Marksman Consulting: Local authorities and the Financing of the Local Low Carbon Economy
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Local authorities and the financing of the local low carbon economy Southend-on-Sea March 2014 Christoph Harwood
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Transcript of Marksman Consulting: Local authorities and the Financing of the Local Low Carbon Economy
Local authorities and the financing of the local low carbon economy
Southend-on-SeaMarch 2014
Christoph Harwood
Humber mini-Stern
Humber profile:• Population of nearly 1 million• An economy worth £14 billion a year• Energy bill of £2.5 billion a year (18% of turnover and rising)
Low carbon investment investment of £3.6 billion with 8% return:• Generate annual savings in energy costs worth £494m• Generating annual savings for the lifetime of the measures e.g. 25 years• Deliver 7.1% CO2 reduction above government targets• Cost effective investments that would pay for themselves (on
commercial terms) over their lifetime, often several times over
Economic benefits• Would lead (directly and indirectly) to the generation of 3,200 jobs• Growth in GVA of £150 million per year• A profitable, self-financing activity that drives growth and resilience
The Economics of Low Carbon Cities; A Mini-Stern Review. Centre for Low Carbon Futures
Local Authorities enabling of New Energy finance
Aligning policies De-risking
• Jobs• Skills• Fuel poverty• CO2 reduction targets• Landfill reduction• Energy security
• Own estate contracts• Social housing• Marketing support• Planning• Waste contracts• Power Purchasing
Agreements (PPAs)
Convening
• Project initiation• Procurement• Local initiatives (LEPs etc)• Community leadership• Building scale through
aggregation• Policy and planning
Local Authorit ies
• Revenue accounts• Grants – UK and EU• Credit enhancements• Prudential borrowing• Revenue generation
Enabling finance
Funding New Energy activity at a time of budget cuts
Cost centre Revenue earner
Historical posit ion Emerging posit ion
LA funded Access grant funding
DECC funds Energy company obligations
Regular income
Energy savings
Energy generated
Project fee income
Local authorities and New Energy – from cost to revenue earner
£ £
Surplus
New Energy operations
LA capital• Reserves• Borrowing
Revenue
Private Sector £££
Retrofit
Renewables
Current focus?
Strategic shift?
Local New Energy approach
Commercial
Council
Other public sector
Community
Non-domestic
Renewables
Distr ict heating
Pipeline generation LEP
Private sector finance
Co-finance
Fee
£1b+
Other public Sector finance
Framework procured
Delivery Partners
Local installers
Contract LA new energy “fund”
Low Carbon Delivery Unit
LAs
£20-40m
Invest & return
Summary
£20m
£100m paPrivate sector
• Local businesses
• Local jobs
