Driving local regeneration – economic and environmental
Small businesses employ around 60% of the workforce in the UK – and generate 1/3 of territorial greenhouse gas emissions1. With a target to reach net zero as a borough and 93% of businesses in the borough being classified as ‘micro’, Sutton are making smart use of business rates relief to support businesses and reduce emissions. Discover how they did it and the impact this will drive.
Challenge – how to reduce emissions not directly controlled by the council?
In common with lots of UK authorities, Sutton declared a Climate Emergency, supported by specific plans of action to make Sutton carbon neutral. While addressing ‘in-house’ emissions is relatively easy (through switching to renewable power, upgrading to LED lighting, installing smart meters etc2), the council has thought hard about how to enable emissions reduction across the wider group of stakeholders in the borough.
Small and medium enterprises (SMEs) are an important constituency and typically lack the bandwidth and resources to focus on decarbonisation. They are also under significant commercial pressure following the covid-19 pandemic with the rate of business ‘deaths’ in the borough increasing and Sutton High Street vacancy rate on an upward trajectory since 2015.
Solution – a cost effective way to improve SME robustness and reduce emissions
Sutton has created a model which both financially supports small businesses and incentivises them to reduce their emissions. Using powers under section 69 of the Localism Act 2011, the council is offering business rates relief to SMEs which commit to a 4-step decarbonisation pathway.
|1.Commit||Member||Join the Partnership by committing to halve emissions by 2030 and achieve net zero before 2050.||None|
|2.Assess||Level 1||Measure carbon footprint and set emissions reduction baseline.||None|
|3.Plan||Level 2||Have strategies in place to halve emissions by 2030 and achieve net zero before 2050.||100% FY 2023-24|
|4.Reduce||Level 3||Implement emission reduction strategies to cut carbon emissions annually by at least 5%.||100% FY 2024-25|
Typically business rate payments are split between the council (30%), the GLA (33%) and central government (37%). The council has made this initiative cost effective for them by charging SMEs a fee equivalent to 30% of business rates to participate in the scheme – thereby resulting in a ‘net’ reduction of 70%. The administration of the scheme (including provision of technical assistance by delivery partners, Green Mark3, supporting businesses in target setting and verification) is funded from this fee.
Importantly, to access the rates relief in the second year, the scheme requires participating SMEs to be able to demonstrate to a third party (Green Mark) that they have truly reduced emissions by at least 5% against their baseline, meaning that Sutton will be able to provide credible evidence of progress towards their wider area target. In addition, although businesses receive free technical assistance for ‘baselining’ of emissions and emissions reduction ‘planning’, they can only access relief once they have completed these steps and it has been validated, ensuring that they are truly committed partners.
Impact – initial 63 tonnes annual CO2 reduction, driving progress to net zero
Sutton administered an open competition amongst businesses to access the rates relief and 77 companies have signed up for the first year cohort. If each of these businesses reduces emissions by 5% this would equate to approximately 634 tonnes annually, an equivalent to the entire carbon footprint of 5 people.
Sutton’s goal with this pilot is to test whether tax incentives are an effective tool to drive business action on climate. It also aims to demonstrate on a practical level what the corporate sustainability literature has identified as a ‘statistical correlation between business environmental and economic performance5.’
The council intends to validate these assumptions and achieve good value for money in the process. If successful, Sutton will explore opportunities to expand the pilot to include more businesses and demographics.
What next? – measuring and maximising impact
The GEP has just launched, and Sutton will be measuring the impact across both economic and environmental indicators:
● Economic: variance in turnover, gross profit as a percentage of turnover, labour turnover and headcount.
● Environmental: nominal and percentage emissions reduction in scopes 1 (operations) and 2 (energy).
The team is mapping out additional support to SMEs in the partnership, including enabling joined-up procurement to access sustainable products and services at scale.
Momentum is building around the GEP initiative and Sutton and partners are in discussion with a variety of organisations to help scale the concept more widely, in the UK and beyond.
Find out more
Iterating towards a tailored neighbourhood retrofit solution in partnership with Northern PowerGrid
Place based decarbonisation needs to happen at scale. But as 3Ci’s research has demonstrated, the sums of money involved are eye watering.
Treating each property in an area as an individual unit to be optimised is unlikely to result in the most cost-effective set of interventions. Instead, examining options at a neighbourhood scale will allow for a more efficient use of resources, as well as supporting better planning for local low voltage network reinforcement – that is, ensuring the right infrastructure is in place to supply the necessary grid power to the neighbourhood.
Newcastle City Council (NCC) is developing a Low Carbon Neighbourhood model to discover how to achieve this aim. The project looks initially at a low rise mixed-tenure residential neighbourhood of 228 homes, with 156 being council owned (and managed by Your Homes Newcastle). As the pilot evolves, a generalisable process is being developed for replication elsewhere as well as providing a springboard for unlocking additional inward investment to the city.
Challenge – balancing specificity with a need to scale
To date, attempts at establishing neighbourhood scale guidance for residential decarbonisation have struggled to provide sufficiently accurate and complete recommendations. A lack of accurate data alongside challenges getting all relevant stakeholders to collaborate have hampered efforts to move from theoretical estimations to the more fully fleshed out details necessary to provide the confidence to invest.
Examples of complexities to be resolved include:
- Differences in the characteristics of housing typologies (eg flats, townhouses, terraces) and age imply different solutions in terms of fabric insulation, heating, renewable generation etc
- Older properties in particular often lack detailed floorplans and BIM data needed to design the best interventions
- Power and heat demand varies significantly by time of day, with implications for the optimal solution design
- Mixed tenure neighbourhoods exacerbate the complexity of achieving agreement between residents
- Distribution Network Operators (DNOs) have their own regulatory compliance requirements which aren’t always considered alongside local authority priorities
Solution – building a robust techno-economic model from ground up
Newcastle City Council are in the process of building a replicable model for neighbourhood scale decarbonisation.
The first pilot neighbourhood, St Paul’s Place, was selected because:
- ‘Fabric’ retrofit improvements were already in place allowing better optimisation of heating systems
- Gas boilers in the social housing units were nearing the end of their service life; an ideal opportunity for change
Working closely in partnership with Northern Powergrid (NPg), NCC initially pooled available neighbourhood level data including NPg low voltage network data, calculations on roof solar potential and housing stock data to establish a baseline set of characteristics.
Next, a selection of buildings from the neighbourhood were chosen (to be representative of the diversity of housing stock) and more detailed surveys were carried out:
- An exterior 3D laser scan using a drone
- An interior laser scan using Matterport technology
These enabled the creation of a more de tailed BIM model of each property and provided the basis for an energy retrofit assessment to (and beyond) PAS 2035 standard.
Approximate models are being ‘cloned’ across the whole estate to enable exploration of the best combination of low carbon technologies to ‘de-gasify’ heating supply (for example communal air or ground source heatpumps), as well as incorporating local renewable electricity supply and storage.
NCC have fortnightly calls with NPg to align their activities and ensure that the implications of design choices are considered in the context of local network reinforcement and flexibility requirements – this is about a full city-wide approach and one that can be replicated by all local authorities in their licenced area. The aim is to model energy demand and usage on a half hourly basis to help understand the distribution network load implications and potential role for solar photovoltaic, battery installation and smart dynamic optimisation.
Once complete, NCC expect to be able to identify the best local combination of technologies and build out the financing model which will enable deployment (likely a combination of grant and investment), but the goal is to use this level of modelling to de-risk projects, move away from grant funds and attract investment.
Impact – social housing as a market maker
While the pilot is still ongoing, NCC anticipate the outcome of this work to provide the confidence to invest in the right mix of low carbon technologies in St Paul’s Place. With >150 properties owned by the council in the neighbourhood, and over 25K across the city, they provide sufficient scale to help ‘make a market’.
The robust nature of the survey work will provide confidence to landlords and owner occupiers to invest in the upgrades, and there is potential for NPg to join an investment ‘alliance’ here given the potential reinforcement savings and flexibility gains the scheme could unlock.
What next? – legal and commercial arrangements
As NCC zero in on the most feasible technical options for the first Low Carbon Neighbourhood, they will work on which are the most feasible, and how to deliver them, both in terms of financing and legal / contractual terms (including any potential need to modify tenancy agreements).
Fortuitously, Ofgem has recently awarded funding to NPg to develop a ‘community DSO’ (distribution system operator – ie the more active future of DNOs) model. This 5 year project aims to deliver a proof of concept for a new replicable local energy market framework – perhaps the solution to the financing of Newcastle’s LCNs.
Find out more
 Targeted to be complete by end of 2023
Over 200 delegates participated in discussions about how cities and investors can come together to fund a just transition to net zero.
Two major new initiatives to help accelerate the net zero transition were announced on 29 June as 3Ci – the Cities Commission for Climate Investment – hosted a London Regional Investor Event at the headquarters of Connected Places Catapult.
First was the launch of a 3Ci publication advocating the case for a National Net Zero Neighbourhoods Programme and a Call for Proposals from local authorities to submit projects looking for investment into the programme.
A second initiative unveiled to delegates was the launch of a Green Finance Fund from the Mayor of London, where up to £500 million will be lent to projects that focus on energy efficiency, renewable energy and clean transport.
Eligible organisations offered favourable borrowing will include local authorities and social housing providers, and grants are available for small size projects up to £75 million. The Fund was announced by Greater London Authority’s Assistant Director for Environment and Energy, Catherine Barber.
Professor Greg Clark CBE, Chair of 3Ci and Connected Places Catapult welcomed London’s Deputy Mayor for Environment & Energy, Shirley Rodrigues to the stage to speak about The Mayor’s vision for achieving net zero in London.
“Cities have to move fast with this agenda, but they are delivering,” she said.
The event took place in London Climate Action Week, during which a large countdown clock was placed in Piccadilly Circus to remind people there are just over six years left in order to balance greenhouse gas emissions, and prevent global heating exceeding 1.5C above pre-industrial levels.
Shirley Rodrigues added there is a “huge challenge” ahead for professionals involved in promoting net zero initiatives, adding that it was “great to be here” at the London Regional Investor Event to discuss opportunities with interested parties.
The Deputy Mayor was joined on stage by Cllr Georgia Gould, the Leader of Camden Council and Chair of London Councils which represents 33 boroughs including the City of London. “One area where we have come together incredibly strongly is in our shared commitment to taking action on the climate crisis,” she said.
“The work we have done with 3Ci shows huge investment is required to get us to net zero. But there is also a massive opportunity around jobs; ensuring there are the skills required around green finance, retrofit and new ways of working.”
Georgia added that many boroughs have large housing stocks and a “massive ambition” to make them more sustainable, but that capacity and finance are often lacking. “The job of bringing those two together is a challenge, but is also a massive opportunity and that is why the work of 3Ci is so exciting: building and deepening the relationship between private finance and projects on the ground.
“The prize is enormous and there has never a better moment to do this. Residents are facing a cost of living crisis and there is a huge desire from citizens to see change.”
Financers give their thoughts
In a ‘Dragon’s Den’ style, local authorities pitched their net zero projects and identified opportunities for investment during a series of breakout sessions. Investors then gave their responses on how to make the projects more investible and advice on financing models.
Later at the event, Greg Clark was in conversation with HSBC’s UK Head of Climate Change, Tim Lord. Greg asked Tim why investors and financiers should consider local government, cities and the public sector as great places to invest if they want to achieve net zero outcomes.
“There is a huge willingness to invest,” replied Tim, who added that “the lens has changed from ‘we should do this to hit targets’ or ‘it is the right thing to do’, to something that is much more existential about the future of an organisation and how you drive growth.”
Cities are where the transition to net zero is likely to progress most quickly, he added, but in some cases, there can be quite high levels of risk for consumers or financial organisations. There is a need, therefore, to work with public sector organisations to help de-risk some of those investments to get them moving.
Tim said another challenge is around scale. “We need to be confident the scale is coming, so that we can invest in the people and skills and types of financial investment models that we need.” But the backing of the public sector and the coming together of national, regional and local governments “is really important to give the financial services industry the confidence to do that”.
Greg Clark turned to KPMG’s Director of ESG for Financial Services, Graham Smith and asked for his views on the public sector’s role in the net zero transition.
