass, industrial waste heat, energy from waste, and heat pumps. This project is not tied to any particular technology, but water source heat pumps are given as an example of a low-carbon heat input, which can use river or sea water. All of Scotland’s cities are situated on rivers or the coast and therefore this technology is suitable for all the cities. In Edinburgh, a water source heat pump has been under consideration, potentially extracting heat from the Water of Leith61. Most heat pump installations to date have been for individual houses, but there is the potential for large scale applications. Heat pumps can also be used to recover heat from sewage, with a project currently in development in Galashiels62. Justification: Over 50% of the energy consumed in Scotland is used to heat and cool buildings and processes in our homes, offices, hospitals, business and industry63. While the expense of laying heat networks in urban areas is greater than in rural, they are normally more suitable for district heating schemes. This is because of the combination of high population density in cities and the presence of organisations such as universities, hospitals and other public sector bodies that have heat generation on site or smaller isolated district heating schemes. Developing heat networks often results in a “chicken and egg” problem. The distribution network infrastructure is capital intensive but has a long lifetime – in excess of 40 years. It has a different risk profile for investors compared to the other components of a district heating scheme: the heat generation and the heat off-take (retail). Without having the heat network in place first, individual Forging Scotland’s Way Ahead

32

schemes may not be economically viable to investors. Therefore treating developing the networks as a publically backed infrastructure priority is necessary. Context: Developing district heating networks is considered part of Scotland’s Energy Efficiency Programme which is the cornerstone of the Scottish Government’s National Infrastructure Priority on energy efficiency. The Scottish Government’s Heat Generation Policy Statement (HGPS) sets out how low carbon heat can reach more householders, business and communities64. It also sets out a clear framework for investment in the future of heat in Scotland. To deliver this there is a need to reduce the amount of energy used for heat, diversify sources of heat, provide increased security of heat supply, greater local control and reduce the pressure on household energy bills. The HGPS sets a target for district heating in Scotland of 40,000 homes by 2020 with the aim of ensuring that district heating schemes make a significant contribution to meeting Scotland’s climate change targets. To support this process, heat mapping has been undertaken in Scotland to identify opportunities for linking local heat supply with local heat demand and how these can be connected in an efficient way; this will help reduce the cost of heat supply and the carbon intensity of heat generation. Heat mapping can also be used in conjunction with other data to identify focal points for targeted activity or to illustrate the additional socio-economic benefits from a changing heat network. Edinburgh does not have a city scale district heat network. However, there are CHP schemes and local heat networks. These include supply to universities and hospitals, which are among the largest energy consumers in the in the city: A Western General Hospital - generating 1MW of electricity and meeting all the hospital’s heat and hot water requirements. A University of Edinburgh’s three plants at Pollock Halls, Kings Buildings and George Square which generate 4.8MW of electricity and 4.5MW of heat. A There is a range of sites with CHP capacity in the city generating both heat and power. One such small scale example is the Scottish Parliament’s 150kW of heat. These schemes can also provide renewable sources of power by using waste heat from other areas in the city, thereby further reducing costs. At Millerhill consideration is being given to a waste to energy facility that could export heat to a future district heating network. A scoping exercise has been completed in Edinburgh which has identified a range of possible heat sources and large commercial users within Edinburgh. Existing heat sources include: A Queen Margaret University (biomass boiler) A Seafield wastewater treatment works (anaerobic digestion) A University of Edinburgh (CHP at Holyrood, Pollock Halls and Kings Buildings) A Greendykes (solar thermal), and A North British Distillery (anaerobic digestion). Potential future heat sources identified include: A Millerhill (energy from waste) A Edinburgh Airport (CHP) A Seafield (effluent heat recovery). Potential heat demands identified include a range of NHS hospitals, Housing Association sites, university campuses and the Commonwealth Swimming Pool.65 Feasibility studies have been undertaken for the development of district heating networks in the Fountainbridge and Bioquarter areas of the city.66 Role of the public sector: The level of investment required to develop these large scale networks needs to be supported by the public sector in a number of ways: A The project needs to be highlighted as an infrastructure priority with capital budget funding made available to develop city-wide networks; this recognises that the payback periods are long and require the kind of “patient capital” that can only be provided by the public sector. Not all heat sources and off-takers will be identified in advance to develop a full business case, but to achieve the Government heating targets this kind of public backing may be necessary. A Grow investor confidence by making the policy and legislative direction of the Scottish Government clear.


