Christoph Harwood - Partner at leading low-carbon finance specialists Marksman Consulting - provided delegates with a talk on the important role that local authorities have in helping to establish local low carbon economies and how this process can be financed.
Mattingly "AI & Prompt Design: The Basics of Prompt Design"
Marksman Consulting: Local authorities and the Financing of the Local Low Carbon Economy
1. Local authorities and the financing of the local
low carbon economy
Southend-on-Sea
March 2014
Christoph Harwood
2. Humber mini-Stern
Humber profile:
• Population of nearly 1 million
• An economy worth £14 billion a year
• Energy bill of £2.5 billion a year (18% of turnover and rising)
Low carbon investment investment of £3.6 billion with 8% return:
• Generate annual savings in energy costs worth £494m
• Generating annual savings for the lifetime of the measures e.g. 25 years
• Deliver 7.1% CO2 reduction above government targets
• Cost effective investments that would pay for themselves (on
commercial terms) over their lifetime, often several times over
Economic benefits
• Would lead (directly and indirectly) to the generation of 3,200 jobs
• Growth in GVA of £150 million per year
• A profitable, self-financing activity that drives growth and resilience
The Economics of Low Carbon Cities; A Mini-Stern Review. Centre for Low Carbon Futures
3. Local Authorities enabling of New Energy finance
Aligning policies De-risking
• Jobs
• Skills
• Fuel poverty
• CO2 reduction targets
• Landfill reduction
• Energy security
• Own estate contracts
• Social housing
• Marketing support
• Planning
• Waste contracts
• Power Purchasing
Agreements (PPAs)
Convening
• Project initiation
• Procurement
• Local initiatives (LEPs etc)
• Community leadership
• Building scale through
aggregation
• Policy and planning
Local
Authorities
• Revenue accounts
• Grants – UK and EU
• Credit enhancements
• Prudential borrowing
• Revenue generation
Enabling finance
4. Funding New Energy activity at a time of budget cuts
Cost centre Revenue earner
Historical position Emerging position
LA funded Access grant funding
DECC funds Energy
company
obligations
Regular income
Energy
savings
Energy
generated
Project fee
income
5. Local authorities and New Energy – from cost to
revenue earner
£ £
Surplus
New Energy
operations
LA capital
• Reserves
• Borrowing
Revenue
Private Sector £££
Retrofit
Renewables
Current focus?
Strategic shift?
6. Local New Energy approach
Commercial
Council
Other public
sector
Community
Non-domestic
Renewables
District
heating
Pipeline
generation LEP
Private sector
finance
Co-finance
Fee
£1b+
Other public
Sector
finance
Framework
procured
Delivery
Partners
Local
installers
Contract LA new energy “fund”
Low Carbon Delivery Unit
LAs
£20-40m
Invest & return
Local authorities do not need to sit back and wait for private sector finance to arrive, as they have the tools available to make it attract them, as well as aligned incentives
