Decision details

This report seeks approval for the principle of entering the local energy market to create a Council backed energy tariff in order to gain a range of community benefits.

The Cabinet Members agree to:

• Approve the principle of commissioning a partner to create a Council endorsed local energy tariff offer for electricity and gas in order to gain a range of community benefits.

·  Note that there will be a further report to Cabinet prior to contract award, having tested the business plan and marketing approach through the procurement process.

A B&NES local energy supply model has the potential to contribute to a longer term vision of making the district more energy resilient and independent, and offers the following benefits to B&NES district:

• Reduced energy costs for residents, helping to alleviate the impact of local fuel poverty, improving health and wellbeing. Assuming an uptake of 3,000 households per year, the value of the energy savings delivered for our local residents would be up to £4.5 million after 5 years.
• Retention of a greater proportion of the region’s c.£153m electricity and gas expenditure within the local economy,
• Better return for local renewable energy generators, by enabling better matching between local generation and demand, increasing investment and jobs potential, and helping deliver our Core Strategy renewable energy target,
• Reduced carbon emissions in our area,
• Improved community resilience in the face of future energy price shocks and rising trends in energy bills,
• Support for the transition to a low-energy, efficient and competitive local economy, and enable a platform for the future integration of smart grid and new low energy technologies,
• Cost recovery for the Council for marketing and contract management costs.

The social, economic and environmental benefits of the local tariff project will contribute to the delivery of the following Council strategies and objectives:

• B&NES Vision 2020 and Corporate Strategy themes ‘Creating the Future’ and ‘A Focus on Prevention’ and the administration’s manifesto focus on ‘cleaner, greener and healthier communities’.
• Joint Health and Wellbeing Strategy – particularly Theme 1 ‘Preventing ill health by helping people to stay healthy’ and Priority 4 to ‘create healthy and sustainable places’.
• Economic Strategy – through local retention of economic benefit.
• Core Strategy – particularly the commitment to reduce carbon emissions and Core Strategy target CP3 on renewable energy (275MW renewable heat and electricity generation by 2029).
• Environmental Sustainability Partnership (ESP) Strategy – particularly the commitment to provide the leadership for a 45% cut in district wide CO₂ emissions and to support local energy generation.
• Community Energy Strategy – particularly the delivery of the aim to accelerate growth of renewable energy and energy efficiency improvements across the district, whilst delivering maximum local economic and social benefit.
• Think Local Procurement Strategy – particularly the principle that ‘We will prioritise Social Value for our community. This means targeting opportunities for the local economy, providing for a sustainable future and supporting the vulnerable’.

• Collective Switching Campaign – however, this offers less opportunity to tailor the offering to local needs, and typically offers minimal benefit to households on pre-payment meters.  Switching campaigns have been considered but rejected previously by B&NES Council for these reasons.
• Becoming a licensed energy supplier – however, this option would require substantial investment and exposes the Council to considerable financial risk, which the Energy Services Study (conducted as part of the Council’s Strategic Review) concluded was inappropriate for a Council the size of B&NES.
• Do nothing – however, this option misses opportunities to deliver significant local benefit and was not considered consistent with current strategies. 

·  Oil heating – the option to extend this scheme to include heating oil was considered, but since the heating oil market operates separately from the electricity and gas supply markets (involving different companies and regulatory regime) a separate procurement process would be required.