Clean Energy Cities

Greater Manchester local energy market

City: Manchester    CEC Typology: Connected City

Overview

The Greater Manchester Local Energy Market (GM LEM) was a two-year project focused on designing a local energy market (LEM). It was created in a way that would transform the way the city generates and consumes energy – and limit future energy cost increases for residents, businesses and the public sector.

At the core of a LEM is a digital platform marketplace called the ‘market maker’ that enables customers with demand to buy from local generators with supply. This was designed and delivered by Krakenflex (an Octopus Energy company). Unlike pre-existing LEM marketplaces, this platform didn’t seek to balance energy itself. Participants were able to view what other local participants were offering, and buy or sell based on a variety of attributes including cost, carbon intensity and location.

GM LEM was funded by InnovateUK’s Prospering from the Energy Revolution (PfER) programme. Research from the project showed huge promise in helping to onboard assets to the LEM and to save customers money on their energy bills. It found that the LEM would remain viable with an investment of £2.7m over seven years, and would start generating a surplus that would grow to £1m/yr within a decade. Most of this surplus comes from ‘embedded flexibility’: avoided reinforcement costs.

OCTOPUS ZERO BILLS HOMES

City: London    CEC Typology: Connected City

Overview

‘Zero Bills’ is a project that provides new homes with a guarantee of no energy bills. Delivered in partnership with ilke Homes, the project was launched in 2022. By equipping homes with the right combination of insulation, technology and energy optimisation, new builds are able to qualify for the scheme. Homebuilders supply Octopus Energy with a masterplan to assess their eligibility for a Zero Bills House. This is based on a number of factors, such as the building’s orientation, its energy rating, insulation and heating system. Following accreditation, the homebuilders then fund the installation of low carbon technologies that can enable zero bills.

Each home is put onto the market with the accreditation and an option for the first occupant to activate a Zero Bills Tariff. The tariff uses remote access that allows Octopus to direct the flow of energy when generated, stored and exported. If the occupant has typical use, the bill for the user will be guaranteed at zero pounds for five years – and this is expected to continue beyond the period of guarantee. The use of the supplier and tariff is not mandatory, and all occupants can change to another supplier on day one without penalty.

Octopus Energy has created an algorithm that manages the solar panels, the battery, and the inverter remotely, taking a feed from weather forecasts, dynamically accounting for energy market conditions, and providing flexibility services to the grid when carbon emissions – and wholesale costs – are highest. Over 100 homes have been accredited, many for shared ownership by housing associations, and this number is only set to increase.

Tokyo Power Plan

City: Tokyo    CEC Typology: Connected City

Overview

The Tokyo Municipal Government (TMG) has created a new Power Plan to become an aggregator of distributed energy resources (DERs) in order to increase the use of renewable energy in the city. TMG’s building estate currently consumes approximately 900 million kWh of electricity, which is equivalent to about 1% of overall consumption in Tokyo. The government wants all electricity used at TMG facilities (including Governor’s bureaus and departments) to be sourced from renewable energy by 2030.

Rather than trying to increase renewable energy consumption by signing a purchase power agreement (PPA), the TMG looked to DERs. The national feed-in-tariff had ended in 2019, so the Tokyo Government needed to find new incentives to grow the base of locally-installed variable renewable energy across the city. It has therefore stepped in to aggregate domestic solar into a purchase agreement with homeowners to add to renewable energy generated locally at TMG property.

The supply of local generation is not sufficient for TMG to meet their targets; it is estimated that only 4% of suitable roofs actually have solar installed in Tokyo. The next stage in the program is to require installation of rooftop solar across smaller buildings in the city. First, the program will target housebuilders, not purchasers. It will also target major housebuilders supplying a total floor area of 20,000 square metres or more per year in Tokyo. The TMG expects that the approximately 50 housebuilders that come under this regulation will account for around half of new construction sites.

Komati Power Plant Renewal

City: Johannesburg    CEC Typology: Scaleable City

Overview

The renewal of 1,000 MW Komati power plant in South Africa is a $497 million project, funded by the World Bank, to decommission and repurpose the coal-fired power plant for renewable energy and batteries, while creating new opportunities for the affected workers and communities.

The plant was permanently shut down in October 2022. The entire site will replace 1000 MW of coal-fired energy with 220 MW of renewable energy. The World Bank approved the loan to improve the quality of electricity supply and grid stability. It cited the combination of investment in generation and storage – 150 MW of solar, 70 MW of wind and 150 MW of battery storage – as critical to its decision to fund the project.

South Africa’s Just Energy Transition (JET) outlines a strategy for its transition from a carbon-intensive economy. Coal power plants supply around 86% of South Africa’s 45GW electricity capacity. The country plans to decommission over half, or 24GW, of coal-fired plant electricity capacity by 2050. The closure of Komati is the first phase of implementation.

$497 million funding was made up of a $439.5 million World Bank loan, a $47.5 million concessional loan from the Canadian Clean Energy and Forest Climate Facility and a $10 million grant from the Energy Sector Management Assistance Program.