Graham replied that city projects often have “a political push” but also need “people at different levels to make it happen”. Organisations need champions, he explained. “Every project has bumps in the road and so you need local government to remove those bumps. Getting all levels of a city working together to tackle this is really important.”
Greg then asked for thoughts on the potential of sustainable financial returns for capital in net zero projects, and how they compare to other investment opportunities or asset classes.
“Green money is just like brown money,” replied Graham. “It has to be repaid and give a return on capital, and it has to have a project behind it that works. A sustainable project that fails within the first six months or a year because it cannot generate return or cash flow; that project has no sustainable value.
“Returns are important, but most important of all is for cities and local authorities to understand that lenders and investors look at the world in a different way,” he added.
Wrapping up proceedings, the Mayor of Hackney, Philip Glanville remarked that there was a “palpable sense of buzz” at the event among participants “in trying to meet climate challenges”.
Good work has been achieved by 3Ci in delivering a net zero pipeline, he added. “This is a unique UK wide partnership with London helping to lead the way.
“Now it is about taking reflections from today and having the courage to start to experiment with the pipeline and talk to investors to see how we can move from a pipeline to a deliverable programme of work.”
Catherine Barber remarked: “The 3Ci / Catapult model offers the chance to get together, learn and solve problems; that is what I really enjoyed today.”
Following the event, Greg Clark said that the day “enabled us to have a conversation that is not otherwise possible almost anywhere in the world.
“We focused on combining the value of the place with the logic of capital so that local government and city-wide government with pension funds, insurance companies, bankers and financial advisors can grasp the important task of investing in a liveable planet.”
Local authorities in the UK face significant challenges in funding the net zero transition. In response, 3Ci proposes the Net Zero Neighbourhoods model, an innovative concept that packages net zero projects together – such as residential retrofit and waste management – to attract private sector investment.
29.06.23, LONDON, 3Ci – the Cities Commission for Climate Investment – has published today its new report advocating the case for a National Net Zero Neighbourhoods programme.
Developed by 3Ci with support from the Department for Energy Security and Net Zero, and the public and private sectors, this comprehensive report provides an outline business case for the delivery of Net Zero Neighbourhoods across the UK.
3Ci is a partnership between Connected Places Catapult, Core Cities UK, London Councils, Key Cities, Scottish Cities Alliance and supported by Department for Energy Security and Net Zero and the Local Government Association.
Net Zero Neighbourhoods is a new concept that integrates local net zero projects into attractive investment propositions by creating scale and long-term certainty for investors, thereby joining up the different types of assets that are important to decarbonisation. This includes transforming transportation, energy, housing and waste services in a coordinated way, using a blended finance model capable of attracting capital from banks, pension funds and other institutional investors. Importantly, 3Ci’s proposals include a programme of technical assistance and capacity building to ensure projects are of investment grade.
3Ci’s Net Zero Neighbourhood model has a special focus on residential retrofit, one of the biggest sources of emissions in the UK. Here, a core problem is that every neighbourhood has a different mix of housing types and tenures, which makes collective investments needed to decarbonise neighbouring homes difficult. Evidence shows it is also unlikely that most homeowners will pay toward retrofit, increasing the need for public subsidy.
But the new approach can address residential retrofit at no cost to the homeowner or tenant and reduce the need for public subsidy from around 70-80% to 35%. It does this by creating a revenue stream from energy savings over the long-term which is attractive to capital investors, blending their contributions with smaller amounts of public subsidy in an investment vehicle. The model also allows for a saving to be passed to the householder, or used to target fuel poverty, helping a just transition to net zero.
3Ci has calculated the cost of achieving local net zero at over £200 billion just for London and the 11 UK Core Cities – for the whole of the UK that figure is closer to £1 trillion, a figure way beyond the ability of public finances to address. Without bringing private capital into local net zero projects the UK will fail to meet its decarbonisation targets, and it is exactly this gap which 3Ci is designed to fill. 3Ci’s model aims to turn the cost of net zero into an opportunity, to bring significant additional investment, jobs and green growth to UK plc, delivering local environmental and health benefits, alongside community wealth-building.
