Decision details

To update Cabinet on the outcome of the Huddersfield District Energy Network Outline Business Case Study and request approval in principle to progress to the Full Business Case stage

For Cabinet to indicate their support in principle to taking forward the capital requirements of the scheme for consideration as part of the Council’s Medium Term Financial Strategy for 2023/24.

Engagement: -

Appropriate internal and external stakeholders through the development of the Outline Business Case

Environment & Climate Change Directorate Senior Leadership Team

Executive Team

Lead Portfolio holders (Cllr Naheed Mather, Environment and Cllr Will Simpson, Culture and Greener Kirklees) and other relevant Portfolio holders: Cllr Paul Davies (Corporate) and Cllr Graham Turner (Regeneration)

Leadership Management Team

Waste Member Reference Group

Neighbourhoods and Scrutiny Panel (Pre-decision Scrutiny)

1)      That the results of the Outline Business Case, dated 30 March 2022, be noted, along with the considerations relating to the Green Heat Network Fund application timing (sections 2.38 and 2.42 refer).

2)      That approval be given to the proposed commercial delivery model, procurement and funding strategy up to full business case as set out in the outline business case.

3)      That authority be delegated to the Strategic Director (Environment and Climate Change) to apply for, in retrospect, and to accept in principle external funding of the Huddersfield District Energy Network (HDEN) from the Green Heat Networks Fund (GHNF) and other appropriate sources of external funding necessary to progress the project to full business case, in accordance with Financial Procedure Rule 22.

4)      That authority be delegated to the Strategic Director (Environment and Climate Change) in consultation with the Cabinet Member (Environment) and the Cabinet Member (Culture and Greener Kirklees), in order to progress the next steps as set out in Commercial and Management Cases, specifically; (i) a detailed assessment of the Energy from Waste(EfW) power export value (ii) alignment with procurement of Waste Services Contract (including EfW) to agree the supply of heat and power (iii) to agree the compliant procurement route, prepare and undertake the procurement exercise for the delivery of the HDEN, as set out in the Commercial Case of the OBC (iv) customer acquisition – preparation and agreement in principle of heat and electricity supply arrangements with District Energy Network customers (including Council owned sites) (v) securing funding for the HDEN commercialisation stage (vi) procurement and operation of HDEN assets (vii) HDEN operational arrangements (viii) heat offtake agreement between HDEN and EfW (ix) to prepare and submit full planning application/s for the construction of the proposed Energy Centre and the other elements of HDEN falling with the scope of Planning Permission regulations and (x) any further steps to progress the scheme from outline business case to full business case, which could reasonably be anticipated.

5)      That authority be delegated to the Strategic Director (Environment and Climate Change), in consultation with the Cabinet Member, to delivery any minor alterations to what is set out in the outline business case and which are in the interests of the Council to ensure that the project is delivered up to full business case completion, and that any significant alterations be referred to Cabinet.

6)      That the funding requirements for the HDEN, as set out in the financial case of the outline business case, be noted and that approval be given to supporting the Council investment and borrowing requirements as set out in the financial and management cases (sections 3.15 to 3.22 refer) in conjunction with (and anticipating) a successful application to the Green Heat Networks Fund.

7)      That authority be delegated to the Strategic Director (Environment and Climate Change) to make all necessary preparations to set up the special purpose vehicle (ESCo) and that a further report be submitted to Cabinet following detailed evaluation by the Solicitor to the Council and the Chief Finance Officer to agree the establishment of the special purpose vehicle for the Huddersfield District Energy Network.

8)      That a report be submitted to Cabinet following the completion of the commercialisation stage of work, in order to consider the resulting full business case for the HDEN and determine whether to progress the scheme to construction and delivery.

9)      That authority be delegated to the Service Director (Legal, Governance and Commissioning) to sign any legal agreements, documents or instruments which the Council is required to enter into up to the full business case stage (this does not extend to the transaction documents which will be entered into at financial close for which specific authority will be sought as part of the approval of the final business case).

10)  That the Service Director (Development) be authorised to appropriate the Council owned land at 37 Old Leeds Road for the purposes of the proposed Energy Centre for the Huddersfield District Energy Network.