Issue - meetings

Contains commercially confidential information (paragraph 3)

Further to Minute 115 (24 March 2015), the Cabinet Member for Finance, Growth and Investment presented a report on the detailed plans for the creation of a Council-owned Energy Services Company (ESCO), to be known as ‘B&D Energy Limited’.

The Cabinet Member referred to the main aspects and advantages of the ESCO, which were to:

·  catalyse investment and funding for a wide range of energy-related investment opportunities that may not otherwise be available;

·  act as expert project developer and asset manager to optimise the use of existing and new energy assets;

·  assume technical, contract and performance risk related to energy projects and energy services;

·  supply heat, hot water and, subject to regulatory restrictions, electricity to residential and commercial customers;

·  develop community-owned energy enterprises;

·  work with a wide range of external partners to develop schemes, drawing on private sector expertise for the benefit of the Council and community; and

·  compliment the Council’s holistic approach to tackling domestic carbon emissions, fuel poverty and providing affordable warmth.

The Cabinet Member outlined the costs associated with the establishment of the ESCO and the working capital required to support the initial projects under the Barking Town Centre District Heating Scheme, which represented the first of four proposed District Heating Schemes.  The Cabinet Member also clarified the position regarding the interest rate assumptions in the financial modelling and that the ESCO’s operations would not be supported by Government funding.

Cabinet Members spoke in support of the proposals and the Leader commented that B&D Energy Limited would be the largest scheme of its kind across London, supporting the Council’s aim to be recognised as “the Green capital of the Capital”.

Cabinet resolved to:

(i)  Agree the establishment of an Energy Services Company as a Company Limited by Shares, as group holding company for the purposes of producing and supplying low and zero carbon heat, power, energy efficiency and related services to the Council, schools and the community including residential and commercial consumers;

(ii)  Agree that the company be named 'B&D Energy Limited';

(iii)  Agree the establishment of a Special Purpose Vehicle(s) as required by B&D Energy Limited to develop, own and procure the construction, management and maintenance of heat and energy assets on a project by project basis for the purposes of risk management, financing and operational efficiency;

(iv)  Agree the following strategic aim and objectives of B&D Energy Limited:

(a)   The strategic aim of B&D Energy Limited is to develop and deliver the Council’s strategic energy and carbon reduction objectives;

(b)  The objectives of B&D Energy Limited are to:

·  deliver affordable heat, low carbon and renewable energy projects

·  reduce fuel poverty

·  create wider social and economic benefits for the community

·  generate income

(v)  Approve the initial B&D Energy Limited Business Plan at Appendix 1 to the report;

(vi)  Agree that a business plan be submitted to Cabinet for approval by the B&D Energy Limited Board on an annual basis thereafter or such other frequency as  ...  view the full minutes text for item 16