A complicated plan to “take control of the city’s energy” has hit another roadblock and will be delayed again. This time Bristol City Council has been advised that buying renewable energy from local community groups could fall foul of national regulations.
Quite a lot of energy is generated within the city, including some by community groups, but this is usually sold to the National Grid and then bought back by the council at an inflated price. The council wants to purchase this directly from local generators, in a complex deal known as “sleeving”, which has proven tricky to pull off.
The deal was supposed to be in place by next spring, in time for the new financial year in April. But councillors on the environment policy committee voted to delay the new arrangement on December 19, after the latest legal advice warned against the plan.
Helen Reed, head of City Leap client and energy service, said: “We’ve had some promising engagement with suppliers, so it looks like we’re going to be able to move forward with those arrangements, which is really good. But unfortunately, we’ve hit a few technical roadblocks while looking at how we get through the local generation element of the sleeving arrangements.
“We really want that locally generated electricity, because that’s the central part of what we’re doing. We’ve been working through a solution with Ameresco, but the time it’s taken to get to that solution means that we’re now not going to have the sleeving arrangements in place by March 2025.”
The problem is the national rules, set by the government, on public procurement. This refers to how councils and other public sector bodies purchase goods and services, including energy. These rules prevent councils limiting contracts based on a specific area or type of bidder, and so electricity generators from across the country would be able to bid for the sleeving deal.
The sleeving set-up will now be delayed for a further six months — adding £643,000 to the council’s electricity bill — or potentially even another year. Instead, an American company will be responsible for buying energy generated by local community groups and other generators. Ameresco signed a £424-million deal with the council in 2022 to switch the city’s energy away from fossil fuels.
David Gray, energy supply manager, added: “We’ve had a meeting with BEC [Bristol Energy Cooperative] to discuss the new mechanism with them and to introduce them to Ameresco. We had a similar meeting with Ambition Lawrence Weston a couple of weeks ago. So the dialogue has very much started and both those groups are interested in what we’re proposing.
“Going through the council’s processes involves a lot of administrative effort. It’s a different arrangement with Ameresco and both the groups seem more comfortable with that. But it’s early days yet.”
Once the sleeving deal is finally launched, hopefully in October, local electricity generators will power the council’s buildings, traffic lights and lamp posts, as well as other public sector buildings in Bristol. The whole contract is worth £78 million, including a cost to the council of £33 million, although this is cheaper than the current way the council purchases electricity.
Previously the council was unsuccessful in setting up a smaller sleeving deal, and attracting an energy company to run the arrangement. So the size of the deal was doubled, and council bosses hope the larger contract will be more successful in attracting bidders.
Labour Councillor Ellie King, vice-chair of the environment committee, said: “I love the ambition of this, it’s really exciting and it’s the first of its kind in the UK. There’s an element of risk in that — I’m quite pro-risk actually in terms of these kinds of things, because there’s an opportunity to model for the rest of the country if we get it right, and roll it out to other local authorities.”