21 Oct 2019
Mobilising Local Energy Investment (MLEI) is a project to attract more renewable energy investment into Cambridgeshire.
The project has created a team of renewable-energy specialists who are making the best of the council’s assets (houses, roads, schools and community buildings) to reduce carbon emissions and environmental impacts.
Success stories include a roll out of solar panels and eco heating to schools – as well as millions of pounds spent on energy efficiency and a new solar farm.
Securing government grants was essential to getting the project off the ground. The exciting news is that MLEI has outlived the grants – with loans and, more significantly, profits from the programme being reinvested into larger projects.
We believe that our Climate Action Groups can use Cambridgeshire’s example to get their own councils on board and help the UK meet its climate targets.
Low-carbon energy pioneers
In July 2018 Cambridgeshire County Council won the British Renewable Energy Awards’ pioneer category for 'an organisation in a sector not previously associated with renewables that has now become involved and created a pathway that others can follow'.
Lead Judge Catherine Mitchell, Professor of Energy Policy, University of Exeter said:
"Judges were very impressed with the Cambridgeshire County Council entry. Their submission clearly demonstrated how their expert knowledge is being shared with other local authority areas for wider societal benefit.”
So, how had Cambridgeshire County Council become low-carbon energy pioneers? The answer is a huge shake-up in financing infrastructure.
The council’s focus on energy investment has seen more than £20m of investments go into energy generation and energy efficiency on the County Council’s property.
Sites include 55 schools and some corporate buildings being fitted with solar and biomass boilers, and a new 12MW solar farm at Soham.
The council's aim is to make a low-carbon energy future a priority, especially as the expansion of electric vehicles comes on stream and the electrification of heating for its buildings.
Wireless technology will help facilitate the change as it will support smart controls on buildings and the energy system and a grid that works smartly and efficiently.
Pushing this low-carbon energy framework forward is a team set up by the council to make “best use of council’s assets to reduce carbon emissions and environmental impacts” – as stated on its Mobilising Local Energy Investment (MLEI) website.
Talking to the team it’s clear they are determined to do the right thing and know how to do it too. Yet, to date their successes are perhaps not as well-known as they deserve to be.
There’s a reason for that says Project Director for the Energy Investment Unit, Sheryl French:
“The most important thing for climate change is that we are putting in the projects that reduce our CO2 emissions. If you spend all the time promoting, then you’re not investing on the ground. Getting the balance right between doing the job and promoting is a fine line.”
The start of the project
The council’s low-carbon energy success began in 2008 – 7 years before the Paris Climate talks (COP21) in 2015.
“Cambridgeshire is a growing county. We have a globally recognised cluster of bio-med sciences on the southern fringe of Cambridge,” says Sheryl French “and Cambridge University’s strength in technology development, means it is an area with a lot of entrepreneurs.”
“In 2008, 78,000 homes across Cambridgeshire were planned with a big proportion in the greater Cambridge area. The challenge delivering this many new homes is how to plan their delivery while minimising the carbon footprint.
“My first job was to look at the long-term delivery plan for 2030 which includes roads, schools and community buildings and carry out a carbon appraisal (in 2008). The results of this work were taken seriously by the politicians,” she explains.
“For example there was strong support to scope a carbon-offset fund and the technical capacity of Cambridgeshire to generate its own renewable energy to decarbonise its growth.”
At the time French was working with the not-for-profit Cambridgeshire Horizons – a delivery partnership vehicle of all the local authorities plus Cambridge University which was funded through Housing Growth Fund (a government grant).
In 2012 Cambridgeshire Horizons closed down and French moved back into Cambridgeshire County Council. There she submitted a bid to Intelligent Energy Europe to secure a £1.2 million grant for the Mobilising Localised Energy Investment (MLEI) project for 3 years.
“The grant was to fund revenue costs, to build the skills and capacities of council staff to develop and finance energy infrastructure. It allowed the county council to become knowledgeable about developing energy projects and understand the financing and contractual requirements.
The Intelligent Energy Europe Funded project was required to “set up an investment fund, procure delivery mechanisms and secure investment of 17 million euros into contracts on energy projects,” explains French.
“Three years might sound a long time, but this was very challenging. For example, we had to scope projects and take them through to investment grade proposal whilst also running procurements to secure the engineering design skills.
“As not many local authorities had undertaken energy projects at scale, we had to set up clear pathways to achieve this and ensure our politicians understood and supported what we were doing.”
Thanks to supportive councillors, a £30 million loan facility was set up to invest in energy projects. Initially this covered schools, both maintained and academies, plus a solar farm. It has now extended to cover battery storage and smart-grid development too.
To invest in energy projects, the council accessed the Public Works Loan Board to borrow finance for projects.
How to grow renewable capacity
The process in a snapshot:
- With the grant: project delivered, set up investment fund, set up procurement and started investing in projects.
- Post grant: profits used to fund the team, more and bigger projects developed.
Crucially the scheme organised for the continuation of the MLEI work. French explains how this was done:
“The Intelligent Energy grant covered the costs of the team and its legal and finance inputs for projects. So when the grant finished, councillors agreed to continue to support the team and grow the energy work with the view to invest in larger projects.