33

A Incorporation into development plans and planning guidance at a local authority and national level. A As with the other district heating projects, at a local authority level the priority needs are to develop ESCOs, grow internal capability, provide focus, capital funding and support planning requirements. A Develop the regulatory framework around district heating, for example to ensure customer protection and provide fair metering, to give statutory rights to install network infrastructure, or potentially to create a requirement for compulsory connections into networks. Carbon: While carbon benefits have not been quantified and will depend upon the diverse range of heat inputs into the network, the potential to reduce carbon in urban environments is significant. To maximise the carbon benefits, district heating should be accompanied by energy efficiency measures and behaviour change programmes. Economic viability: The payback periods for developing heat networks may be in excess of 20 years67 and therefore require an institutional investor prepared to accept this long term investment and the risk profile. These kinds of schemes may be investible by the Green Investment Bank provided they can be aggregated to sufficient scale. There is also a clear role for government to provide capital which would reduce the risk associated with projects and bring in investment from the private sector. Timescale: Elements of a heat network could be completed within a 5 year timeframe, with 5-15 years more realistic to develop a city centre network. International comparison and best practice: There are many examples of city wide heat networks, particularly in Scandinavia. City scale networks, such as in Copenhagen, have been able to use the networks as a means of storing energy, by varying heat and power production from combined heat and power and storing the heat in large thermal stores. The city of Drammen in Norway is an example of using a water source heat pump for large scale application. The system was installed by the Glasgowbased cooling solutions specialist Star Refrigeration in 2011. Drammen utilises this as the heat source of first choice on its 22km thermal network. The heat pump provides over 60,000 MWh per year in Drammen and extracts heat from seawater and delivers heat at up to 900C.68 Role for smart technologies: Smart technology could be employed to optimise heat management through demand response and heat storage functions for electrified heat sources such as River Source Heat Pumps. Heat networks can store a volume of heated water in the network and therefore there is some flexibility in the temperature of the water that is delivered, this means that the electrical power demands can be altered using smart controls. The city of Drammen is trialling this approach.69 Systems level approach: Heat networks provide systems level energy management using thermal storage to balance capacity issues. Long term, strategic planning with respect to new developments and industry is required to ensure networks are futureproofed. Heat metering issues need to be carefully considered and resolved to ensure that low carbon behaviours are supported while also ensuring a fair pricing structure that alleviates fuel poverty. Link to other case studies: This case study is linked to the other district heating case studies and the retrofitting case study, given the need for energy efficient buildings if the full benefits of district heating are to be realised. There is also overlap with the community energy storage case and energy from wastewater is also relevant as a potential heat source.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

City wide

Potential for

Tackles fuel

No significant

Provides

networks are

local employment

poverty; potential

local

opportunity to

significantly

within the cities

to become

environmental

engage residents

additional to

during the

exemplar projects

benefits beyond

and businesses

existing individual

construction

for technology

carbon reduction.

with energy

district heating

phase.

exchange.

schemes.

efficiency and low carbon heating and pave the way for further engagement.


34

Energy efficiency retrofit programme, addressing domestic, public sector and commercial buildings

Overview: This project consists of a major multi-year programme of energy efficiency investment in domestic, public sector and commercial buildings across Scotland. This is in line with the Scottish Government commitment to making energy efficiency a National Infrastructure Priority. It will have multiple benefits including carbon savings, addressing fuel poverty, and reducing the exposure of households and the public sector to increasing energy costs over time. Rather than addressing each sector in turn, the programme would be delivered focusing on geographic regions, which may be local authorities or larger regions. This would not only result in financial savings by achieving economies of scale within local supply contracts, but also maximise the potential to link into local energy generation, storage, and distribution projects by taking a ‘whole area’ view. The programme would be flexible enough to achieve savings across a wide variety of building age/type/location. These could include insulation and other building fabric improvements, boiler replacement, lighting upgrades, through to bespoke measures such as distributed generation (CHP or renewable technologies).The mix of measures for each building would be determined by the requirement to achieve a high energy performance standard – for example the Energy Performance Certificate (EPC) band C or above. Justification: Energy efficiency measures offer considerable scope for reducing carbon emissions from the built environment. Heat demand is the biggest element of Scotland’s energy use (approximately 50%), and the largest source of our emissions. Scottish Government have committed to largely decarbonising our energy system by 2050. A key aspect of this is addressing the heat system through three specific objectives; the first and principal step being to reduce the overall demand.70 The scale of investment required to upgrade generating capacity and distribution networks is such that the cost of energy provision is expected to drive up energy bills over the coming years. This will adversely affect businesses, households and the public sector alike. A recent report by Frontier Economics concludes that investment in energy efficiency not only constitutes infrastructure investment but represents good value for money. In addition to the economic returns typically associated with major infrastructure investments, energy efficiency schemes also result in wider savings to the NHS through improved health outcomes. Energy efficiency investments also free up energy capacity for other uses, just as investment in new generation or network capacity would. In this way, they increase inputs to the production of goods and services across the economy.71 Context: There are progressive regulations in place to ensure a low carbon standard in respect to new build in Scotland. However, 70% of buildings existing today will still be in use by 2050 and if Scotland is to meet its carbon reduction target, the average existing property will be required to be at the top of band A: at this level, it uses zero net energy in that any energy required is provided by on-site renewables.72


35

The cornerstone of the Scottish Government’s National Infrastructure Priority on energy efficiency will be Scotland’s Energy Efficiency Programme which will offer support to all buildings to improve the energy efficiency rating over the next 15-20 years. It is expected that the programme will require substantive investment from building owners, the private sector and the Scottish Government. Role of the public sector: For a retrofit programme of buildings at the scale required, it is anticipated that the Government would make a substantial funding contribution over and above current commitments. It is possible that the Scottish Government could negotiate further devolution of tax powers including the Climate Change Levy (CCL). The CCL raised in Scotland in 2012-13 totalled £62 million which could be channelled towards the initial investment. The programme could be set up under a ‘spend to save’ model, with public sector investment reducing the risk and enabling lower interest capital from the finance sector... Energy efficiency investments are suitable for most investors with a fixed income portfolio, such as pension funds. The Green Investment Bank could perform the role of aggregator to bundle these investments. Those who can afford repayments would have access to low or zero interest loans and/or borrow against the equity of the property with full repayment made through a charge on the property when it is sold. Those on low incomes would be eligible for help through a fuel poverty programme.In addition to financing, the Government could introduce complementary regulation. The government intends to consult on draft regulations to require a minimum standard of energy performance at the point of sale and rental for private housing, and already has in place minimum standards for social housing and existing nondomestic buildings. Minimum standards at the point of major refurbishment for domestic and nondomestic buildings and tax incentives such as through the Land and Buildings Transaction Tax could also be explored.. With regard to the public sector, a degree of compulsion may be required, and ideas analogous to ESOS (Energy Savings Opportunities Scheme) to compel the public sector to act upon identified opportunities may be a route to achieving this. Crucially, the success of this programme relies heavily on multiple individuals and organisations working together. A programme of this scale would require significant skills and effort to coordinate. Use of regional Project Management Offices with a central coordination team could speed up the roll-out as well as reduce the overall costs. Carbon: For housing alone, average emissions reductions of over 1tCO2 per annum could be achieved per household.73 By implementing a large-scale integrated programme, progress in the domestic sector will also help to achieve the ambitions set out for public sector and non-domestic building set out in RPP2. Economic viability: The overall cost of addressing all residential properties to reach EPC band C is estimated at £10.7 billion.74 This would comprise public investment (grants and loans) and private investment leveraged from public funding. There is potential to include a contribution from future obligations on energy providers which could off-set public expenditure. Retrofit measures aimed at public sector buildings cost an estimated £70/m2. If only the buildings with the highest energy bills across Scotland were addressed, the estimated cost is around £100 million. However this would deliver financial savings through reduced energy bills, achieving an average pay back period of 11-13 years across all of the targeted public sector buildings. It is expected that private non-domestic buildings could achieve similar returns. Investments in individual measures or buildings can provide payback periods much less than this (around 5 years); however, by bundling the measures together, this would allow the overall payback across the infrastructure programme to be balanced to include one-off measures which may not be viable outside the bundle. This approach essentially uses measures with short payback periods, which may deliver modest energy reduction benefits (i.e. ‘quick wins’), to finance measures with longer payback periods but higher overall rewards. There are wider economic benefits associated with energy efficiency investment. A programme of this scale would create thousands of jobs which would be spread across Scotland, unlike other single large scale investment projects. Addressing fuel poverty would result in cost savings to the NHS in the region of £48 - £80 million per annum in Scotland. Ultimately, every pound invested by government on energy efficiency is estimated to generate a three-fold return in GDP and contributes to Scotland’s future prosperity.75 Timescale: The overall timeframe for the programme is 20 years, which aligns with the timeframe set in the Scotland’s Energy Efficiency Programme. It is envisaged that this would be broken down into phases by geographic region. Each phase would take approximately 10 years (and therefore overlap considerably with other phases). Minimum payback periods are around 5 years at the individual building level; therefore a positive revenue stream could be realised within that time and go on to fund the next phases. Forging Scotland’s Way Ahead

36

International comparison and best practice: Germany has one of the most ambitious energy efficiency programmes in Europe, with a target to reduce energy use across all sectors by 30% by 2020 and refurbish all existing housing by 2030. This will be achieved through standards, a generous programme of incentives and loans, and advice and promotion.76 In the UK, the London Re:FIT programme has seen the retrofit of over 460 public sector buildings so far at a cost of £68.6m, resulting in 33,000 tCO2e savings per year. This breaks down to £150k per building and 72 tCO2e/yr per building, based on average energy efficiency savings of 35%. Role for smart technologies: There is a significant potential role for incorporating smart technology to analyse data on current energy requirements and the performance of existing energy efficiency retrofit measures. For example, Glasgow City Council is developing an Energy Efficiency in Housing and Buildings Demonstrator project as part of the Future Cities agenda.77 The project will create a model of the energy consumption of residential and commercial buildings across Glasgow. Users will be able to enter information on buildings where they live and work which is used to calculate the anticipated energy consumption. These simulated results can be compared with actual energy consumption, identifying areas which would benefit from energy efficiency. The model will suggest retrofit options for the property, provide illustrative payback periods, and link in to registered/approved service providers who can install the suggested retrofit solutions. The results can also be aggregated into a 3D energy model of the city. Systems level approach: By defining the phases of the programme according to geographic regions, this maximises opportunities provided by a strategic, ‘whole area’ view. Behaviour change programmes need to be part of this, ensuring that technically achievable energy savings are realised in practice. These programmes will act to minimise the ‘rebound effect, where savings from more energy efficient systems are instead spent on consuming more energy elsewhere. Link to other case studies: This project links to the three district heating case studies as measures could impact on the supply and demand of heat (for example including small scale CHP as a retrofit measure). There is also overlap with the community energy storage case study, which relies on energy efficient homes to maximise the benefits.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Additional to

Local employment

Energy efficiency

No significant

A national

existing efforts.

of skilled labour

measures will

local

programme of

Energy efficiency

across Scotland.

result in a

environmental

this scale would

measures are

Reduced spend on

reduction in

benefits beyond

help make energy

underway, but

energy will result

fuel poverty,

carbon reduction.

efficiency a social

this programme

in greater funding

improved health

norm in the

is a large scale

remaining in local

outcomes and

home, at work

expansion and

economies.

savings to the

and in public

acceleration

NHS, long-term

spaces which will

of current

financial savings

encourage and

commitments

and increased

support

energy security.

lasting behaviour change.


