The Mayor of London, Sadiq Khan, has today outlined plans for a major move to switch Transport for London – the capital’s biggest energy consumer – and the Greater London Authority (GLA) group to actively support renewable power over the next decade and to invest in building new renewable power infrastructure such as wind and solar farms.
London has an ambitious target to become a zero-carbon city by 2030. By changing the way electricity is supplied, we are seeking to move towards a greater use of renewable energy as a key measure in helping tackle the climate emergency and supporting London’s green recovery from the coronavirus pandemic.
A programme of work is now underway to procure renewable Power Purchase Agreements (PPAs). These are long-term contracts direct with energy generators which guarantee energy is supplied by renewable energy sources such as wind and solar power, rather than a mix of power generators that emit carbon into the atmosphere.
Work is underway to develop an innovative financing solution that would be used to fund the building of new wind and solar farms.
This would involve creating a fund for public and private investors to invest directly into new renewable projects, which in turn supply energy to the GLA Group.
The fund is anticipated to be a highly competitive and innovative structure with strong appetite from investors providing an opportunity for renewable developers to access bespoke funding for renewable assets in the UK.
Transport for London (TfL) will shortly begin procurement for its first PPA, and subject to securing a new financial agreement with Government, will enter into a PPA covering up to 10 per cent of its annual electricity use. Once procured, this would provide guaranteed renewable power to TfL from Spring 2022.
Another PPA covering a further 10 per cent will specifically look to secure renewable generation from ‘new build assets’ and therefore support the wider UK economy by creating green jobs in construction and operation. By agreeing in 10 per cent ‘blocks’, TfL can also benefit through being able to learn and adapt as the renewable market evolves.
TfL is one of the largest consumers of electricity in the UK, with a requirement for 1.6TWh per year, equivalent to the electricity consumed by around 420,000 homes* or 12 per cent of homes across London. All passenger rail services operated by TfL are electrically powered and, as part of the London Environment Strategy, TfL has been set the goal of achieving a zero-carbon railway by 2030.
Subject to a successful procurement route being developed and agreed, further tranches of energy purchasing by the GLA Group, linked to a financing offer, would subsequently be brought to market throughout the next decade, building on the approaches TfL is taking this year, with the aim that 100 per cent of the GLA Group’s power demands are from renewable sources, helping to drive more investment in new renewable energy infrastructure by 2030. ■
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