Report of the Deputy Chief Executive and City Treasurer attached

The Executive considered a report of the Deputy Chief Executive and City Treasurer, which provided an update on the progress of the  Council’s proposal to purchase renewable energy supplies via a Power Purchase Agreement (PPA) to ensure the Council had a long term, cost effective supply of renewable energy to meet its energy needs and achieve its Zero Carbon objectives to reduce the Council’s CO2 emissions.

The Executive Member for Environment and Transport reported that a Power Purchase Agreement (PPA) was the direct purchase of renewable energy. Investment in a PPA enabled additional renewable power generation to be created and added to the national grid. The investment in a PPA was traceable directly to specific renewable energy projects such as wind and solar farms across the UK and guaranteed supply of renewable energy over a long-term supply agreement, typically between 5 and 15 years.

In November 2022, officers identified a potentially suitable large scale solar PV facility available for purchase and submitted an initial non-binding offer to the developer.  A report on the potential purchase was made to Executive in January 2023.  However, during the Council’s detailed assessment of the proposition, the Council took the decision to withdraw from this potential purchase as the site did not pass our due diligence thresholds for viability and therefore did not offer a sound investment opportunity for the Council.

Since then, the Council had continued to explore suitable renewable energy supply options considering the available options for an asset purchase, such as a solar farm, or purchase of renewable energy via a Power Purchase Agreement (PPA), taking advice from external advisors.

In purchasing a PPA of this kind, the Council’s commitment to purchase power, gave the power provider certainty of a guaranteed off taker which would help them to fund the construction of an additional renewable energy supply to the grid, thereby reducing the Council’s CO2 emissions for the production of the energy that the Council used to supply its buildings and to charge its electric vehicles etc. The Council had confirmed with its advisors, including the Tyndall Centre for Climate Research, that the purchase of a PPA was a valid, and indeed essential, contribution towards the Council meeting its Zero Carbon 2038 objectives between 2025/26 and 2038.

Currently, the Council’s Energy Management Unit and Procurement colleagues were finalising procurement documents required to establish a new retail electricity supply framework, projected to be in place by September 2023 to replace the now expired previous framework.  It was expected that, unlike the framework this replaced, the new framework would accommodate a single supplier across all lots, so that energy taken from a renewable project could be more easily integrated into the contracts which made up the demand under consideration for this PPA.

The Council intended to seek additional support and advice from its technical consultants and its legal advisors for consideration in establishing this framework agreement.

The Leader sought an assurance that the proposal now being put forward would still enable ethe Council to achieve it sent zero ambitions to which the Deputy Chief Executive and City Treasure assured the Executive that there was no change to the Council’s net zero ambitions and the proposal which was now before Members would still achieve this.

Decision

The Executive note the report