"That’s when politicians agreed to use some of the profits from our schools programme to fund the now six-person team. What that means is that the team is not funded through council tax but from the profits on the energy investments.”
However, French pointed out that as MLEI is a new business within the authority it benefits from council support with cash flow.
There were 3 strands of work:
1. Consolidate: benefit from our assets and access finance investments
2. Meet targets: contribute to government targets for renewable energy
3. Future proof: acquire skills to help support energy projects and the contracting arrangements.
This led to investment in a 12-megawatt solar farm in Cambridgeshire. The land was owned and financed by the local authority – making it one of the only local-authority projects to access the finance incentive, Contracts for Difference.
This finance incentive guarantees the price of the electricity sold into the wholesale market and is a positive benefit to the project.
French explains that the team initially invested in 10 schools, but as of 2019 they now have 55 schools in contract to deliver retrofit energy efficiency and generation measures, including solar PV and biomass boilers.
Investment to date is £8.7 million. The retrofits benefit from energy-generating measures which produce income that help pay for the capital costs of the energy measures.
Local Authorities seek not only a return on investment but also social value and or delivery of key policies.
“One of the really good things the councillors did was to agree project paybacks of up to 15 years for schools to allow them to save more energy and carbon emissions through upgrading boilers as one of the more expensive measures.
"For many finance mechanisms, payback is needed in 5 to 8 years. This excludes the range and variety of energy measures that could be installed. This was a marked change in how to finance energy measures, and it showed leadership from councillors.
"For some of the smaller schools, even 15 years wasn’t enough. So then we asked for a 20-year payback, for example, to upgrade the boilers of a small school with 100 pupils,” explains French.
“The UK’s energy system is changing and the transition to a new system is underway. New technologies such as battery storage are required to bring significant renewable energy onto our energy system.
"However, the revenue streams are still volatile for bringing forward battery storage. This brings risk. Cambridgeshire county councillors are taking a long-term view and have a positive perspective on risk in regard to energy projects.
"Some councils are so risk averse. This prevents energy projects coming forward or minimises the benefits the projects can offer to their organisation and their communities,” she adds.
Don't get left behind
Get started by looking at your carbon budget and being clear about the local authority’s commitment to lessen its reliance on fossil fuel.
Local authorities will need to build their capacity to work in this area of renewable energy rapidly though.
French explains that’s “because energy is becoming a strategic infrastructure as important as any road or digitisation service.
“Digitisation has to run on electricity and it is prudent to plan for an effective digital world alongside the electrification of transport and heat. This is dependent on access to clean, low-carbon electricity freely and easily available,” says French.
No wonder she thinks that: “In terms of how this plays out strategically we are at the most exciting time for energy in 100 years.”
Winning over business
Businesses have created Cambridge Ahead “where businesses can thrive” and are starting to try to influence the low-carbon agenda, so yes businesses are influencing the work of the public sector.
“Cambridgeshire has one of the largest clean-tech sectors in the country. The future of the energy system is around smart technology control systems.
“This is a growth area for business and as we move further towards the knowledge economy, it is very important for businesses to access clean energy to support their knowledge and data centres.
“If we cannot provide the clean energy to support business need, then business will go elsewhere. Our economy will depend on the ability of our future energy system to facilitate clean energy to support business needs,” says French.
French is impressed by the impact of the school climate strikes on local politicians.
“During the school climate strikes, our council leader took the opportunity to listen to a wide range of students and their views on climate change, the environment and plastics pollution.
“As a result, we are now scoping how to have stronger and better discussions with young people about climate change.
“A lot of kids are talking about plastic, why roads are still being built, and even ways to deliver air pollution benefits by managing congestion.
“There is a strong sense from the students that it is their future and they want a say. Many students are also into the technology of IT, electric vehicles and want to know how that infrastructure is going to be brought forward.”
Cambridgeshire County Council is a clear pioneer in energy efficiency and future-proofing.
Its success comes as much from a flexible and knowledgeable renewables team as local leadership.
French feels strongly that “local politicians had the foresight to set high-quality growth aspirations tailored to meet future challenges, including climate change and connectivity between homes and jobs".
Cambridgeshire’s Corporate Energy Strategy is essential reading for councillors and Climate Action Groups wanting to decarbonise local energy.
It sets out 5 key objectives for how the council will improve the efficiency of its assets, reduce energy consumption of its services and produce low-carbon energy on its assets for local-energy consumption:
1. Provide a better joined-up, corporate approach to energy investment on assets to generate income and make savings for the council.
2. Identify how to reduce energy consumption through service delivery redesign and policy development.
3. Attract investment into energy infrastructure on the council’s assets which can benefit the council and the broader community.
4. Identify how the council’s assets can facilitate the development of low-carbon energy infrastructure to support transport, housing, waste management and smart community projects.
5. Work with all partners (public and private sector) and the local community to identify and facilitate low-carbon energy projects using the council’s assets that bring benefits to all partners.