Agenda item

For the committee to review the opportunity to enter into negotiations with the Low Carbon Hub and other Oxfordshire Councils on a potential Power Purchase Agreement. To make recommendations to Cabinet.

Corporate energy officer introduced the report to the committee.

The paper is for the committee’s consideration. A Power Purchase Agreement, or PPA, could be an element, along with a broad portfolio of projects, to help achieve the council’s carbon neutral target.

The first priority, from our climate emergency one-year work programme, is that we will aim to reduce energy use from our operations, and to install renewable technologies on site. These actions alone are unlikely to bring our carbon emissions to zero, so further options need to be considered. A PPA is a mechanism for matching zero carbon electricity generation at a new renewable energy asset with the council’s energy use. It then allows us to declare zero carbon emissions for the contracted energy. If a new renewable energy asset is in South Oxfordshire, this also has additional local benefits. We therefore wish to enter into discussions with other Oxfordshire Councils and other external parties to identify the opportunities available.

As written in the report, there will be a range of financial and procurement issues to resolve, so no commitment has been made yet.

There is no conflict between these proposals and the parallel process of procuring gas and electricity for the council’s properties.

We realise this is a complex proposal, and we have set out the key issues in the paper, and we welcome questions at this stage.

The committee discussed PPA as follows:

• The committee were informed that the purpose of PPA was to be contracted with a new generator. Buying from an electricity company’s green tariff, would not be sufficient to claim zero carbon emissions. Direct from a new generator stimulates new generation of sources of zero carbon electricity.
• The generator will be brand new and we are the only buyer, therefore we are the only consumer who can claim the zero carbon benefits. The generator is not a consumer.
• The committee wanted to understand the implications of negotiations with a mainstream energy supplier (sleeving) and what happens if they want to leave. It was confirmed that the long term agreement is with the generator , not the energy supplier. We are awaiting further guidance, but would expect to be able to  sleeve with other energy suppliers over time for their service.
• Leisure centres are 70% of council emissions, but Covid-19 affects this. Officers will work closely with the leisure manager, who is responsible for future plans for the leisure centres. At present the contractor manages leisure centre bills.
• Uncertainty – closures, working from home, Covid-19 – versus a 15-year contract. The council is aiming to reduce energy use, but we will be moving away from gas and replacing it with electricity, so there will also be new demand. We can learn from other councils who have already done this.
• If there is a restructure in local government, there will be plans in place to handle existing contracts.
• Discussion was had regarding the potential use of windfarms and dual use land. The idea of solar panels and roof insulation on leisure centres – this continues to be a high priority in our work programmeThis project is in its infancy and there are parallel projects being explored, such as investment in solar farms as a way of revenue generation.
• We are currently not a big enough energy user to look at a PPA and investment together.

The comments made will be considered by officers at this early stage, no negotiations have taken place yet.

RECOMMENDATION:

That the Committee recommends to Cabinet that officers join discussions with other Oxfordshire councils and commercial partners to identify the feasibility of entering into a Power Purchase Agreement.