Appendix 2
For reference this appendix provides outline descriptions of the four EIZs (largely) extracted verbatim from the report of the Regional Energy Policy Commission, March 2018. Investment cases for the four proposed pilot energy innovation zones are set out in the separate Arup report for this project.ci Note that EIZ boundaries are subject to change as programmes of projects develop, up to the point at which any powers are devolved and funding allocated. The descriptions below are accurate as of March 2018.
The report of the Regional Energy Policy Commissioncii focuses on making the overall case for Energy Innovation Zones, while the Arup report provides an initial cost-benefit analysis of the specific zones.
It’s important to note that the limitations of Arup’s model prevented detailed or meaningful analysis of housing energy efficiency opportunities as part of this study. This does not mean housing is not seen as a critical opportunity in several of the EIZs and across the region more generally (see the main report) – it simply means that further local work will be required to detail the cost/benefit cases for housing energy investment. In practice, there are significant opportunities for commercially viable investment in housing refurbishment in Birmingham, the Black Country and North Solihull in particular. There are significant opportunities for innovative low carbon new housing in Coventry and Solihull and the Black Country (and indeed in the 215,000 new houses being built across the region in the next 15 years).
The four potential EIZs described have been proposed by local communities across the West Midlands and reflect local needs and perceptions of energy system opportunities and challenges. This is a critically important feature and point of departure for EIZs: that they are driven not only by climate imperatives and technical opportunities, but also by local market and customer needs. It immediately makes them distinct from many demonstration and innovation projects in the energy sector and aligned with the general shift towards more customer-centric approaches.
Each proposed EIZ presents distinctive opportunities for energy-system innovation, and each is at a different stage of development. This should help the process of generalising from the West Midlands’ experience to develop a generic EIZ ‘template’ – meaning an institutional and process model – that could be rolled out nationally. The philosophy is to be inclusive and offer any community the opportunity to nominate an area as an EIZ, provided it meets defined criteria such as willingness to accept innovative low carbon solutions and special regulatory oversight. In this way EIZs should be seen and designed as a privilege for which areas compete, and a mechanism with potential significantly to accelerate energy systems transition nationally.
On the other side of the equation, innovators and government will in turn need to accept the validity, diversity, and importance of local needs in defining the goals of a given EIZ, even where these needs may not align exactly with national priorities. In some cases, it may be possible to meet these needs purely through integrating existing technologies in new ways and require no fundamental technical or product innovation. Such EIZs may still create new markets and industries simply by providing scale; in other cases, pure process or business model innovation may be sufficient. All EIZs will accelerate the transition to a low carbon, more competitive energy system in the UK.
Black Country
As the seat of the industrial revolution in the late 18th century, the Black Country can claim to be the world's first 'energy innovation zone', and this heritage perhaps explains the enthusiastic local support for the proposed ElZ. But of the four potential ElZs, the Black Country is the least developed, and so provides the greatest opportunity to demonstrate a complete model of how an ElZ can be defined, developed and implemented. There is a strong desire in the area to lead the energy transition by securing investment in modern, clean energy systems which deliver power at globally competitive costs and thus support delivery of the national, as well as local, industrial strategy. The ElZ is intended to provide a focus for this, specifically within the geography of the existing Enterprise Zones.
The Black Country Enterprise Zones comprise a portfolio of sites in Dudley, Wolverhampton, Darlaston and 154 - Wolverhampton North, spread over 120 hectares. cil civ cv The focus of these zones is to promote and attract advanced manufacturing in the Black Country - by offering competitive advantage to manufacturers who locate there - e specially targeting aerospace, automotive and high added value engineering.
There are major manufacturing companies located on the i54 site, including JLR, Moog, Eurofins and ISP. This enterprise zone is known as one of the most successful in the UK, and total investment of more than £1.5 billion is expected across the Black Country over the next 15 years.
A key competitiveness issue for the Black Country is the cost of energy, and in particular the energy used in metal processing. Manufacturers using electricity to drive their processes are keen to secure reliable and high-quality energy supplies with predictable and highly competitive pricing.
Coventry and Warwickshire
Coventry and Warwickshire is an example of a potential EIZ driven by a relatively small number of key stakeholders with a tightly defined agenda: to satisfy strong electricity demand growth and develop infrastructure to support connected autonomous vehicles (CAVs) in particular. An EIZ could be used as an effective mechanism to ensure innovation and carbon reduction are effectively built into development plans, are properly scrutinised and integrated into local infrastructure.
