01.11.16
The glue to Edinburgh’s long-term energy vision
Source: PSE Oct/Nov 16
Shortly after Energy for Edinburgh finished appointing a board of directors, PSE caught up with its chair, Cllr Adam McVey, to find out more about Scotland’s first council-owned operable energy services company (ESCo).
Edinburgh City Council has achieved a landmark accomplishment by recently becoming the first local authority in Scotland to set up its own operable ESCo.
Energy for Edinburgh, an arm’s-length company of which the council is the sole shareholder, will act as the main delivery vehicle for public and private projects focused on energy efficiency, including initiatives designed to meet the council’s five key energy planks set out in its Sustainable Energy Action Plan (SEAP) 2015-2020. These strands are: energy efficiency; district heating; renewables; resource efficiency; and sustainable transport.
PSE caught up with the chair of Energy for Edinburgh’s board, Cllr Adam McVey, shortly after he had finished appointing the eight directors responsible for overseeing the company’s work. According to him, the gender-balanced board comprises a “fantastic mix of talent”: people hailing from all over the UK with backgrounds in community energy and the public and private sectors.
First order of business
While Cllr McVey stressed that the company’s public ownership model isn’t exactly “reinventing the wheel”, he underlined the great opportunity it opens up to focus on meeting Edinburgh’s carbon emission targets. The council’s overall SEAP target, for example, is to reduce emissions by 42% by 2020, compared to 2005 levels.
But that won’t necessarily be Energy for Edinburgh’s first order of business. In the initial years, the company will mostly focus on areas such as district heating. “There’s a huge opportunity in terms of looking at district heating in Edinburgh, because it’s a highly dense population with a lot of large blocks of flats,” he explained. “If you can match district heating with renewable energy production, you can have a huge impact on your carbon emissions because you’re not just tackling electrification of the grids: you’re essentially de-carbonising your heat network as well as your electricity supply.” He added that this will be a “front and centre” priority on the ESCo’s to-do list.
Gluing organisations together
Cllr McVey said the objective is to turn the company into “a glue” for projects that “might not have been delivered as quickly otherwise”.
“What we’ve found in Edinburgh is that there are some projects available in terms of ideas, so some companies have capacity within themselves to deliver things like district heating projects or ground source heat pump projects, and there are some companies that have the expertise and the ideas but don’t have the funding,” he continued.
“Because they are private companies, they’re finding it difficult to get capital or collaboration with other bodies, be it in the council or other public or private sector organisations.
“There was a need for, in that circumstance, almost an honest broker to come in and form a specialist vehicle to bring everyone together, to be able to glue organisations together around substantial projects, and also provide the mechanism for attracting funding.”
Becoming self-sustainable
Despite the enthusiasm with what the company can help deliver, its first couple of years will be particularly focused on ensuring it becomes financially sustainable. Energy for Edinburgh will be starting off with seed funding from the council, matched by funding from the Scottish government, but hope to develop enough income streams in the first few projects to fund future ideas.
“The quicker we can deliver projects and get an income stream even on a relatively small scale, the quicker we can upscale our capacity and deliver more things going forward,” said Cllr McVey. “I’m not focused on attracting public sector funds year on year; I think we need to take the money that we have an run with it, and get to a point of financial sustainability as soon as possible so that the future of the company is secured – and then it can do things that are positive for many years to come.”
Asked what advice he would give to councils seeking to develop similar initiatives, but who are often fearful of the funding implications in times of austerity, Cllr McVey said without skipping a beat: “I would say do it, and do it quickly.”
He added: “Sometimes it’s hard to take that leap and make that commitment, even when you have the funding and the will and the relevant council decisions doing it. My advice to councils would be do it and do it quickly, and my advice to council officers would be once that agreement has taken place, get your ducks in a row as quickly as possible, get your boards in place, because that’s the only way you’re going to get projects delivered within a reasonable timescale.”
FOR MORE INFORMATION
W: www.edinburgh.gov.uk
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