Local authorities have projects which can deliver net zero and the investment community has demonstrated a growing interest in financing them, but too often these projects are not of investment grade. 3Ci’s approach therefore also offers technical assistance and capacity building to improve the standard of projects, alongside a platform to bring investors and project owners together.
Recognising these needs, opportunities and challenges, 3Ci’s new report makes the case for a multi-asset approach that avoids only cherry-picking projects that make the biggest returns, reduces the need for public subsidy and has no cost for the householder, improving the chances of community buy-in.
The report recommends a national programme of Net Zero Neighbourhood demonstrators to provide proof of concept, creating market and investor confidence.
Prof Greg Clark CBE, Chair of 3Ci and Connected Places Catapult, said: “The Net Zero Neighbourhood has several advantages over other methods of decarbonising places. It creates scale, certainty and an investable revenue stream, whilst building capacity for local authorities and enabling community buy in. Without the approach that 3Ci has developed, both within this model and its wider work, the UK will be far less likely to attract the capital needed to achieve its net zero ambitions.”
He adds that 3Ci has set up a Net Zero Investment Task Force of private investors, is creating a Net Zero Neighbourhood Community of Practice, and developing a ‘pitch-book’ of projects, bringing together places and projects that are either developing schemes which have some of the features of a Net Zero Neighbourhood, or have the ambition to do so.
“Nowhere yet has the ability to undertake a full Net Zero Neighbourhood project however, so our goal is to also set up full demonstrators capable of testing this model. The prize will be a major shift in investor appetite for net zero, shifting the market fundamentally toward this type of model, mitigating the existential threat of climate change whilst creating local jobs and other benefits. This is an area where the UK can be truly world leading, and we must now focus together on realising this opportunity.”
As a next step, 3Ci is seeking local authorities that are interested in working with them to develop demonstrators of the Net Zero Neighbourhoods concept. Local authorities have until 5th July to register their interest.
Local authorities seeking private sector funding for net zero schemes are invited to put forward their proposals to 3Ci – the Cities Commission for Climate Investment.
3Ci is looking for projects to be included in a new National Net Zero Neighbourhoods Programme, which will support and raise the profile of pilot schemes looking for local investment. This is a non-competitive process.
Net Zero Neighbourhoods is a place-based concept developed by 3Ci which aims to increase local prosperity through enhanced growth in green businesses and access to associated jobs. It also looks to create vibrant and cohesive communities through engagement and collaborative design, and enhance the attractiveness and quality of neighbourhoods.
Further information regarding submitting proposals for a Net Zero Neighbourhood will be provided in a workshop on Wednesday 5 July at 9.30am
Proposals accepted will be incorporated into a UK Net Zero Neighbourhood ‘pitchbook’ to be shared across Government departments and potential investors forming the basis of a potential first wave of a national programme, subject to funding being secured.
Successful schemes are set to be profiled and presented at COP28 in Dubai, as well as other national and international investment focused events. They will also be shared with the private finance community including institutional investors, investment banks and pension and sovereign wealth funds.
Proposals should form part of an existing or planned redevelopment scheme and local authorities are invited to submit single proposals that will contribute towards proving the concept of the Net Zero Neighbourhood model.
- Demonstrate understanding of the place-based Net Zero Neighbourhood model and how it could be applied within the proposal
- Include a description and identification of location, including information on building type and mix (e.g. residential, office, leisure), physical infrastructure (including mobility and energy), diversity of the neighbourhood, green and blue space.
- Provide evidence of political support at a senior level
- Identify any secured or potential funding which might contribute towards the design or delivery of the programme.
- Describe the diversity and socio-economic mix of the communities within the proposed neighbourhood
Registration of Interest
Please register your interest by submitting the name of the local authority and a contact person to Helena.Downey@cp.catapult.org.uk
You will then receive a confirmation email, an invitation to join the webinar and a copy of the Executive Summary of our Outline Business Case for Net Zero Neighbourhoods.
Interested authorities will then be invited to submit a short application by 8 September 2023.