Coventry and Warwickshire EIZ covers Whitley, Baginton, and a wide area around Coventry airport, incorporating land in Coventry and Warwickshire. This area is well served by transport networks, and significant growth is planned through developments such the £250M Coventry and Warwickshire Gateway scheme, and the £500M development of Whitley South – a 60-acre engineering technology hub next to Jaguar Land Rover’s global headquarters.
There is little spare capacity in the local electricity network, yet demand is forecast to rise significantly over the next decade. Coventry Central and Coventry and Warwickshire are reaching the limits their circuits can supply, requiring major reinforcement works to raise capacity. The city council has investigated options including a new 132 kV bulk supply point to the south of Coventry and a new super-grid transformer, which would involve significant capital expenditure. Current regulations do allow capacity to be built ahead of demand, but this requires someone to bear the risk, and if no entity is willing to, then it could hold up development.
Other areas of planned expansion in Coventry and Warwickshire are Gaydon and Ansty. Jaguar Land Rover and Aston Martin have plants at Gaydon, which suffers grid constraints that would limit the growth plans of these and other companies. Ansty has shown considerable growth in recent years and has potential for large development in the future. Both sites need to ensure adequate power supply to enable future development. Like UK Central Hub, these areas of economic growth and grid constraints need to develop timely and cost-effective clean energy solutions, which an EIZ could facilitate.
Tyseley and Birmingham
Birmingham is a well-developed potential EIZ, and the context is a much more established and dense urban environment, so the needs and opportunities are clearly distinct from those at UKCentral Hub, which is essentially greenfield. There is not yet a dedicated institutional structure congruent with the potential zone. There is, however, strong stakeholder and community engagement; a well-defined and large local market; a portfolio of energy innovation and investment projects at the Tyseley Energy Park; and 35MW of existing waste-to-energy power plants.
Birmingham city centre will undergo massive redevelopment over the next 15 yearscviii, particularly around the HS2 Curzon Street station (£900M), Smithfield (£600M), Snow Hill, Typhoo Wharf and Arena Central. cix The area suffers serious air pollution and the City Council is developing plans for a Clean Air Zone to start by 2020. This will require the construction of a substantial clean energy transport refuelling infrastructure, including hydrogen and electric vehicle charging at scale.
There is little space available for vehicle recharging in the city centre. Part of the solution may be to use the industrial land available at Tyseley, 5km east of the city centre, to produce clean energy for local communities, and power a new clean transport refuelling infrastructure. Tyseley is already the site of the city’s energy-from-waste (EfW) plant, which burns 350,000 tonnes of waste per year to generate 25MWe. The 16-acre industrial site next door is being developed as Tyseley Energy Park by its owners, Webster and Horsfall, and partners including the University of Birmingham, the City Council and the Greater Birmingham and Solihull Local Enterprise Partnership.
Key energy challenges and opportunities for an EIZ based around Tyseley and the City Centre include:
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integrating energy and transport infrastructure developments at a time of rapid change in both sectors;
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optimising use of the city’s 350,000 tonnes of waste which currently pass through Tyseley annually, ensuring neither waste nor energy market regulation inhibits delivery of sensible outcomes;
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making use of the latest clean technologies being developed and deployed by the Universities of Birmingham and Aston at Tyseley and elsewhere;
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making best use of the city’s planning powers to optimise the energy performance of new and existing buildings as more than £2 billion of construction investment flows into the city;
- ensuring the local community is fully engaged in the major changes proposed, and actively contribute to the success of the zone.
The stakeholder group for this EIZ includes the Birmingham City Council Planning and Regeneration Team, along with key city centre development stakeholders; ENGIE; the University of Birmingham; and Webster and Horsfall. The Tyseley Energy Park falls within the Tyseley Energy & Environmental Enterprise District, and the local authority has decided it will become Birmingham’s Energy and Waste nexus.
Tyseley Energy Park hosts a 10MWe biomass generating plant and private wire electricity supply. It is the depot for a growing fleet of rent-by-the-hour electric taxis – most of the city’s taxi drivers live nearby. A clean energy refuelling station is being built to provide EV charging, hydrogen and CNG for the city’s bus fleet, and for the refuse vehicles that supply the EfW plant.
Tyseley Energy Park has the potential to become an innovative demonstrator that integrates energy vectors including electricity, heat, liquid air, and hydrogen. The site will also be home to a University of Birmingham / Fraunhofer Institute shared research platform and Energy Skills Academy.
Work already completed or ongoing includes:
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Birmingham District Energy Scheme (owned by ENGIE);
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Clean Air Zone / vehicle refuelling recharging studies;
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masterplans for the Tyseley site by owners Webster and Horsfall/Energy Capital;
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heat network project at feasibility Part 1 stage;
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city solar feasibility study completed.
Future plans include recycling waste heat from the EfW plant through a heat pipe to the Birmingham District Energy Scheme in the city centre, owned and operated by ENGIE. This route would run through areas of dense housing including many energy-poor households. There may be synergies with new transport initiatives such as the proposed tram route to the airport, and refuelling and recharging infrastructure for the city.
Uk Central
UK Central is a well-defined and developed potential EIZ. Local institutional structures to support major investment and regeneration projects already exist; the location is one of the best current opportunities in the world to set the benchmark for the type of mixed-use development that can be delivered around a multimodal transport interchange; and there is strong stakeholder support for innovation. Significant work has already been undertaken to define future energy and utility scenarios and potential local investment incentives and value capture mechanisms.
The UK Central Hub is an economic area which includes the significant infrastructure of Birmingham Airport, National Exhibition Centre, Jaguar Land Rover, Birmingham International Station and Birmingham Business Park. From 2026 it will include the High Speed 2 rail station and the mixed-use Arden Cross development. Each of the stakeholders has ambitious growth plans that will increase the level of employment and housing in the Hub area and support the wider West Midlands economy. In order to support this opportunity Solihull Council formed the Urban Growth Company (UGC) to concentrate public sector investment on removing infrastructure constraints.
UGC has already done considerable work to develop infrastructure plans for the areacx, and a ‘value capture’ framework of potential funding mechanisms.cxi It is now investigating potential constraints in the capacity of utilities to supply the planned developments and has commissioned Peter Brett Associates (PBA) to analyse current capacity and potential demand over the next 30 years. Initial discussions with Western Power Distribution and National Grid suggest current spare electricity grid capacity amounts to 20–25MW at the Elmdon Primary Substation, but that planned developments may need a further 80MW. This could require an additional primary substation and reinforcement of the local substations. Without this investment the growth will either stall due to power shortages, or be delivered at a much slower rate, as the developments need to bear the additional costs of upgrading the electricity network.
Electric vehicles could present an even greater challenge to grid capacity. The Hub currently has around 40,000 car parking spaces, which could rise to over 60,000 in the next 20 years. High level estimates procured by UGC suggest that if the Hub installs multiple EV charging points it could require significant additional grid capacity. This estimate is based on private cars only and does not include an allowance for future electric heavy goods vehicles or aircraft.
No-one yet knows exactly how much impact the planned development and electric vehicles will have on electricity demand at the Hub, but innovation in supply, control and use must be encouraged if a system is to be designed in the most economic way.
One potential solution might be to find alternative funding mechanisms to build additional substation capacity ahead of demand and reserve the capacity for Hub members – like the approach of the Ebbsfleet Development Corporation, which is investing £30M for new substations to supply the new garden city in Kent.cxii Another would be to create an Energy Innovation Zone to encourage lower cost and more innovative solutions. The Hub has many energy-intense users with large peaks and troughs in demand, and it may be possible to avoid or at least minimise capacity upgrades through innovative approaches.
The Hub has large heating and cooling loads that could be integrated with the electricity grid and wider systems such as waste. The scale and concentration of its electricity and thermal demand creates a huge opportunity for clean energy innovation and building efficiency that will probably be unmatched in the UK over the next two decades. The Hub has commissioned a Heat Network Techno-Economic Feasibility Study, due to report later in 2018.
The Hub is only one of UK Central’s four development zones. The others are North Solihull (Zone 2, a £1.8 billion regeneration programme), Solihull Town Centre (Zone 3, a major retail, office and leisure destination), and Blythe Valley Park (Zone 4, a business park). Each has its own energy challenges and priorities. North Solihull, for example, must regenerate large numbers of 1950s/60s housing stock in Chelmsley Wood, where there are high levels of fuel poverty. Solihull Town Centre has recently completed a feasibility study that identified a low carbon heat network opportunity that would be technically and economically viable. Blythe Valley has the potential to develop a hydrogen hub. Each could therefore form its own EIZ, but there may also be a case for creating a single overarching EIZ to cover all four UK Central development zones.