37

Grow local energy economies with community scale energy storage

Overview:

Local energy economies refers to “integrating low carbon energy sources in local energy systems and supply chains in a way that maximises system efficiency and adds value for local stakeholders”, as set out in the Scottish Government’s recently 78 published “Community Energy Policy Statement . This generally means using low carbon technologies to generate energy locally, which can then be used locally. Deploying energy storage in local energy economies can significantly enhance their function and reduce the need for energy imports, saving carbon while supporting community economies. Rural, remote or island communities are often the focus for distributed energy storage. These communities usually pay more for their energy and exhibit high levels of fuel poverty, despite often also having good renewable energy resources which may be grid-constrained; a set of conditions that place increased value on the ability to store energy. This first phase of the programme would be a national strategy put together by government, local authorities and community stakeholders to identify those communities most in need that would receive the greatest benefit from energy storage. Infrastructure funding would then be made available to fund, facilitate or underwrite selected projects. This would create energy independence for remote and rural communities with a focus on grid constrained areas. The second stage of the programme would take these proven concepts and translate them to urban communities across Scotland to develop this into a national scale infrastructure programme. Justification: For Scotland to achieve its 80% carbon reduction target with renewable generation, energy storage will be essential. Most low-carbon sources can only generate intermittently, and don’t match our, also fluctuating, energy demand patterns. Large scale electricity storage exists in the UK in the form of pumped hydropower, with two large scale schemes in Scotland (Cruachan and Foyers)79. Despite suitable sites for new pumped hydro being available in Scotland, the current electricity markets do not sufficiently reward the services that electricity storage provides to develop investable business cases. Therefore this proposal focuses on community, distributed storage, which although smaller scale does have advantages compared to large centralised schemes. Embedding storage close to where energy is generated and used minimises transmission and distribution losses, and the need for grid upgrades. It also empowers communities to take a stake in their own energy provision while addressing socio-economic issues such as fuel poverty, resilience and energy security for those most at risk. Context: A range of community scale solutions to the energy storage issue exist, including demand side management, property and community level batteries of varying chemistries, hydrogen generation, electric vehicle batteries, redox flow batteries, liquefying air, and a variety of thermal storage solutions, among many others. These technologies are at various stages of maturity and have different


38

characteristics; the most suitable solution will depend upon the particular needs of a community. Rather than looking just at the electricity sector in isolation, a whole systems approach to the energy needs of communities also needs to consider heat and transport. Considering energy storage outside the confines of the electricity market also enables a clearer role for the Scottish Government to shape policy. The Scottish Government’s schemes for community energy are currently the Community and Renewable Energy Scheme (CARES), linked to capital support from the Renewable Energy Investment Fund (REIF). CARES is designed to accelerate progress towards the Scottish Government’s target of generating 500MW from community or locally-owned renewables by 2020.80 There are examples of community energy storage systems across Scotland; batteries can store excess renewable generation, such as the UK’s first large scale grid-connected battery (2 MW lithium ion) on Orkney and a Vanadium Flow Battery on Gigha. A variety of storage projects have received funding through the Local Energy Challenge Fund, including: A ACCESS – uses electricity from a local hydro project and electric storage heaters with smart controls. A Orkney Surf ‘n’ Turf – where hydrogen is generated for use in stationary power. A Heat batteries paired with renewable production targeting fuel poverty in sheltered/social rent housing. A Levenmouth Community Energy Project – led by Bright Green Hydrogen, the project will provide low carbon transport, heating, and energy storage in Fife. A Energyzi ng Insch – integrated local energy system including a battery system for flexibility and storage. Role of the public sector: There is a clear role for government to make market reforms and adjustments that would incentivise energy storage, both at grid and decentralised community scale. Regulatory changes could take a variety of forms, such as development of forward capacity markets and liberalisation of energy markets to allow space for ESCO’s. Unless there is a re-assessment of reserved powers or greater Scottish input into the regulatory framework, these powers sit with the UK Government. Therefore this case study will focus on areas that Scottish and local government can influence to incentivise storage at a community level: A Government to set the vision of energy independence for remote and rural communities and put strategy and funding in place to realise this. A Government facilitation of strategic partnerships with distribution network operators and communities. A Continue to support competitions and challenge funds (such as the Local Energy Challenge Fund), with an increased level of funding and extended timescales. This funding mechanism is successful at developing innovative approaches in public-private partnerships that may otherwise not have been investible. Once technologies and approaches have been demonstrated via these funding mechanisms, they can become mainstreamed and deployed more widely using more conventional funding routes. A Supporting joint ownership, where communities are able to partner with private developers, local authorities or businesses. Government has a role in overcoming barriers such as access to funding, financial know-how and legal advice81. In common with addressing other local or regional energy issues, there is a role for government and local authorities to support ESCO’s and other financing schemes and work with local communities to develop energy master plans. This will require funding, capacity and capability at a national and local level. Carbon: Carbon savings would be achieved through the enabling of additional low carbon generation, which may be from new renewables or existing generation capacity that is currently constrained. The use of stored low carbon energy, whether for heat, transport or electricity, reduces reliance on fossil fuel derived energy. Economic viability: In its simplest form the business model for energy storage relies on buying energy when prices are low due to a supply surplus, and utilising or selling when prices are high due to high demand or a shortfall in supply. There are market mechanisms for electricity storage that provides this function to the UK grid, but it is generally accepted that the current UK market conditions do not provide sufficient incentive to invest in capital intensive electricity storage82, or recognise the full benefit that electricity storage provides such as the avoidance of investment in grid reinforcements and


