Budget cuts and increasing pressure on services have compelled Local Authorities to think of different ways to fill the ever-growing funding gap. Councils have been taking different approaches to this problem, depending on local circumstances. Commercial investment boards set up by local authorities now scrutinise ways to generate long-term revenues whilst maximising the benefits for local residents and businesses.
These range from investment in commercial property and regeneration to one local authority even setting up its own bank! The focus on sustainable income generation is now acute with the number of conferences and events devoted to the subject testament to this.
Renewable energy offers massive potential for local authority investment and support – and it’s an area not unfamiliar to the public sector, with councils being instrumental in setting up the first municipal power stations (Swindon had one in 1903). Today’s energy sector may look different but still provides the same opportunity to support local residents and businesses and create long-term revenues through investment.
Public Power Solutions (PPS) was set up by Swindon Borough Council specifically to address this opportunity.
Our first schemes focussed on developing solar on council-owned buildings, moving on to larger scale solar farms on the edge of Swindon financed by the private sector. We developed a 62MW solar park for the Science Museum on a former airfield in Wroughton which is now owned by a number of local authority investors from around the UK.
The opportunity for councils and communities to benefit from direct investment in solar drove the development of two innovative 5MW projects– funded by the first local authority backed “solar bond” and the first independent “green” ISA investment in a solar farm, both structured with help from Abundance Investment. In Swindon alone, PPS now generates over £700,000 annual income for the council through its investments in renewable energy.
The transition to zero-subsidy renewable energy presents major challenges, but also exciting opportunities for collaboration between the public and private sectors. Here in Swindon, we’re now working on developing battery storage and EV-charging infrastructure alongside solar, to improve the economics. Local authorities have assets and crucially, longevity, key ingredients for the transition to zero subsidy renewables. The ability to strategically plan new development, alongside a low cost of capital creates a springboard for new public-private partnerships which can drive zero-subsidy schemes.
Working together doesn’t end when a project is commissioned – long-term O&M agreements with public sector organisations, suitably incentivised for all parties, create a fertile environment for investing in optimising existing assets.
The PPS business model is a “bridge” between public and private sectors, helping local authorities review their assets and energy loads and creating viable development propositions and financing structures. We then engage with private sector developers through an accelerated, but procurement compliant tendering system to construct and commission new schemes. This model creates sustainable income opportunities for local authorities and generates commercial projects for private sector developers – all whilst supporting the move to a more sustainable energy future.
So how can local authorities make the most of solar generation and storage opportunities? The Solar Trade Association’s new report ‘Leading Lights’ shows many local authorities making good progress on energy projects already. There are three key things to think about in developing generation projects:
- Look at what energy you are currently using and where (where there are large loads, a solar plus battery scheme may help manage your energy bill).
- Look at the assets you have and what can be achieved in terms of energy generation. (If you don’t have suitable assets, consider partnering with other local authorities which do.)
- Take action! Whether you start small or jump straight into a large project, delivering something on the ground will build confidence to move on to the next project.
PPS is set up to help advise on all stages of the development process and we’d be more than happy to discuss your projects.
We would also urge you to make full use of the Solar Trade Association’s report ‘Leading Lights: How Local Authorities are making solar and energy storage work today’, which PPS sponsored. As members of the Solar Trade Association we have been working alongside other local authorities to demonstrate how councils can lead on solar and battery storage today.