- Major development should be net zero-carbon. This means reducing carbon dioxide emissions from construction and operation, and minimising both annual and peak energy demand in accordance with the following energy hierarchy:
- Be lean: use less energy and manage demand during construction and operation.
- Be clean: exploit local energy resources (such as secondary heat) and supply energy efficiently and cleanly. Development in Heat Network Priority Areas should follow the heating hierarchy in Policy SI3 Energy infrastructure.
- Be green: generate, store and use renewable energy on-site.
- Major development should include a detailed energy strategy to demonstrate how the zero-carbon target will be met within the framework of the energy hierarchy and will be expected to monitor and report on energy performance.
- In meeting the zero-carbon target a minimum on-site reduction of at least 35 per cent beyond Building Regulations is expected. Residential development should aim to achieve 10 per cent, and non-residential development should aim to achieve 15 per cent through energy efficiency measures. Where it is clearly demonstrated that the zero-carbon target cannot be fully achieved on-site, any shortfall should be provided:
- through a cash in lieu contribution to the relevant borough’s carbon offset fund, and/or
- off-site provided that an alternative proposal is identified and delivery is certain.
- Boroughs must establish and administer a carbon offset fund. Offset fund payments must be ring-fenced to implement projects that deliver greenhouse gas reductions. The operation of offset funds should be monitored and reported on annually.
 Building Regulations 2013. If these are updated, the policy threshold will be reviewed
The Mayor is committed to London becoming a zero-carbon city. This will require reduction of all greenhouse gases, of which carbon dioxide is the most prominent. London’s homes and workplaces are responsible for producing approximately 78 per cent of its greenhouse gas emissions. If London is to achieve its objective of becoming a zero-carbon city by 2050, new development needs to meet the requirements of this policy. Development involving major refurbishment should also aim to meet this policy.
 ‘Carbon’ is used in the London Plan as a shorthand term for all greenhouse gases. London’s carbon accounting is measured in carbon dioxide equivalent, which includes the conversion of other greenhouse gases into their equivalent carbon dioxide emissions.
The energy hierarchy (Figure 9.2) should inform the design, construction and operation of new buildings. The priority is to minimise energy demand, and then address how energy will be supplied and renewable technologies incorporated. An important aspect of managing demand will be to reduce peak energy loadings.
Boroughs should ensure that all developments maximise opportunities for on-site electricity and heat production from solar technologies (photovoltaic and thermal) and use innovative building materials and smart technologies. This approach will reduce carbon emissions, reduce energy costs to occupants, improve London’s energy resilience and support the growth of green jobs.
To meet the zero-carbon target, an on-site reduction of at least 35 per cent beyond the baseline of part L of the current Building Regulations is required. The minimum improvement over the Target Emission Rate (TER) will increase over a period of time in order to achieve the zero-carbon London ambition and reflect the costs of more efficient construction methods. This will be reflected in future updates to the London Plan.
 Building Regulations 2013. If these are updated, the policy threshold will be reviewed.
Developments are expected to achieve carbon reductions beyond part L from energy efficiency measures alone to reduce energy demand as far as possible. Residential development should aim to achieve 10 per cent and non-residential development should aim to achieve 15 per cent over part L. Achieving energy credits as part of a Building Research Establishment Environmental Assessment Method (BREEAM) rating can help demonstrate that energy efficiency targets have been met. Boroughs are encouraged to include BREEAM targets in their Local Plans where appropriate.
The price for offsetting carbon is regularly reviewed. Changes to the GLA’s suggested carbon offset price will be updated, in future guidance. New development is expected to get as close as possible to zero-carbon on-site, rather than relying on offset fund payments to make up any shortfall in emissions. However, offset funds do have the potential to unlock carbon savings from the existing building stock through energy efficiency programmes and by installing renewable technologies – typically more expensive to deliver in London due to the building age, type and tenure.
 Boroughs should develop a price for offsetting carbon using either a nationally recognised carbon pricing mechanism or a price based on the cost of offsetting carbon across the borough. A nationally recognised non-traded price of £95/tonne has been tested as part of the viability assessment for the London Plan which boroughs may use to collect offset payments.
The Mayor provides support to boroughs by advising those which are at the early stages of setting up their carbon offsetting funds, and by setting out guidance on how to select projects. To ensure that offset funds are used effectively to reduce carbon whilst encouraging a holistic approach to retrofitting, Mayoral programmes offer additional support.
 For examples see London Environment Strategy.
The move towards zero-carbon development requires comprehensive monitoring of energy demand and carbon emissions to ensure that planning commitments are being delivered. Major developments are required to monitor and report on energy performance, such as by displaying a Display Energy Certificate (DEC) and reporting to the Mayor for at least five years via an online portal to enable the GLA to identify good practice and report on the operational performance of new development in London.
The Mayor may publish further planning guidance on sustainable design and construction and will continue to regularly update the guidance on preparing energy strategies for major development. Boroughs are encouraged to request energy strategies for other development proposals where appropriate. As a minimum, energy strategies should contain the following information:
- A calculation of the energy demand and carbon dioxide emissions covered by Building Regulations and, separately, the energy demand and carbon dioxide emissions from any other part of the development, including plant or equipment, that are not covered by the Building Regulations (i.e. the unregulated emissions), at each stage of the energy hierarchy.
- Proposals to reduce carbon dioxide emissions beyond Building Regulations through the energy efficient design of the site, buildings and services, whether it is categorised as a new build, a major refurbishment or a consequential improvement.
- Proposals to further reduce carbon dioxide emissions through the use of zero or low-emission decentralised energy where feasible, prioritising connection to district heating and cooling networks and utilising local secondary heat sources. (Development in Heat Network Priority Areas should follow the heating hierarchy in Policy SI3 Energy infrastructure).
- Proposals to further reduce carbon dioxide emissions through the generation and use of on-site renewable energy, utilising storage technologies where appropriate.
- Proposals to address air quality risks (see Policy SI1 Improving air quality). Where an air quality assessment has been undertaken, this could be referenced instead.
- The results of dynamic overheating modelling which should be undertaken in line with relevant Chartered Institution of Building Services Engineers (CIBSE) guidance, along with any mitigating actions (see Policy SI4 Managing heat risk).
- Proposals for demand-side response, specifically through installation of smart meters, minimising peak energy demand and promoting short-term energy storage, as well as consideration of smart grids and local micro grids where feasible.
- Proposals for how energy demand and carbon dioxide emissions post-construction will be monitored annually (for at least five years).
- Proposals explaining how the site has been future-proofed to achieve zero-carbon on-site emissions by 2050.
- Confirmation of offsetting arrangements, if required.
- Proposals to minimise the embodied carbon in construction.
- Analysis of the expected cost to occupants associated with the proposed energy strategy.
 This will build on the 2014 Sustainable Design and construction SPG.