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The Topic: Funding decarbonisation FUNDING DECARBONISATION THE TOPIC 12 | 16TH - 22ND SEPTEMBER 2016 | UTILITY WEEK The water sector's efforts to cut carbon The water sector accounts for a big percentage of the UK's total energy consumption, so decarbonisation makes environmental and commercial sense. T he water industry is one of the most energy-intensive industries in the UK, and its energy use continues to rise as it battles with tougher environmental stand- ards and a growing population. Thus, water companies must find ways of decarbonising their processes for pumping, water treatment and waste management. Renewable energy and resource effi- ciency are vital tools in the battle to cut carbon emissions, at the same time as sav- ing companies money and lowering bills for consumers. The largest renewable energy investment for the water, and specifically the waste- water, sector is in combined heat and power (CHP) and generating biogas from the anaer- obic digestion of sludge – a solid by-product of the sewage treatment process. But compa- nies are also investing in producing energy from hydro, solar and wind. Many water companies have decided to increase renewable energy generation to off- set the impacts of increased energy prices, to use their resources, such as sludge, as effi- ciently as possible, and to increase revenue through mechanisms such as the Renewa- bles Obligation. It is in this way that the water sector is making a substantial contribution to the gov- ernment's requirement of 15 per cent of the UK's energy consumption being generated from renewable sources by 2020. The industry says it is committed, and will continue to explore opportunities to use its resources as efficiently as possible. Here are some examples of what water companies are doing to decarbonise. Anglian Water Between 2005 and 2015, Anglian Water invested £230 million to enhance the treat- ment process at nine of its largest water recycling centres, allowing them to produce renewable energy from sludge. As part of wider investment plans for 2016/17, Anglian is investing £2.4 million in sludge and CHP plants – including Col- chester, Cambridge, Corby, Great Billing and King's Lynn – to ensure that renewable 15% – the UK has a target to source 15% of energy consumption from renewables by 2020. 0.7% – GHG emissions from water operations make up 0.7% of overall UK emissions. 4,000 kilotons of carbon dioxide produced by UK water sector in 2014/15. £2.4m – Anglian Water's 2016/17 investment in producing energy from sludge. £190m – Severn Trent's planned investment in renewables 2015-20. 100% – Thames signed a deal with Haven Power to supply it with 100% renewable energy. £3.5m – United Utilities' investment in Europe's largest floating solar farm. KEY NUMBERS In November last year, nearly 200 countries agreed a single, global deal to tackle climate change for the first time. This deal went far beyond the 1997 Kyoto Protocol, which set emissions reductions tar- gets for only a handful of developed nations before the US pulled out and targets were subsequently missed by others. The Paris climate agreement sets out: • Keeping global temperatures "well below" 2C above pre-industrial times and "endeavour to limit" them to 1.5C. • Limiting the amount of greenhouse gases emitted by human activity to the same levels that trees, soil and oceans can absorb naturally at some point between 2050 and 2100. • Holding a five-year review of each coun- try's contribution to cutting emissions. • That rich countries help poorer nations by providing $100 billion of climate finance a year to support low-carbon growth and climate resilience in developing countries. On 4 September, both the US and China, the biggest greenhouse gas emitters, ratified the Paris climate change agreement ahead of the G20 meeting in Hangzhou. The government must introduce an incentive structure for hydropower and give it access to public funds, to encourage more projects to be built, developer Barn Energy has insisted. The company, currently developing a hydropower scheme in Kirkthorpe on the largest weir in Yorkshire, said it wanted an incentive structure for the "long-term deliv- ery of renewable energy", and more funds to enable other projects to go ahead. Barn Energy chief executive Mark Simon told Utility Week: "We would like recognition of the fact that these are very large civil engi- neering projects that have very much longer lifetimes and larger yields than other renew- ables like solar or wind. "We would like an incentive structure that rewards such long-term delivery of renew- able energy… but also that gives us access to public funds to get low-cost money for a long period that will enable such projects," he said. Cuts to the government feed-in-tariff scheme have made new hydropower projects difficult to finance because the government aims to cap spending on feed-in tariffs at £75 million to £100 million from 2016 to 2018/19. COP21 summary The international community builds on Kyoto Hydropower Public funds needed, insists Barn Energy