APPENDIX 62
Memorandum by the London Borough of Merton
THEMERTONRULE
POLICY
In October 2003 Merton became the first local
authority in the UK to include a policy in its Unitary Development
Plan that requires new building developments to generate at least
10% of their energy needs from renewable energy equipment such
a solar panels and wind turbines. This radical policy is an example
of how a local authority with an instinctive understanding of
the issue of climate change, and that has some imagination and
determination, has been able to change the landscape of low carbon
planning in a way that has significant implications for the renewable
energy economy.
The policy has caught the imagination of many
boroughs across the UK, and as they follow Merton's example and
adopt similar prescriptive policies of their own it will create
a huge demand for renewable energy equipment.
Merton has also played the key role in ensuring
that such renewable energy policies have become embedded into
the mainstream, and was instrumental in persuading the UK Government
to include an addition in its national planning policy guidance
(PPS22), confirming both the legality of such policies, and its
desire to see other boroughs emulate them. On 8 June 2006 the
process of mainstreaming was accelerated with the written Ministerial
Statement saying that; " .. the Government (will) expect
all planning authorities to include policies in their development
plans that require a percentage of the energy in new developments
to come from on-site renewables, where it is viable."
The first development required to respond to
the policy was 4,500 sqm in size and comprised of ten light industrial
units. The predicted CO2 emissions from the building
were cut by 10% through the installation of ten micro-wind turbines
and 9 kWp of photovoltaics. Contrary to some expectations, the
developer responded positively to the policy, seeing it as an
opportunity for them to get ahead of the game in designing, constructing
and marketing low carbon buildings for the future. The collaborative
approach between Merton and the developer in implementing the
policy has been a great success and they are now planning to build
their second, third and fourth developments in the borough.
What Merton Council has achieved through its
radical 10% renewable energy policy is to demonstrate the power
of local government to combat climate change, while at the same
time driving the renewable energy economy and lowering fuel bills
for residents and businesses.
THEMERTONRULE
10% RENEWABLE ENERGY
POLICY BRIEFING
Background
The "MertonRule" policy was adopted
in October 2003 and is a compelling example of the power of local
government planning to help deliver carbon reduction aims and
ambitions—and has the elegance of being replicable at a
national (and international) level.
Every borough had a policy that "encourages"
the use of renewable energy in new building developments—but
simple encouragement rarely delivers results. By substituting
the word "expect" for "encourage" Merton resolved
this problem. The key justifications and rationales for such a
policy are:
1. To reduce CO2 emissions and
combat climate change.
2. To help the UK to meet its Kyoto domestic
CO2 reduction targets.
3. To help secure national energy supplies
and reduce reliance on foreign imports.
4. To address fuel poverty (an issue likely
to be exacerbated by future pension provision shortfall).
5. Make businesses more competitive by lowering
their monthly energy bills.
6. To expand the renewable and sustainable
energy economy.
7. To raise public, political and corporate
awareness of climate change and effective ways of mitigating it.
SUCCESSFUL IMPLEMENTATION
The policy has now been implemented over 200
times in Merton, Croydon and other boroughs, on a wide range of
building types and sizes including: high and low rise housing,
manufacturing and warehouse units, schools, hotels, office blocks,
supermarkets and leisure centres. The implementation process is
smooth and professional, and the greatest surprise has been the
lack of resistance from developers and house-builders. To date
none has thought it necessary to go to Appeal.
Correcting a misconception: Will it scare developers
away from our borough?
No. The proof of the pudding is in the eating—and
it simply appears not to be the case. On the contrary, the first
developer to meet the policy, Chancerygate, are now coming back
and building their second, third and forth developments in Merton.
If asked about this they will say that as a company they understand
the issues and know that such policies are inevitable—and
indeed to be welcomed, for it gives them an opportunity to "get
ahead of the game" in designing, building and marketing low-carbon
developments. Fairview Homes who built 360 flats in Croydon using
a mix of solar and wind technologies will confirm this mindset.
The MertonRule policy should be seen as an incentive
for developers to build more energy efficient buildings, and to
gently nudge them into adjusting their day-to-day operating systems.
Once this is done then the additional construction costs are less
than 3%. Selling the units at a premium using focussed and sophisticated
marketing strategies can offset this cost.
RENEWABLE ENERGY
ECONOMY
Exponential growth
As we continue to implement the policy on the
ground we are increasingly confident in our projections about
the exponential growth in the renewable energy industry over the
next five years. Our assessment is that for the average borough
will take a mix of water heating technology equating to 5,500
m2 of solar hot water panels, 150 kWp of photovoltaics and 100
wind turbines (composite of different models) to deliver a 10%
policy each year. Not factored into the assessment are: biomass,
biogas, hydro, solar air collectors, geothermal, or cooling technologies.