39

generating capacity. However, taking a whole system approach – not just buying and selling electricity from the grid, but considering switching between electricity, thermal and transport in local energy economies – can enable economically beneficial solutions to be found that address community needs. The value of stored energy may be considerably higher when there are grid-constrained renewables combined with high heating and transport fuel costs, as is common in rural and island communities. Timescale: The timescale for deployment at a community level is dependent on a range of location and technology specific factors. In general, for smaller scale storage technologies, the installation stage will be relatively short in comparison to the upfront planning stages, including option identification, business case development and funding. Growing these from isolated rural examples to a significant number of community storage projects across Scotland is likely to take a number of years and is reliant upon addressing some of the existing market failures that are preventing more widespread adoption. International comparison and best practice: Forward Capacity Markets in the USA83 are an example of a market mechanism to incentivise demand side participation and storage in electricity markets. There are many examples of community scale storage in Europe; such as the community in Feldheim, Germany that owns its heat and electricity network, also operated in a private-public partnership, with wind, biogas generation and electric battery storage84. In Vestenskov, Denmark there is a hydrogen network, which uses wind power to generate hydrogen for heating and transport in a public-private partnership. At a larger scale, the heat networks in Denmark have long been providing grid-buffering services to the grid through thermal storage. Role for smart technologies: Smart controls are central to the success of community level storage, with analytics and optimisation required to ensure that charging and discharging of storage systems are timed to maximise low carbon generation and cost effectiveness. In an urban setting, the Future Cities programme has funded smart building management systems across ten public buildings in Glasgow to control systems such as heating and cooling in response to local network issues. This involves working with the distribution network operator to understand the value this provides to the network85. Systems level approach: There will not be a ‘one size fits all’ solution for all communities. Assessing each situation at a strategic, whole energy system level, including electricity, heat and transport will be required to find the most appropriate technological solution for each community, while ensuring energy efficiency upgrades are carried out where necessary. The social and economic considerations will also drive the financing and ownership choices. Behaviour change and education programmes are needed to ensure that the community can maximise the benefit of storage, for example understanding the role that domestic space heating storage is playing will also be critical. Link to other case studies: There is overlap with the three district heating case studies, as district heating can perform storage function at a community scale. Aspects of the low carbon transport hubs case study also perform a storage function using electric vehicle batteries and hydrogen for grid balancing. As energy efficiency measures are also crucial to ensure that communities maximise the benefit of storage schemes, the retrofitting of buildings case study is also highly relevant.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Application

Successful local

Fosters

A diverse range

Community

of novel

energy economies

community

of storage

energy brings

technologies and

can allow

cohesion and the

technologies

generation and

novel applications

communities to

deployment of

are covered. In

storage closer

of existing

strengthen and

more innovative

general, these

to the public,

technologies,

grow. Realising

approaches

technologies

encouraging

with the goal

this in practice

may provide

do not have

them to take

of realising the

and at scale

technology

significant

ownership and

statement of

will require the

transfer

environmental

engage with

intent in the

economic case

opportunities.

benefits beyond

energy efficiency.

recent Community

for storage to be

carbon reduction

Energy Policy

more robust than

or significant

Statement.

it currently is by

negative impacts.

addressing market failures. Forging Scotland’s Way Ahead

40

Energy from wastewater programme

Overview:

This project would transform wastewater treatment from an energy consuming activity to a net energy producing activity, by turning wastewater treatment plants into small power plants. There is considerable energy potential in wastewater including chemical, heat and gravitational potential energy. The biggest opportunities lie in recovering the energy value of sewage (approximately 7 watts per litre) which could be harnessed through anaerobic digestion and other energy recovery processes. Anaerobic digestion (AD) is a biological process which generates biogas from the fermentation of organic materials. The limiting factor is the volume of material required to generate electricity (it is estimated that the sewage from 100,000 homes is required to generate 51kW of electricity equivalent to powering 500 light bulbs)86. In order to generate enough energy to be financially viable, co-digestion would be required which incorporates other waste streams such as agricultural or household food waste. The proposed project is to develop a pilot scheme co-digestion plant that could be scaled up and replicated throughout various Scottish Water sites. This would require research and development in conjunction with regulators to identify appropriate waste streams that could feed the plant at optimum levels. Justification: By incorporating co-digestion, this would combine energy-rich organic materials such as food waste and fats, oils and grease (FOG) that could be collected from restaurant grease abatement

