Environmental Services and Sustainability Portfolio

(Exempt Paragraph 3)

To consider report HPS/15 of the Head of Major Projects and Commercial Services, which was referred to the meeting of the Overview and Scrutiny Commission held on 29 October 2018.

The Leader presented report HPS/15 of the Head of Major Projects and Commercial Services which sort approval of the business case to progress with Phase 1 of the town centre District Heat Network (DHN) and sort in principle agreement to establish an Energy Services Company (ESCo) to adopt the Energy Centre and Heat Network and take on responsibility for operations, maintenance, billing and customer service.

Councillor T. Belben presented the Overview and Scrutiny Commission’s comments on the report to the Cabinet following consideration of the matter at its meeting on 29 October 2018. The Commission confirmed its support in principle for the DHN along with the other recommendations that the Cabinet were considering.

Councillors P. Smith, Skudder, B. Smith and Thomas also spoke on this item during the Cabinet discussion on the proposal.

RESOLVED

That the Cabinet

1.            notes the DHN Business Case as set out in paragraph 4.9 and 4.10 of report HPS/15 and confirms support for Appendix 1 of report HPS/15.

2.            notes the projected financial implications for Phase 2 expansion of the DHN and that future expansion will be subject to a further report to Cabinet, once the capital costs and customer and commercial negotiations have progressed.

3.            approves in principle the proposal to establish an Energy Services Company (ESCo), subject to a further Cabinet report detailing the commercial and governance arrangements under which the ESCo would be established.

That Full Council be recommended to

agree to progress with Phase 1 of the project and approve the budget for Phase 1 of the scheme, broken down as follows:

i)          Approve a total budget and funding for the scheme as shown in paragraph 4.9 of report HPS/15. 

ii)         Approve a virement from the K2 Crawley Combined Heat and Power (CHP) project, as outlined in paragraph 4.9 report HPS/15.

Reasons for the Recommendations

The scheme would bring the following benefits:

·                Compliance with Crawley planning policy: Crawley Borough Council’s Local Plan Policy ENV7 (‘District Energy Networks’) requires any development located within a district energy network priority zone (this includes the town centre) to connect to a network where one exists. Given the proposed programme of new residential development in the town centre, progressing a DHN now will enable the economic and carbon benefits to be secured from these schemes.

·                Carbon Reduction: Crawley Borough Council’s Carbon and Waste Reduction Strategy (2012) commits the Council to being carbon neutral by 2050. The council met its initial 20% reduction within 5 years target one year early and now aims to reduce its emissions by another 20% by 2020. The town centre DHN will play a significant part in achieving both of these goals.

·                Income stream to the Council: Council funding to the scheme would achieve an income of 5% per annum for the 40 year duration of the project.