Elaine Knutt Energy networks, Network Excellence, Interviews, net zero

The months before and after the government’s national-level commitment to pursue net-zero emissions by 2050 has seen a round of target-setting by other administrations and cities: Scotland’s target is net-zero by 2045, with Edinburgh and Glasgow racing to get there first; Leeds and Manchester are both aiming for 2038.

In November 2018, Bristol City Council declared a “climate emergency” and committed itself to a not-so-distant ambition to make the city carbon-neutral by 2030. But as well as using its procurement power to shrink suppliers’ and contractors’ carbon emissions, Bristol wants to take active control of its own energy future. Its “City Leap” project has seen it draw up a £1bn wish-list of low or zero-carbon project goals (see table, page 20), and it is now selecting a “strategic partner” consortium to deliver them.

City Leap – the name highlighting that this is not an incremental, softly-softly process – takes in a £300m expansion to the city’s existing municipal district heat networks; solar and wind power projects; developing a local “hydrogen economy” and investing in a city-wide electric vehicle charging network.

But, as befits a city with a history of community activism, City Leap is also about energy equity, with a key focus on reducing fuel poverty across the city and engaging community groups in small scale, localised distributed energy projects – such as battery storage sites or heat pumps.

The City Council is currently assessing bids from commercial consortia to become its strategic partner, and hopes to make an appointment in 2020. The project is also being supported by the University of Bristol, University of the West of England, Western Power Distribution, and agencies such as Invest Bristol and Bath and the Bristol Green Capital Partnership.

There are no templates for City Leap, but Bristol certainly hopes it can create one for other cities and local authorities. According to councillor Kye Dudd, the city’s cabinet member for energy and transport and lead on its “Green New Deal”, neighbouring local authorities are interested in becoming involved, such as Bath and North East Somerset, South Gloucestershire Council and North Somerset Council, and others further afield are watching.

“The reality is we’re under pressure and facing a climate emergency. We want to decarbonise by 2030 in an environment where the government has not stepped up. So we could plod along, finding £1m here or £5m there, but the aim of City Leap is to enable a massive jump in what we can do where the council can’t act alone,” says Dudd, who represents Labour on the council.

Share and share alike

Bristol is pursuing a model whereby the council will own 50% of the shares in the new venture, after transferring ownership of its current green energy assets to the new vehicle.

“The council will put all its energy assets into the partnership, including the [council-owned] district heat networks and solar and wind assets,” says Dudd. “Considering the amount of energy infrastructure in Bristol, the council owns hardly anything, but via the joint venture we will gain a stake.”

The “strategic partner” is likely to be formed from energy specialists, construction experts and a bank or investment broker to channel the increasing volume of institutional funding looking to invest in green energy investment opportunities. It will have share capital of matching value in the joint venture. “The JV will be able to do the ‘heavy lifting’ in terms of investment as the council certainly doesn’t have £1bn to invest,” says Dudd.

In setting up a 50:50 joint venture company with a partner consortium, Bristol is striking out in a direction no other UK city has adopted, putting Bristol closer in line with traditions in mainland European cities, where there is both a pattern of co-ownership of energy assets with energy companies, and a commitment to district heating.

Bristol is twinned with the German city of Hannover, for example, where assets are owned by municipal energy company Stadtwerke Hannover, which traces its roots back to 1891. District heat networks are also the default in Scandinavia. “If you go to Copenhagen, most people get their heat from district heating systems,” says Dudd.

Prospecting for a partner

Last August, Bristol City Council issued a prospectus detailing local opportunities and sought expressions of interest from the market. It was then swamped by 180 responses that arrived from across Europe, the Far East and China. “We were overwhelmed – we then had to work out the best way to take it forward and at the same time protect Bristol’s interests.”

It resolved that the best way forward was to seek a “strategic partner”, avoiding a situation where different parties own various minority stakes in a joint venture company, and could then decide that their interests lie in different directions.

This article first appeared in Network magazine, which has now been incorporated into Utility Week

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