The report of the Strategic Director, Corporate Services (Document “Z”) sets out the progress made towards achieving the councils ambition to develop a City Centre based District Energy Network supplying low carbon heat and electricity on commercial terms to City Centre civic buildings, other public sector buildings and commercial properties.

Recommended –

That Members note the progress made on development of the scheme and its technical scope.

Neill Morrison – 01274 434003

The report of the Strategic Director, Corporate Services (Document “Z”) set out the progress made towards achieving the Council’s ambition to develop a City Centre based District Energy Network supplying low carbon heat and electricity on commercial terms to City Centre civic buildings, other public sector buildings and commercial properties.

The Assistant Director, Estates and Property and the Energy Team Manager were both in attendance and gave a synopsis of the report. They explained that the report summarised the progress made so far, changes to the network from the initial proposals with next steps and likely delivery timelines.

District Heat Networks (DHN) offered an opportunity to create significant new long term secure income streams and to contribute towards corporate cost reductions.

In 2010, Bradford Council agreed to reduce its carbon emissions from its own activities and for the District by 40% by 2020. The Council also agreed a target of 20% for energy for delivery of its own functions to come from renewable sources (Council March 2010). Then Executive considered a Renewable Energy report on 3rd May 2013. This presented a discussion of the Link Member Report Bradford Power 2020 and Beyond, Renewables Future for Bradford Council and set out the Councils approach to deploying a range of renewable electricity and heat projects. The Report set out progress to date on a number of renewable technology projects deployed across Council assets and includes the case for use of biomass systems. Executive endorsed this approach.

Following introduction, a question and answer session ensued:

·         The report lacked a considerable update on risk management and feasibility within the report?

o   Since information on risk and feasibility had been produced in a report and presented to the Committee in January 2018, there had been no changes to reviews;

·         Was the proposed scheme considered the best to reduce the district’s carbon emissions?

o   This was correct. The scheme would not only reduce carbon emissions but equally save a considerable amount of money;

·         Had there been any form of contribution in terms of support or financial assistance by the Combined Authority who had provided a strategy to become zero carbon?

o   The Council had received in the region of £60,000;

·         Had a company from the list of Modelled Connections (Companies), as highlighted in Appendix 2, agreed to sign up to the Council’s energy supply?

o   A feasibility check had been undertaken and it was shown that all the companies were interested in the scheme however, at present it was about agreeing the Heads of Terms with companies finally making commitments;

·         Was the district’s heat power a combined one?

o   Yes. The purpose of a Combined Heat and Power (CHP) also known as Cogeneration was the use of a single piece of plant to generate both heat and electricity. In conventional power generation large quantities of energy in the form of heat were wasted but, by using Cogeneration technique, the total energy conversion efficiency was reaching maximum levels of heat with minimum loss;

·         The report highlighted the full capital cost of scheme being £11.6 million and 30% of the total cost being funded by The Department for Business, Energy and Industrial Strategy, and the balance of the funding may be obtained entirely from third parties dependent upon the ultimate delivery model selected. What would be the implications, if the remaining balance was not met by third parties?

o   Without third parties, the scheme would not be financially viable for the district;

·         With half of businesses listed on Appendix 2 not occupying Council owned buildings including the ever increasing number of changes of businesses and premises, how was the Council certain that after the Terms of Reference were agreed that companies would in fact commit?

o   There was a significant amount of on going campaigning on a district and regional level as the Council had the latest information relating to the reduction of emissions due to government identifying that District Heat Networks were a significant contributor to reducing Greenhouse Gas emissions and as a component in the transition to low carbon energy.  The Department for Business, Energy and Industrial Strategy was playing a key role and making financial and technical resources available to support project developments in cities and towns;

·         What was the feedback of Stakeholders?

o   Some discussion had taken place with Stakeholders but not in great detail. Following further analysis of the scheme and having undertaken full discussions with Stakeholders, a further report would be presented;

·         Had the it been considered to manage the project through an external energy company?

o   This was dependent on the Council’s appetite for future business;

·         What was the total cost of the scheme?

o   £11.6 million; and,

·         If successful, was there the potential for expansion into other areas associated with the reduction of carbon footprints?

o   There were options to expand into different projects associated with energy through the initiation of new connections.

Resolved –

(1)       That Members expressed concern at the limited progress made on      the development of the scheme.

(2)       That the full outline business case be presented to the committee         in September 2019.

ACTION: Strategic Director, Corporate Services