London - London Green Fund (LGF)

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Challenges

London is a densely populated city and faces significant challenges in the future as projected economic and population growth exerts further pressure. The Mayor of London has set a target to cut CO2 emissions by 60% by 2025 and targets to reduce waste to landfill and increase energy supplied from decentralised systems. It will cost $63 billion to deliver this target. This level of funding cannot be provided only by the public sector, but imperfect market conditions make projects addressing climate change prohibitively risky investments for the private sector.

Actions

Since 2012, the LGF has invested in 16 energy efficiency, district energy and waste infrastructure schemes, including: anaerobic digestion, energy-from-waste and plastics reprocessing facilities; energy conservation measures such as boiler replacement photovoltaic cells, waste heat recovery, lighting upgrades and controls and wall insulation. These schemes are at different stages of implementation and once all are completed the combined results will be:
 

  • 35% energy saving (34.7million kWh p.a.), compared to business as usual; 
  • 218,084 tonnes/annum of CO2 reduction;
  • 330,980 tonnes/annum of waste diverted from landfill (thereby reducing new resource use); 
  • 3MW of electricity from anaerobic digestion; 49MW from energy-for-waste; 9MW from CHP.

The LGF is part of a comprehensive climate change action plan put in place by the Mayor of London and will contribute to key environmental targets in this plan including: 

  • reduce CO2 by 60% of 1990 levels (45.05MtCO2) by 2025; 
  • 25% of London's energy coming from district energy sources by 2025; 
  • zero municipal waste direct to landfill by 2025.

Projected Outcomes

In addition to the environmental goals, this funding approach can deliver a number of wider socio-economic benefits (e.g. green jobs, reducing fuel poverty and stimulating complementary regeneration activities) and encourage the development of a low carbon economy (e.g. by creating/increasing specialisms in areas such finance and consultancy).

The LGF is expected to achieve a number of wider socioeconomic impacts such as: 

  • Reducing fuel poverty, through its investment in energy efficiency measures for social housing that will lower energy costs for low-income citizens. Over 2,000 social housing properties will benefit from energy conservation measures.

 

  • Realising energy-savings that will provide indirect monetary benefits through lower utility bills: $6.9million in financial savings are expected from these measures;

 

  • Tackling inequalities by delivering essential and innovative environmental improvements as part of a wider package of regeneration activity in areas to reverse trends of deprivation. The European Investment Bank has made available $780million to invest alongside the LGF in complementary regeneration and environmental schemes.