Overview

Bristol City Council (BCC) is looking to establish an innovative electricity ‘Sleeving Pool’ (the Pool) to secure zero-carbon electricity supply for their operations and to support new community renewable generation. BCC has received legal advice on the structure and design of the Sleeving Pool concept.

The structure allows demand customers, such as a local authority, to sign Power Purchase Agreements (PPAs) directly with multiple generators and pay them for all electricity generated. All exported power from these sources of generation is then assigned to a Sleeving Pool that demand sites can draw from, either shared equally or on an agreed merit order.

The structure means that the Pool can be dynamic, with additional demand or new generation sites being added over time. The balance between the demand and generation would be managed by a licensed supplier acting as a Pool Manager.

Executive Summary

The research and modelling conducted for this study suggests that a Sleeving Pool could provide a viable solution to allow local authorities to directly procure and support new local energy as well as reporting Net Zero emissions. However, there are some key challenges and barriers that need to be addressed for this approach to work in practice.

Governance of the Sleeving Pool will be an important consideration and BCC will have a key role in signing off on the value for money of the structure, the PPA prices offered, and the identified projects. These decisions need to be informed both by additional social and economic benefit to communities as well as long-term electricity price risk.

The Sleeving Pool could, in theory, be joined by more than one local authority, but this is likely to add complexity both to the governance arrangements (which will require joint local authority governance approval) and to the intra-pool trading and merit orders. It is recommended that BCC further consider how generation and demand might be matched within the Pool and the implications of different approaches outlined in this report.