ERDF PA4 Supporting the shift towards a low carbon economy in all sectors Richard Kirkland D2N2 ESIF Coordinator

Purpose of the Presentation To give an overview of the ERDF Priority Axis 4 programme To give an overview of the ERDF application process To explain the governance and partnership arrangements involved in managing and delivering the programme To explain the ‘route to market’ for projects To give an opportunity to seek further clarification and network

Basics for ERDF Minimum project value £1 million and should be for a maximum of 3 years Intervention rate is 50% - £500,000 match Calls timetables determined by DCLG and LEP ESIF sub committees Applications need to clearly demonstrate how activity meets PA requirement and contributes to delivery outputs Meets local need as set out in LEP ESIF strategies

Required Outputs for PA4  C1 – Number of enterprises receiving support  C5 – Number of new enterprises supported  C 26 – Number of enterprises cooperating with research institutions  C29 – Number of enterprises supported to introduce new to the firm products  C30 – additional capacity of renewable energy production  C31 – Number of households with improved energy consumption  C32 – Decrease of annual primary energy consumption of public buildings  C43 – Estimated greenhouse gas reductions

ESIF in D2N2  A local ESIF strategy for ; £98m ERDF (European Regional Development Fund):  Supporting business, particularly SMEs £98m ESF (European Social Fund)  Supporting people with employment and skills £5.3m EAFRD (European Agricultural Fund for Rural Development)  Supporting economic growth in rural areas  Bring partners together to oversee’ implementation and spend through its ESIF Programme Board

D2N2 ESIF Role Localism Lead role for LEPs – 7 year ESIF allocations  Bring local partners together to ‘oversee’ implementation – D2N2 ESIF Committee  Develop and agree local ESIF strategy and Implementation Plan with partners  Agree ‘best’ projects with UK Government  Monitor project delivery against strategy and programme priorities  Local programmes which are best fit for D2N2

D2N2 ERD Funding by Priority Axis  PA1 Innovation - £18.2m  PA2 ICT - £12.3m  PA3 – SME competitiveness - £34.8m  PA4 – Low Carbon - £22.6m  PA5 – Climate change - £4.9m  PA6 – Environment / Resource efficiency - £4.7m  Nationally low take up for PA4 and PA6  Issues around clarity of eligibility and quality of applications submitted

D2N2 Targets and Progress Targets which must be met within this programme  N+3 targets measured annually from 2018 across the whole programme  Performance target financial – measured in 2018 and 2023 across programme and by PA level  Performance targets non financial – measured in 2018 and 2023 across programme and by PA level

D2N2 Key Challenges  Huge demand for PA3 in D2N2 and nationally  General lack of match funding at required levels for this programme  Ensuring delivery against performance targets with the first milestone in 2018  Changes to exchange rate  Pressure therefore in developing high quality proposals that meet these challenges

PA4: Investment Priorities  4a – Promoting the production and distribution of energy from renewable sources  4b – Promoting energy efficiency and renewable energy use in SMEs  4c – Supporting energy efficiency, smart energy management and renewable energy use in public sector property and the housing sector  4e – Promoting low carbon strategies for all types of territories, in particular urban areas, including the promotion of sustainable multimodal urban mobility and mitigation – relevant adaption measures  4f – Promoting research and innovation in, and adoption of low carbon technologies

4a:Indicative actions Objective – to increase the number of small scale renewable energy schemes in England  Measures to support increased production of renewable fuels and energy – wind, solar, biomass  Support to build capacity for supply chains in renewable energy  Demonstration and deployment of renewable energy technologies  Wider deployment of renewable heat – geothermal, heat networks, district heating, biomass systems etc

4a:Issues  Activity should take place within context of national and local low carbon strategies - LEP, individual LA strategies  Need to demonstrate how project will support UK renewable energy road map, Focus on microgeneration not large scale projects – heat pumps, biomass, heat networks etc.  Is there an innovative approach to projects using appropriate technology?  If applications come from rural organisations and contain biomass need to show demarcation with EAFRD  Need to be mindful of the income generation within parameters of Article 61

4b:Indicative actions Objective – to increase energy efficiency in particular in SMEs including through the implementation of low carbon technologies  Advice and support to promote innovation in businesses to deliver best practice in energy management to improve competitiveness  Support for green diagnostics / audits and production of tailored energy plans  Investing in energy efficiency measures, processes and renewable generation capacity to improve a business’ environmental performance or its resilience to the impacts of climate change

