Unbeknownst to almost all of its 8,000 residents and 480,000 daily visitors, buried beneath London’s Square Mile there sits a hidden power station. The tri-generation Citigen system provides electricity for the grid as well as heating and cooling via a district heating scheme to the historic heart and financial centre of the UK capital, saving an estimated 5,000 tonnes of CO2 a year and aiding in climate action.
Operated by E.ON, heat is generated by two high-efficiency combined heat and power engines, with new technology coming online in the form of three heat pumps and boreholes, extending 200m beneath the city streets, capturing the natural warmth of the earth.
Waste heat is also recovered from engine exhausts, turbochargers, jacket cooling, and lubricating oil and transferred via heat exchangers into the network, increasing efficiency, decarbonising heating requirements and reducing costs. Furthermore, the system has the potential to double its output.
Indeed, efforts to expand Citigen connectivity both reflect a need for localised, site-specific solutions to drive decarbonisation efforts, and serve as a helpful metaphor for the themes of collaboration, private-public engagement, and mutual wins that will be essential for driving wider net-zero efforts.
Connecting new members to the network helps accelerate their own decarbonisation journeys while making the system as a whole operate more efficiently. E.ON and the City of London Corporation are therefore actively looking to grow awareness and participation among businesses and landowners across the City.
“To decarbonise a borough, everyone must be involved, not least private enterprise,” says Stuart Beasley, head of energy solution sales at E.ON. “To get them on board, they must be made aware of what’s possible and the direct benefits engagement can bring. E.ON can play a big role there because we’re already decarbonising public and private enterprises across the UK. That experience means we can make recommendations that go into concrete plans that make a real impact.”
But infrastructure across the Square Mile must also be upgraded and optimised in order to be able to fully benefit from such programmes. Citigen is just one aspect of a far larger decarbonisation plan for the City of London Corporation, which has targeted net zero across its operations by 2027; and across its full value chain – creating “a Net Zero Square Mile” – by 2040.
An overarching vision for decarbonisation
The City of London Corporation is not alone in publishing an ambitious Climate Action Strategy, but it is leading the way when it comes to evidencing real-world impact – and unique in its relationship with the entities that will help finance the wider transition. Carbon emissions have already been cut by over 30% on 2018 levels. Energy consumption has been reduced by more than 20%.
Such success requires buy-in and leadership from an array of stakeholders, not least commercial enterprises and private investment.
“I was very clear from the offset that this had to be impactful, deliverable and funded,” says deputy policy chairman at City of London Corporation Keith Bottomley, who led the development of the Corporation’s Climate Action Strategy. “It is a vital policy area and we’re committed to working with all stakeholders to accelerate the transition to net zero.”
In conjunction with its responsibilities as a local authority, a central tenet of the corporation’s work is promoting and advancing the interests of the UK’s financial and professional services sector – a sector that accounts for 13% of UK government tax uptake and 8% of the country’s GDP. A significant and growing proportion of this work involves the promotion of green and sustainable finance initiatives.
“Transition will not happen without private finance and private investment,” says Bottomley. “Public funding will lead on a lot of this. The government has already committed £20bn to the National Infrastructure Bank. That’s a drop in the ocean, but it does signify an intent to lead.”
Indeed, The Cities Commissions for Climate Investment (3Ci), for which Bottomley sits on the political advisory board, estimates that currently identified net-zero projects in the UK’s 11 largest cities require £330bn in investment. Engaging private enterprise is an essential component of closing that gap.
“There is a supply-side problem with bringing projects forward,” Bottomley says. “There’s plenty of appetite on the part of investors, particularly around green finance, but the challenge comes down to moving from commitment to delivery. The money may be in place, but are your transition plans robust enough to actually deliver?”
The local climate action challenge
Building that robustness into the City’s own Climate Action Strategy has been a driving principle, with the corporation having set out a fully funded plan for 2020–27, underpinned by £68m in funding, alongside annual targets based on bottom-up, data-driven analysis, with progress independently audited and reported against annually.
Unsurprisingly, transport and buildings represent the two biggest emitters, with commercial buildings accounting for some 65% of the total. The City’s built environment presents some unique challenges when it comes to bringing these levels down, with over 600 listed buildings in the Square Mile alone.
The corporation is running a “Historic Retrofit Challenge”, incentivising energy-efficiency improvements and providing recognition for hard-to-treat historic buildings. A Climate Action Fund is also being developed, through which investors can combine resources to help tackle hard-to-treat emissions.
