Agenda item - CONTRACTING WITH LEE VALLEY HEAT NETWORK FOR THE PROVISION OF HEAT ON ENFIELD'S HOUSING ESTATES

Agenda item

CONTRACTING WITH LEE VALLEY HEAT NETWORK FOR THE PROVISION OF HEAT ON ENFIELD'S HOUSING ESTATES

A report from the Director – Regeneration and Environment and Director of Finance, Resources and Customer Services is attached. This seeks authority to enter into a series of legal agreements with the Lee Valley Heat Network Ltd. (Report No.39, agenda part two also refers) (Key decision – reference number 3988)

(Report No.34)

(8.10 – 8.15 pm)

Minutes:

Councillor Ahmet Oykener (Cabinet Member for Housing and Housing Regeneration) introduced the report of the Director – Regeneration and Environment and Director of Finance, Resources and Customer Services (No.34) seeking authority to enter into a series of legal agreements with Lee Valley Heat Network Ltd.

 

NOTED

 

1.               That Report No.39 also referred as detailed in Minute No.21 below.

 

2.               That the Housing Development and Renewal team had included a requirement for a distributed heating network facility on all the major developments that they had procured, as outlined in the report. It was the intention to include similar requirements in the procurement of development partners on all future estate renewal projects where they were large enough to justify the requirement and were not within range of an economic extension to an existing district heating system. Councillor Oykener outlined the benefits and implications of the proposals set out in the report, for Members’ consideration.

 

Alternative Options Considered: That the Council manage the operation of each energy centre as they came forward. This had been discounted as the experience of managing distributed heating networks within the Council had a poor reputation, and the Council wished to improve the services received by both tenants and leaseholders on the new developments. That, the Council procure an external operator for each energy centre as they were completed. This had been discounted as, individually, each energy centre was not large enough to obtain the economies of scale that were considered necessary to be able to offer competitive heat prices to the consumers and certainly not on any basis that involved consistency between regeneration projects. 

 

DECISION: The Cabinet

 

1.               Noted the progress at paragraphs 3.14 and 3.15 of the report that had been made to agree commercial arrangements between the Council and LVHN for both the operation and maintenance of known energy centre opportunities that would be developed as part of the estate renewal programme and to regulate arrangements for future distributed heating network facilities that might come forward from both the existing estates and from future estate renewal projects.

 

2.               Agreed to delegate authority to the Director – Regeneration and Environment, acting in consultation with the Director of Finance, Resources and Customer Services, to agree the terms of and enter into the agreements that need to be put in place to regulate the commercial arrangements between the Council and LVHN. These include a portfolio agreement, site energy agreements, and various other relevant template agreements.

 

Reason: LVHN HoldCo (with its wholly owned subsidiary operating company) Energetik was a Council-owned company that was being set-up to specialise in the operation and maintenance of a distributed heating networks with the aim of providing consumers with a competitive retail heat price, achieved through economies of scale, access to bulk purchase of fuel, access to competitive wholesale heat costs from the NLWA energy from waste plant and access to competitively priced funding, This would help achieve a key Council objective of reducing fuel poverty as well as reducing carbon emissions. Entering into a contract with Energetik for all heat network facilities that we know would come forward as part of the estate regeneration programme and for heat network facilities that would come forward in the future would help both the Council and Energetik achieve economies of scale that would not be achieved by contracting for each energy centre separately.

(Key decision – reference number 3988)

Supporting documents: