MD2394 Home Response (phase two)

The Mayor wants London to be zero emission by 2050. Home Response will accelerate the delivery of many Mayoral objectives and proposals set in the London Environment Strategy:

• For London to be a zero-emission city with clean transport and clean energy;
• To develop clean and smart, integrated energy systems utilising local and renewable energy resources;
• To investigate the potential for demonstrators where Londoners can help manage London’s energy demand; and
• To undertake demonstration projects to improve London’s energy systems.

The Greater London Authority, in partnership with Element Energy, Moixa, Repowering London and UK Power Networks, has been conditionally offered grant funding of £927,842 from the UK Government Department for Business, Energy and Industrial Strategy (BEIS) Domestic Demand Side Response Competition (phase two). The grant income to project partners is GLA (£214,570), Element Energy (£104, 918), Moxia (£427,835), Repowering London (£147,360) and UK Power Networks (£33,159).

BEIS’ aim for Domestic Demand Side Response (DSR) Competition (the ‘Competition’) is to identify and demonstrate controllable, flexible electricity demand in households. BEIS is interested in demonstrations that better control existing demand for electricity (for example for heating water for washing etc). Also, demonstrations that control emerging technologies that supply demand for electricity that could offer substantial flexibility in the future (for example using batteries to store green electricity from solar PV and supply power to the grid at times of peak demand between 4pm and 7pm). Projects that demonstrate novel business models that engage consumers in meaningful and sustainable ways are also encouraged.

A first phase feasibility study, also grant funded by BEIS and approved by decision ADD2245, identified flexible ways to manage electricity use and demand in Londoners’ homes. The study resulted in a funding proposal to complete a phase two demonstration to test the phase one recommendations of how to control electricity demand and use it flexibly. The Home Response proposal was selected by BEIS, from over thirty proposals, for conditional grant funding worth £927,842.

Home Response will demonstrate, from January 2019 and finish in December 2020, how electrical hot water heating and solar PV with battery storage technologies can be used in Londoners’ homes to cut energy bills, financially reward flexible use of energy, reduce emissions and contribute to a smarter, cleaner energy system for London. These technologies will be controlled in 160 social housing households (with their consent), enabling and rewarding those households who lower their electricity use at peak times and/or shift their electricity use to non-peak, lower carbon times of the day, or supply clean electricity stored in batteries. In return for being flexible users of electricity, households will receive payments, via commercial project partners, from national (National Grid) and local electricity grid (UK Power Networks) operators to meet their needs for flexible capacity to meet Londoners’ variable demands for power, i.e. at peak times of the day between 4pm and 7pm when more power is needed.

By using innovative business models and customer engagement approaches, combined with controlling when hot water heating and batteries are used, the project team aims to supply 0.5MW of additional, flexible electrical power to local and national electricity networks by December 2020 – increasing low carbon energy capacity and security of supply. We believe the replication potential across London is up to 1MW by December 2022, which will contribute to London’s estimated 1 GWe of flexible peak electrical power capacity by 2050.

The GLA is contractually responsible for:

• Ensuring all grant agreement obligations are followed and fulfilled as accountable body to BEIS;
• Running the project management office, ensuring all collaboration agreement obligations are managed through the project governance arrangements stated in the agreement; and
• Disseminating project learnings and opportunities to electricity customers and stakeholders across industry, public and community sectors.

The GLA’s funding of £214,570 will be used to cover revenue costs from January 2019 – December 2020 for a full-time, fixed term project manager (offered as an internal recruitment opportunity in the first instance), days spent on the project by existing staff, associated project management expenses, and dissemination and learning activities on behalf of the project partners.

The objectives for Home Response are to:

• Engage and recruit households by using innovative engagement methods that have been tried, tested and improved upon through the development of community energy projects;
• Remotely control households’ flexible demand for electrical hot water heating and solar PV combined with battery storage technologies by using Moixa’s GridShare software and hardware technologies to commercially trade additional power capacity with UK Power Networks and National Grid to meet their network capacity and balancing (supply and demand) needs;
• Moxia will give their participating households a share of the profits and rewards received from energy trading (this will not be from the grant);
• Moxia to manage everything for households. Once they have signed up to GridShare there’s nothing they need to do. Moixa will sell the energy, collect payments from network operators, and once a year send customers their share;
• Develop and trial two flexible energy business models aimed at households that provide replication potential for commercial energy businesses and community energy organisations;
• Meet UK Power Networks need for local level electricity grid capacity flexibility (which includes increasing supply and reducing demand for electricity) at times of critical need for Londoners (i.e. peak times of the day between 4pm and 7pm);
• Meet National Grid’s capacity and supply and demand balancing needs for the national electricity network; and
• Demonstrate and disseminate to communities with similar opportunities how to implement household demand flexibility by producing detailed materials, events and learning experiences.

The outcomes for Home Response are to:

• Provide greater levels of demand flexibility (up to 0.5MW) by controlling electrical technologies and testing the usefulness of smart meters in 160 social housing households, managed by Housing Associations and London Boroughs;
• Create new business and customer engagement models to reward Londoners’ flexible use of energy and kick start household flexibility markets, with the aim to provide up to 1MW of flexibility services for grid operators by December 2022;
• Demonstrate and disseminate project learnings and opportunities to household electricity customers and stakeholders across the public, private and community benefit sectors;
• Realise a range of energy system benefits;
• Deliver the Mayor’s policies and proposals to develop clean and smart, integrated energy systems utilising local and renewable energy resources; and
• Accelerate collaboration and partnerships between energy users, technology and supply chain providers, researchers and policy makers to provide technical, commercial and environmental solutions and benefits.

The GLA will ensure that (as part of its on-going legal responsibility to have due regard to the need to promote equality, in everything it does, including its decision-making), barriers are removed that may prevent those with protected characteristics benefiting from the project. The project will require the partners to identify those protected groups who could benefit, determine whether barriers exist and measures to remove those barriers. The partners will estimate the numbers involved for each relevant characteristic.

The GLA Environment Unit commissioned an Integrated Impact Assessment (IIA) on the draft London Environment Strategy. This evaluated the social, economic, environmental, health, community safety and equality consequences of the strategy's proposed policies to ensure they are fully considered and addressed. A post-adoption statement showing how the IIA influenced the final strategy and Equality Impact Assessment (EqIA) report has been published.

Key Risks, Impact, Mitigation

1. The Mayor wants London to be zero carbon by 2050. To help achieve this aim the London Environment Strategy has set the policy objective to develop clean and smart, integrated energy systems utilising local and renewable energy resources. This objective will, in part, be delivered by demonstration proposals, like Home Response, which improve London’s energy systems and investigate the potential for Londoners to help manage London’s energy demand.

​​​​​​​Mayoral approval is sought for the acceptance, and distribution to project partners, of the conditional grant offer of £927,842. The grant will be from the UK Government Department for Business, Energy and Industrial Strategy (BEIS) to fund the phase two Home Response project. The GLA will be paid by BEIS through grant claims process after actual expenditure has been incurred.

The income will be claimed by the GLA from BEIS on delivery of agreed work and the GLA will then grant the partners: Element Energy (£104,918); Moxia (£427,835); Repowering London (£147,360); UK Power Networks (£33,159), leaving the GLA with £214,570 to be utilised on a full-time fixed term project manager, existing staff time, associated project management expenses and dissemination and learning activities.

Approval is therefore also sought to spend the GLA element of the grant. The expected spend profile of this grant is detailed below.

The foregoing sections of this report indicate that:

- The decisions requested of the Mayor fall within the GLA’s statutory powers to do such things considered to further or which are facilitative of, conducive or incidental to the promotion of social development and the promotion of the improvement of the environment in Greater London; and

- In formulating the proposals in respect of which a decision is sought officers have complied with the GLA’s related statutory duties to:

(a) Pay due regard to the principle that there should be equality of opportunity for all people;

(b) Consider how the proposals will promote the improvement of health of persons, health
inequalities between persons and to contribute towards the achievement of sustainable development in the United Kingdom; and

(c) Consult with appropriate bodies.

In taking the decisions requested, the Mayor must have due regard to the Public Sector Equality Duty; namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010, and to advance equality of opportunity and foster good relations between persons who share a relevant protected characteristic (race, disability, gender, age, sexual orientation, religion or belief, pregnancy and maternity and gender reassignment) and persons who do not (section 149 of the Equality Act 2010). To this end, the Mayor should have particular regard to section 3 (above) of this report.

Officers have indicated that the contribution to the project partners amounts to the provision of grant funding and not payment for services. Officers must ensure that:

(a) The funding is distributed fairly, transparently in accordance with the GLA’s equalities duties and in a manner which affords value for money in accordance with the GLA’s Contracts and Funding Code;

(b) Appropriate funding agreements are put in place between and executed by the GLA and project partners before any commitment to fund; and

(c) The GLA’s use of the BEIS funding and its arrangements for the same is fully compliant with the conditions applicable to that funding.