By the end of 2008, when all boroughs will have
a MertonRule policy, the industry will have grown more than 4,000%
to £1.5 billion annually. To put this in perspective, the
total installed value of renewables in 2003 was only £35
million. This does not include all the jobs created in the other
disciplines and professions such as: architecture, services engineering,
Research and Development, marketing and maintenance etc.
This new industry will be large enough to deserve
being factored into the UK macro-economic framework.
Guaranteed investment returns
One major benefit of this exponential rise is
that it creates guaranteed demand opportunities that companies
can safely invest into. The R&D advances and sheer economies
of scale have already reduced unit prices. A classic example of
this is the Renewable Devices "Swift" wind turbine.
When first marketed several years ago it was hand built in a workshop.
Major investment has now gone into the company and a machine tool
production line set up, with the result that the unit cost has
now fallen to below £2,000. There will soon be a new generation
of vertical axis turbines, with companies like XCO2
investing in state of the art R&D.
Similarly companies investing in the manufacture
and installation of the second and third generation of solar photovoltaics
now have a more secure business plan framework.
Mainstreaming into the existing housing stock
As the MertonRule 10% policy concept has slid
into the mainstream, a supplementary issue is constantly raised—which
is that while the initiative is to be warmly welcomed, it nevertheless
only affects new buildings and doesn't address the vast mass of
existing houses. However, as already alluded to above, this is
perhaps not the case.
Intriguingly the second development forced to
meet the 10% policy opened up a vista to the future. It was a
B&Q superstore and they embraced the policy grasping the long-term
advantages that it presented them from a business perspective.
To meet the 10% they proposed to install a large vertical axis
wind turbine on the front of the building, micro-turbines, solar
thermal and PV panels on the roof, and ground source heat piles
in the foundations.
What was completely unexpected was them wanting
to build a cylindrical glass renewable energy exhibition centre
that customers would have to walk through on their way to the
cafe. When asked why they were doing this they explained that
they intended to sell micro-renewables out of the store—and
true to their word, the first B&Q TV ads for this were aired
during the second week of October.
UK ENERGY STRATEGY:
RAMIFICATIONS AND
NEW PARADIGMS
Planning and Building Regs
An inevitable question asked is, "Wouldn't
all this sort of stuff be better done through the Building Regs.
" The clear answer to this is, no—for five reasons.
First: there is an age old planning profession
adage along the lines of—the Building Regs are there to
guide the wise and control the stupid, but planning is the art
of the possible. Put in this context, the BRs will only ever deliver
a minimum standard, but subtle planning at a local level can achieve
so much more—as has been proved by the MertonRule policy.
Second: Initiatives like the policy create pride
and recognition at a local level. Combating climate change has
to be in collaboration with the public and the local planning
framework requires public consultation in a way that the Building
Regs don't. As such people have a sense of ownership of local
planning.
Third: It fosters healthy competition between
boroughs. There are already examples of boroughs exploring the
possibility of raising the percentage target or lowering the thresholds
in a creditable desire to be green pioneers. Whether or not these
targets are realistically achievable is not the point, what is
is that local planning can fulfil one of the fundamental psychological
aspects of a dynamic enterprise economy—that of ambition.
Forth: It has enthused a new generation of motivated
planners spurring them on to believe that if local authorities
can do something like the MertonRule then maybe there are other
sustainability frontiers they can push at.
Fifth: —and perhaps most importantly:
It preserves initiative, innovation and imagination and at a local
level. It is local ideas that are pushing the sustainablity frontier
and not the "centre". New frontiers can't be explored
from behind a Government policy desk! The role of the "centre"
should be to recognise and support replicable ideas.
CONCLUSION
As far as the 10% policy is concerned it is
an elegantly simple thing that local authorities can do to play
a part in actively combating climate change. It has the added
bonus of not costing them, nor the Government, any money. By being
a prescriptive policy it forces developers and house-builders
to invest in energy efficient design, new technologies and their
own modus operandi. It is an investment that they, and
the country, will ultimately benefit from at a macro level. It
will help deal with fuel poverty (an issue exacerbated by the
twin evils of remorselessly rising fossil fuel bills and pension
provision shortfalls), it will make business and industry more
competitive, and will, of course, play a part in combating climate
change.
October 2006
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