“It demonstrates our way of thinking and how we’re trying to bring various parties together,” says Bottomley. “Businesses and organisations should not feel they are doing this in isolation. Huge benefit comes through collaboration. The way to decarbonise cities is now pretty well understood but getting there requires all parties to work together.”
Defining ownership can add a layer of complexity when encouraging engagement from private businesses, with both the leaseholder and building operator needing to be in step with what is required and who ultimately foots the bill.
“Somebody has to take on the project,” says E.ON’s Beasley. “Where capital is invested, you typically see that being paid back across longer time periods. If the tenant moves out, is the responsibility left to the landowner, or does the tenant take a full solar array with them? It requires clear and open dialogue from the start.”
Finding the right solutions
In his role, leading B2B sales of energy solutions at E.ON, Beasley points to a significant increase in appetite for investment and new ideas across all sectors. He points to growing demands around ground and rooftop solar, heat pumps, wind programmes, and emerging battery technologies, driven by a mixture of environmental targets, brand equity, ESG legislation and mounting concerns around energy security and cost.
“We’re technology agnostic and look to match the right solutions to customer requirements,” Beasley explains. “Ultimately, the financials have to stack up. It often starts with an energy audit; visualising, understanding and optimising usage. Then you can start looking at the benefits of things such as solar or heat pumps for your estate.”
That visualisation and optimisation piece is still a major area of focus within the City of London Corporation also, with many efforts not necessarily requiring a huge investment. A programme of capital works identified in the first year of the Climate Action Strategy is primarily focused on medium-term energy-efficiency improvements in building stock.
“Much of it comes down to common sense actions,” explains Edmund Tran, senior energy engineer at the City of London Corporation.
“Whether it’s changing lights to LED or going in and ensuring buildings are being run properly, heated and ventilated at the right times, it doesn’t all have to be hugely fancy. We are looking to lower consumption and requirements, which requires a real mix of efforts and initiatives.”
Lowering consumption and energy requirements also plays a pivotal role in enabling buildings to participate in programmes such as Citigen, efforts that must be conducted in lockstep with a programme of education. “It is great to have because it is far easier to decarbonise one large heat source that supplies many users than to tackle individual sources across multiple sites,” Tran says.
“The heat network industry suffers a bit from lack of exposure and one thing we’re trying to do around Citigen is build up that awareness of the commercial benefits for building owners and operators to connect.”
Education and engagement on net zero
Beasley also stresses the importance of education and awareness programmes, pointing to how deeply integrated many of these businesses are into the social fabric of the cities within which they sit, such as supermarkets embedded into mixed-use developments and retailers offering significant EV charging infrastructure. Engagement across the board is required – something particularly true of heat networks.
“Many heat networks you see being established today are being installed in new-build developments,” says Tran. “That provides a nice clean slate for accommodating low-carbon technology.
“The unique situation we face is that we have a significant number of older, existing buildings that we need to get ready, replacing existing systems, and getting them into a position where they are ready to accept low-carbon heat.”
In densely populated areas such as London, there is a significant opportunity for heat exchange. E.ON’s decentralised energy system, ectogrid, is one such solution. Designed specifically for cities, it harnesses and balances thermal energy flows to provide both heating and cooling for homes and businesses. By connecting buildings with different needs, and using data analytics to balance demands and exchanges between them, energy is effectively distributed, decreasing both consumption and pollution.
Such retrofitting and enhancement options form just one part of a patchwork of efforts across the Square Mile and progress will, in large part, come down to being able to make a strong business case for pursuing upgrades. Success will also breed success, with an ability to evidence wins within both public and private sectors going a long way towards accelerating engagement.
Bottomley points to an open invitation to council leaders in London and beyond to visit the City and see the climate action initiatives already under way. Tran speaks about the benefits of the London Boroughs Energy Group as a forum for sharing learnings and best practise on everything from building management to large-scale procurement.
This sharing of ideas and success equally applies to the commercial sector, with E.ON acting as a bridge, cheerleader and investor in helping private enterprises realise these possibilities. Beasley says this has been evidenced in the growth of Citigen participation, where existing users have proved to be some of the most impactful promoters.
“The more we can amplify the successes businesses are having, the more engagement we see,” he continues. “We are now being approached by companies wanting to visit projects undertaken by other businesses and see it for themselves first-hand. That’s hugely valuable and something all parties are positive about.”
For details on decarbonising your organisation, go to eonenergy.com/decarbonising-newham.