A pilot scheme for a co-digestion plant would be developed in conjunction with R&D to scale-up and implement across many Scottish Water sites.

devices. The benefits of co-digestion are two-fold: food waste and FOG is diverted from landfills and public sewer lines, and instead the energy production potential is harnessed for biogas production. FOG and food waste are high-energy materials, producing at least three times as much biogas as wastewater87. This programme could link up with other drivers to decentralise energy and water provision. For example, first time sewage provision using large scale treatment methods is very expensive per household in small/remote communities. Technologies that work well in cities with economies of scale may not be appropriate for these sites; however combining waste water treatment with electricity/heat generation through small co-digestion plants which feed into district heating schemes could provide more cost effective, sustainable solutions. Context: Scottish Water (SW) is the largest single electricity user in the country (estimated at 3% of total consumption). SW are close to offsetting their own electricity consumption with renewable generation, including wind farms which are not owned by SW but operate on SW owned land. The target is to become net producers of electricity by 2018. Scottish Water estimates that the energy recovery Forging Scotland’s Way Ahead

41

potential in sewage is more than sufficient to become a net exporter or generator of electricity within the next 10 years88. Role of the public sector: The public sector has a role to play in providing investment for innovation for this technology, as the pace of development is one of the main barriers preventing its widespread adoption – in reality it can take 10 years for a pilot scheme to transition to large commercial scale89. There is compliance risk associated with adopting more innovative technologies, and an overly risk averse approach may therefore limit the pace of progress. Scottish Water would be the key public sector stakeholder; however SEPA and other regulatory bodies would need to be involved in a ?dialogue to take a more balanced approach to compliance risk when more innovative, carbon saving approaches are available90. There could be an opportunity for cross-sectoral partnerships, for example amending regulations in order to allow co-digestion with other types of waste. Applying a co-ordinated approach to agricultural, industrial and domestic waste, would ensure that there is enough feedstock to develop a business case. Public sector bodies such as Zero Waste Scotland would need to be engaged in this process, as would local authorities. Carbon: Carbon savings are achieved by the use of biogas to generate electricity, which is considerably less carbon intensive than fossil fuel combustion. These benefits are enhanced by co-digestion which would divert FOG and food waste from landfill where they emit greenhouse gases (methane) which are largely non-productive. Some landfill sites have methane collection systems for on-site energy generation; however, fugitive emissions are still a problem. Potential carbon savings could be further increased by exploiting the heat generated as a by-product as a source of renewable heat. Economic viability: As an example, Yorkshire Water’s plant at Blackburn Meadows cost an estimated £23.3m but saves £1.3m per year in energy costs, having a payback period of 17 years91. With codigestion, the up-front development costs may be higher to identify the appropriate combination of technology and waste streams to maximise energy recovery. However, the potential returns are greater as there are revenue streams from gate fees and additional energy generated. Timescale: This technology is still in its infancy in the UK. It is anticipated that a pilot scheme could be developed over the next 5-10 years, depending upon the approach taken by regulatory bodies, the desire of other stakeholders to participate in co-digestion and the priority given to it by Scottish Water and the Scottish Government. After successful pilot schemes large scale roll-out across Scotland can be programmed. International comparison and best practice: This innovation is widely used in Scandinavia by the company Scandinavian Biogas and has proved extremely successful. One treatment works in Varberg has the capacity to produce 3.1 million cubic metres of vehicle fuel grade biogas. A new receiving station has the capacity to receive 18,000 tons of external waste92. Co-digestion has been implemented by Veolia Water at the South Pest treatment works in Budapest, Hungary which treats the wastewater for 300,000 residents. The plant also receives industrial and commercial food waste, generating revenue from gate fees. A second plant in Braunschweig, Germany, treats the wastewater generated by 250,000 people combined with FOG collected from local businesses to improve the plant’s biogas yield93. In the UK, Yorkshire Water is currently constructing a new anaerobic digestion plant in Sheffield that will generate renewable electricity of up to 1.9 MW from sludge, powering the treatment of domestic and industrial waste from 830,000 customers. The plant will reduce Yorkshire Water’s carbon emissions by 30%, saving 6,500 tCO2 per year. Yorkshire Water has also been developing the UK’s first energy neutral sewage works at Esholt near Bradford. This is a £30 million project to install the UK’s first BioThelys Sludge Treatment Plant94. Role for smart technologies: Smart technologies and real time monitoring could be employed to monitor input volumes, predict production and to match the generation of energy surplus with periods of peak demand as the grid requires. If the plants were linked up to a district heating network, smart technologies could also be employed to optimise heat management. Systems level approach: A holistic approach to energy, water and waste issues will be required at local authority and regional levels. Multi agency engagement is required to establish co-digestion potential for new plants. This will require working with local authorities and businesses to assess locally available feedstocks and enter into long term agreements. Engagement required with sectors including agriculture, waste and other industries.