4b:Issues  Main focus is energy efficiency not resource efficiency  Deep renovation should be supported via other funding mechanisms e.g. FI  Can provide revenue and capital but applications need to provide rigorous evidence through robust diagnostics  Match can come from SME’s – doesn’t need to be underwritten

4c:Indicative actions Objective – energy efficiency in homes and public buildings, including through the implementation of low carbon technologies  Provision of advice and support to increase the use and take up of low carbon technologies, energy efficiency measures, renewable energy technologies and smart energy systems in housing stock and public buildings  Investing in domestic energy efficiency, renewable energy and smart construction techniques  Investment in the development and wider use of Energy Performance Contracting in the public buildings and housing sectors

4c:Issues  Focus on demonstration not mass roll out  Standard retrofit is not eligible  Can provide option for Passive House development  Can be processes, materials, technology that is innovative  No definition for what a public building is – assessed on case by case basis with focus on innovation not ‘public sector’

4e:Indicative actions Objective – Increase implementation of whole place carbon solutions and decentralised energy measures  investments in local/regional smart grid demonstration projects, including validation and solving system integration issues  sustainable energy action plans for urban areas, including public lighting systems, smart metering and distribution through smart grids  Investments in combined heat and power from renewable sources  Investments to encourage the adoption of renewable

4e:Issues  Focus is whole place solutions which supports the delivery of a the low carbon strategy and bench marked against 2011 local authority data  Aims to bring together a range of activities – transport, energy, Green Infrastructure etc within a geographically defined area  Support delivery of local opportunities utilising funding allocated to support transport improvements e.g. business parks, market towns, university campuses  Key issue is are there funds out there which can be used as match to develop whole place solutions

4f:Indicative actions Objective – Increase innovation in and adoption of low carbon technologies  Research and Development, innovation and supply chain work for low carbon technologies and materials, including, wave and wind energy, smart grids, distributed generation, solar and photovoltaics, heat networks, heat pumps and low carbon heat for energy intensive industries  Technology centres of excellence and test facilities, including relevant Catapult centres  Knowledge transfer with Higher Education/Further Education institutions and Businesses  Supporting low carbon tech start-ups and greater commercialisation of low carbon products and processes

4f:Issues  Focus on knowledge transfer  Needs to be consistent with national and local smart specialisation strategies and plans  Technology should meet the national Low Carbon Innovation Coordination Group requirements  Potential for local authorities to work with DECC Heat Networks Delivery Unit and use their funding as match - £300m as part of the Heat Networks Investment Project  for HNDU is

Key issues from last PA4 call  Minimum £1m projects required  Finance and nature of match i.e. what is eligible.  Resources to pull together projects  State aid rules and interpretation  SME inertia – cant see ROI  Ineligible activity e.g. retrofit  Lack of alignment with D2N2 ESIF strategy and Core delivery principles

Route to the ERDF programme  For ERDF the route into the Programme is via “Calls” published on the Funding Finder at  Specifically for ERDF investment-funds  PA4 Guidance Advice tachment_data/file/495402/ESIF-GN _ERDF_Prioirty_Axis_4_Guidance_v2.pdf

Core Delivery Principles ‘What good looks like’  Impact and Scale:  Delivery Readiness:  Added Value  Local Value  Quality, Performance and Efficiency:.  Strategic Partnerships and Co-ordination of Market Engagement  Flexibility and Responsiveness

Outline Application against Call Specification Local Implementat ion Plan (Scope and Timing of Calls Full Application Publish Call Funding Agreement Applicant Managing Authority Promote and Publicise Call Assess Application against ESIF, call specification and Prioritise Assess Outline (Gateway & Core Selection Criteria) Full Technical Appraisal (Core Selection Criteria) Assess Full application and review technical appraisal against ESIF and prioritise LEP ESIF Programme Board ESIF Strategies (set out local strategic priorities) Call Specificatio n ERDF / ESF Operational Programmes Selection into Programm e Discuss and endorse selection European Structural & Investment Fund Open Route Inception to Funding Agreement (excluding Opt-Ins, Fis, SUDS)

Questions and Contact details Richard Kirkland ESIF Co-ordinator D2N2 Local Enterprise Partnership ) Mobile)