The aim of Workstream 2 was to create a stronger business case for investment to help bring forward more projects in the future with less reliance on grant funding.

To do this, the Catapult worked with partners in Greater Manchester to

• Develop and test outline business model approaches,
• Assess costs, benefits, risks, opportunities,
• Design and validate business model in detail for most promising option(s), and
• Support adoption of the model.

This report summarises the findings from the project.

Sections included are 

• Where are Local Authorities at currently?
• 1. Procurement and Contracts
• 2. Raising Finance
• 3. Creating value through new business models
  • Short Term Business Models
  • Long Term Business Models

The case for local energy

• There is a strong desire for increased local action on climate change  with over 80% of local authorities (local authorities) declaring a climate emergency
• Two thirds of local authorities are looking to go net zero 20 years before the national target 
• Accordingly, many local authorities are starting to pull together climate strategies and local area energy plans……
• …… but face difficulties turning plans into action due to a lack of time, resources and skills
• Projects to date have been largely reliant on grant funding (e.g. Public Sector Decarbonisation Scheme) or subsidies (e.g. Feed in Tariffs) 
• Local authorities should prioritise what they can do now such as setting long term energy strategies and decarbonising their own estate
• There is also a need for longer term business models that allow local authorities to drive wider decarbonisation of the local area 
• Already, there are encouraging, emerging examples where local authorities are taking the lead on projects
• Also, there is an increasing number of solutions targeted at local authorities that can enable decarbonisation at scale without having to take on all the complexity

The Case Against…..

• Number of high profile failures for local energy in the past (e.g. Robin Hood, Bristol Energy)
• Complexity in procurement and setting up the right contracts with partners
• Difficult to find sites and the right type of projects
• Understanding how to manage financial risks and price uncertainty
• Lack of clarity and evidence on how energy from local sources should be valued

The Case For…..

• Much improved business case for renewable energy projects at the right sites and scale
• Energy price volatility driving a need for new solutions for community
• Successful partnerships with community energy and private sector
• Future market conditions increasing revenue opportunities for local generation and flexibility