42

Strategic planning is required to maximise heat recovery opportunities, such as aligning with planned or existing heat networks. Developing a local market for biogas or injecting into the gas grid will greater engagement between Scottish Water, other utilities and community energy initiatives. Changes to management, collection and processing of organic waste will be required as well as behavioural shifts from the public and businesses in increasing recycling rates. Link to other case studies: This proposal includes overlap with community energy initiatives, and the district heating case studies.

Benefits Assessment

Additionality

Prosperity

Co-benefits

Environment

Behaviours

Additional to

Potential for job

Divert FOG and

No significant

Encourages

existing efforts.

opportunities for

food waste from

local

recycling as

Scottish Water

the R&D stages.

landfill, avoiding

environmental

there is a clear

is looking at

Scope to export

fugitive methane

benefits beyond

link to positive

energy generation

both technology

emissions.

carbon reduction

outcomes. This

at small scale

and expertise

and reduction in

must be balanced

works as a means

internationally.

waste to landfill.

with the need

of offsetting

Robust controls

to ensure that

consumption but

required to

codigestion

no programme

manage odour

would not result

exists for co-

effectively from

in an overall

digestion.

the plant

increase in food waste.


43

4. Developing Low Carbon Infrastructure 4.1 Findings The progress that has been made towards reducing Scotland’s carbon emissions provides a good foundation and policy framework from which to build. However, a step change in the pace and scale of low carbon infrastructure development is required. The infrastructure that is built over the next five to ten years will be the infrastructure in use in 2050, and it is crucial that this infrastructure enables low carbon behaviours for all, rather than locking us into a high carbon trajectory. The approach to developing low carbon infrastructure needs to be at a systems level, taking an area based, cross-sectoral view to understand how projects complement each other. There are lessons that Scotland can learn from infrastructure development internationally, where evidence based strategic plans are developed and followed through. Local government has a significant role in supporting low carbon infrastructure development amongst its communities. To successfully develop projects local authorities need to be supported to ensure they develop capability, focus, provide capital and lead with planning requirements. Scale-up of projects is required to attract institutional investors, which may require local authorities to operate across sectors and local authority boundaries and collaborate with other partners. There are several practical steps that the public sector can make to progress Low Carbon Infrastructure. The role of the public sector is often in funding the high risk or long return period initial capital investment phase of projects, to lever in private sector investment. Otherwise these projects may remain unviable, despite the societal benefits. District heat networks are a classic example, where once the network infrastructure is constructed, the private sector can follow and heat markets can develop using a diverse range of sources. Therefore capital budgets should be reoriented towards these kind of low carbon investments to avoid continuation of this “chicken and egg” stalemate situation.

4.2 Conclusion This report should stimulate debate within Scotland on the type and location of new infrastructure that we need to help us meet our climate change targets. Some of the project suggestions will require vision and better collaboration to deliver them, some will need more innovative approaches to realise their delivery. Some of these ideas are already the norm in a number of countries but they could see Scotland move to the fore within the UK, showing the necessary leadership required to demonstrate how a low carbon society can be delivered. The case studies have been developed in consultation with key infrastructure providers, academics, the private sector and the investment community. They should allow for an open debate on what a future low carbon Scotland could look like and how it can be deliverred. It is hoped that people will engage in this debate and that this report will kick-start discussion on how Scotland can select, plan and deliver the new low carbon infrastructure that will meet the needs of future generations.


44

Acknowledgements

This report was developed in collaboration with the Low Carbon Infrastructure Task Force: Sara Thiam, Chair, Institution of Civil Engineers Elizabeth Dirth, 2050 Climate Group Sam Gardner, WWF Scotland Alex Hilliam, Changeworks Andy Kerr, Edinburgh Centre for Carbon Innovation Ross Martin, SCDI Janice Pauwels, Scottish Cities Alliance/City of Edinburgh Council Paul Steen, Ramboll Gavin Templeton, Green Investment Bank Katherine Trebeck, Oxfam GB Kate Turner, Pinsent Masons Brian Veitch, Veitch Consult Mary McAllan, Scottish Government (Observer)

In addition, a number of experts were interviewed when developing the ideas presented in this report, and their contributions are gratefully acknowledged: Andrew Howie (Air Products) Chris Morris (Local Energy Scotland)

Mark Williams (Scottish Water)

Ciaran Higgins (Glasgow Future Cities Programme)

Martin McCaffrey (Green Investment Bank)

Colin Cunningham (University of Strathclyde)

Nicholas Gubbins (Community Energy Scotland)

Colin Imrie (Scottish Government)

Nigel Holmes (Scottish Hydrogen and Fuel Cell

Dave Pearson (Star Renewables) David Forbes (SSE Heat Networks) David Spaven (Rail Freight Group) David Townsend (Town Rock Energy) Dr Derek Pedley (Environmental Sustainability KTN) Emma Greer (Massachusetts Institute of Technology) Ewan Swaffield (Transport Scotland) Gregor Patterson-Jones (Green Investment Bank) Ian Arbon (University of Glasgow / Engineered Solutions) Jim Purves (Celtic Renewables) Julie Alexander (Siemens) Keira McLuskey (Network Rail) Laurence Kenny (Transport Scotland)

