Agenda item

Report of the Head of Economy & Enterprise (EE/16/7) seeking approval to the procurement process for selection with other stakeholders of an Energy Services Company, attached.

Electoral Division(s): All

(Councillors Connett, Julian, Owen and Westlake attended in accordance with Standing Order 25(2) and spoke to this item).

The Cabinet considered the Report of the Head of Economy & Enterprise  (EE/16/7) on the proposed formation of an Energy Service Company (ESCo), in partnership with public sector partners ((Exeter City Council, East Devon District Council, Royal Devon and Exeter Foundation Trust, Teignbridge District Council and University of Exeter) to procure a private sector partner to deliver District Heating Networks in Exeter.

The Cabinet was advised that following its decision in November 2012 to investigate the formation of an ESCo the prospective partners had been working on the feasibility and viability of supplying competitively priced low carbon heat; supported through funding from the Department of Energy and Climate Change (DECC). 

The Head of Service reported that two schemes had been identified within the City of Exeter which were felt to be technically feasible and economically viable, namely a city-wide retrofit scheme connecting primarily public sector heat loads, the RD&E  Hospital to the City Centre and/or a scheme taking heat from the Marsh Barton Energy from Waste plant to the south west of Exeter, details of which were set out more fully in her Report.  The immediate aim of an ESCo would be to procure a private sector partner with which to form a Joint Venture Company to deliver a scheme along the lines outlined in the Head of Service’s Report. 

The Head of Service firmly advised that investment in an ESCo had the potential to enable the Council to achieve a return, deliver economic benefits to the area and work in partnership with public and private sector bodies to influence the development of the Exeter schemes and potential future energy projects across Devon.  Moreover, as the Council would be taking only a relatively small stake in the scheme and was not required to contribute revenues for procurement, the financial risk was relatively low. Shareholder agreements would be set up to ensure any risks were shared appropriately, with ongoing operational risks taken on by the private sector partner delivering the scheme.

The matter having been debated and the options and/or alternatives and other relevant factors (e.g. financial, environmental, risk management, equality and legal considerations and Public Health impact) set out in the Head of Service’s Report and/or referred to above having been considered:

It was MOVED by Councillor Croad, SECONDED by Councillor Clatworthy, and

RESOLVED

(a) that approval be given to the County Council becoming a shareholder of a public sector Energy Services Company (ESCo);

(b) that the County Council commit, subject to a successful procurement of a private sector energy partner, to investing a capital sum of between £147,000 and £177,000 into the joint venture company as a share of the required public sector equity stake, to achieve a return;

(c) that the County Council take the lead in the procurement of an energy sector partner, on behalf of the ESCo, providing an income stream on a full cost recovery basis.

[NB: The Impact Assessment referred to above is available at:  http://new.devon.gov.uk/impact/]