Association) Nigel Wunsch (Network Rail) Paul Younger (University of Glasgow) Prof. Dr. Eduard Heindl (Heindl Energy) Professor Mercedes Maroto-Valer (Heriot Watt Energy Academy) Richard Bellingham (University of Strathclyde) Richard Braakenburg (Green Investment Bank) Robert Werner (Heindl Energy) Rufus Ford (SSE Heat Networks) Simon Parsons (Scottish Water) Simon Tricker (Urban Tide) Stephen Carr (Highland Council) Stephen Good (Construction Scotland Innovation Centre).

Malcolm Ball (Green Investment Bank)


45

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46.

Based upon an estimate by Aberdeen Heat and Power.

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75. The Existing Homes Alliance Scotland (2015). Warm, affordable to heat, low carbon homes for all. [Online] Available from: http://existinghomesalliancescotland.co.uk/wp-content/uploads/2015/05/EXHA_policybriefing_May2015.pdf [Accessed August 2015]. 76. WWF Scotland (2013) Raising the standard of our homes. [Online] Available from: http://assets.wwf.org.uk/downloads/ wwf_policy_update___raising_the_standard.pdf [Accessed August 2015]. 77. Innovate UK Technology Strategy Board (2015) Energy portal. [Online] Available from: http://futurecity.glasgow.gov.uk/ energy/ [Accessed August 2015] 78. Scottish Government (2015) Community Energy Policy Statement. [Online] Available from: http://www.gov.scot/ Resource/0048/00485122.pdf [Accessed August 2015]. 79. S Hamlyn (n.d.) Hydropower – Protecting the environment – supporting rural communities, British Hydropower Association. [Online] Available from:www.british-hydro.org [Accessed August 2015]. 80. Scottish Government (2015) Community Energy Policy Statement. [Online] Available from: http://www.gov.scot/ Resource/0048/00485122.pdf [Accessed August 2015]. 81. Resbublica (2013) The Community Renewables Economy Starting up, scaling up and spinning out. [Online] Available from http://www.respublica.org.uk/our-work/publications/community-renewables-economy-starting-scaling-spinning/ [Accessed August 2015]. 82. Institution of Mechanical Engineers (2014) Energy Storage: The missing link in the UK’s Energy Commitments. [Online] Available from:http://www.imeche.org/docs/default-source/reports/imeche-energy-storage-report.pdf?sfvrsn=4 [ Accessed August 2015]. 83. ISO new england (2015) Forward Capacity Market. [Online] Available from :http://www.iso-ne.com/markets-operations/ markets/forward-capacity-market [Accessed August 2015]. 84. Scottish Government (2015) Community Energy Policy Statement. [Online] Available from: http://www.gov.scot/ Resource/0048/00485122.pdf [Accessed August 2015]. 85. C Higgins, 2015 pers. Comm., 29 July 86. Yorkshire Water (n.d.) Poo Power. [Online] Available from: https://www.yorkshirewater.com/poo-power [Accessed August 2015]. 87. United States Environmental Protection Agency. Food Waste to Energy: How Six Water Resource Recovery Facilities are Boosting Biogas Production and the Bottom Line(2014) Available from: http://www.werf.org/c/KnowledgeAreas/Energy/ Latest_News/2015/Food_Waste_to_Energy_Report.aspx [Accessed September 2015] 88. Scottish Water Stakeholder Interview, 6 August, 2015 89. Scottish Water Stakeholder Interview, 6 August, 2015 90. Scottish Water Stakeholder Interview, 6 August, 2015 91. Yorkshire Water (n.d.) Poo Power. [Online] Available from: https://www.yorkshirewater.com/poo-power [Accessed August 2015]. 92. Scandinavian biogas (n.d.) Varberg. [Online] Available from: http://scandinavianbiogas.com/en/project/varberg-3/ [Accessed August 2015] 93. Water & Waste Treatment (2012) Sustainable wastewater option. [Online] Available from: http://wwtonline.co.uk/features/ sustainable-wastewater-option [Accessed August 2015]. 94. Water Briefing (2012) Yorkshire Water to Build UK’s first energy-neutral sewage works. [Online] Available from:http:// waterbriefing.org/home/company-news/item/5226-yorkshire-water-to-build-uks-first-energy-neutral-sewage-works [Accessed August 2015].


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The Low Carbon Infrastructure Task Force brings together key figures across the infrastructure lifecycle in Scotland, from the public and private sectors, construction and finance industries, the third sector and academia, under an independent chair. The task force champions the role of the public sector in funding low carbon infrastructure, helps build the case for low carbon infrastructure investment in Scotland and identifies and promotes a number of transformational low carbon infrastructure projects that will help shape Scotland’s future in line with requirements of the Climate Change (Scotland) Act. For more information on the work of the Low Carbon Infrastructure Taskforce and the Scotland’s Way Ahead project, please visit

www.scotlandswayahead.org.uk