Smart evaluation of carbon savings helps maximise impact of Section 106 offset payments
Buildings account for 75% of emissions in Southwark. Addressing these emissions will be a key focus for the Borough which wants to hit net zero by 2030. Learn how Southwark determined the most effective way to progress towards this target by evaluating potential interventions across their capital portfolio.
Measuring the cost of carbon
Southwark has recently launched the Green Buildings Fund, which uses Section 106 carbon offset payments from developers to fund retrofit and low carbon technologies in council buildings. As of August 2022, developers in Southwark have contributed more than £5 million to the fund, and works are already underway to use this fund to decarbonise our buildings.
However, in order to work out the most effective way to spend this money, the council needed to evaluate how much different interventions would save. What was the cost per tonne of carbon?
Baseline energy performance and pick cost effective interventions
Southwark measured a baseline energy performance for its building stock through engagement across departments:
- Corporate facilities
- Leisure centres
This brought together multiple individual studies of energy performance and then worked out the energy savings which would result from different interventions. Finally, they calculated the equivalent carbon saving and cost per tonne. This enabled a review of the pipeline of capital works to determine the most efficient way of maximising carbon savings.
344 tonnes of carbon saved annually
So far, the Green Buildings Fund has been used to fund the planned £700,000 refurbishment of 18 council homes on the Tustin Estate in Southwark, part of a wider development of around 700 homes which will be virtually zero-emission in operation. In addition to carbon savings, this work will improve insulation and thereby reduce energy bills for residents as well as combatting legacy damp and mould issues. During the retrofit works, residents will be re-housed elsewhere on the estate, a benefit of taking a holistic approach to a large-scale development project like this.
The work includes cavity wall insulation, triple glazing, air source heat pump systems and solar panels. It is estimated that the project will save 344 tonnes of carbon per year (the equivalent of driving around the equator around 500 times), at a cost of under £70 per tonne. This has shown that a rigorous carbon measuring methodology can be applied to energy efficiency improvements in buildings, while also delivering strong outcomes for residents. Residents were closely consulted on all the works and voted in favour in a ballot, demonstrating the value of meaningful engagement through the process.
The Climate Change Team at Southwark are actively seeking new projects within the council’s portfolio to fund. The Council has pledged to spend £2m from the Green Buildings Fund by 2024, and this includes launching the fund to the public, so that local organisations can also decarbonise their buildings. In addition, Southwark’s leisure centres will be council run from June 2024 presenting another opportunity to drive impact through this funding. Southwark will also be using an Early Review of its local plan to review the amount of money that developers pay for offsetting, which is currently set at £95 per tonne.
Find out more
3Ci has partnered with Apolitical to offer free online courses for local authorities and public servants, supporting the delivery of net zero projects across cities, counties and districts in the UK.
Public Servants and Climate Change: Reaching Net Zero will support local authority colleagues to overcome the challenges to transitioning to net zero. Foundations of Delivery will enable learners to enhance delivery and performance measurement. The courses are fully funded by 3Ci.
Via this partnership, learners can expect a world-class education experience that is backed by the latest research and expertise. These courses provide an excellent opportunity to upskill your knowledge on net zero strategy and play a critical role in achieving our national net zero targets.
We invite you to apply for our courses based on your potential to make a positive impact in your community. Places are limited.
Public Servants and Climate Change: Reaching Net Zero (10 places)
Co-developed with Apolitical, Oxford Net Zero and Smith School of Enterprise and the Environment (SSEE) at the University of Oxford, this course provides a comprehensive overview of net zero, including its challenges and exploring how to promote the transition to net zero. In this course, you’ll explore the science underpinning net zero and engage with policies designed to reach it.
By the end of this course, you will be able to:
- Evaluate and critique a climate change memo to more clearly and comprehensively explain the science of climate change.
- Investigate and analyse a climate action plan.
- Evaluate the role of public servants in driving net zero.
Estimated learning time: 10 hours
Dates: 29 May 2023 – 1 July 2023
Foundations of delivery (10 places)
Co-developed with expert partner Delivery Associates, this course focuses on delivery and related performance measurement. This course will support you in understanding of the fundamental principles and processes which underpin delivery in government, such as prioritising goals, assessing organisational capacity, developing and managing effective implementation plans, and cultivating a culture of delivery.
By the end of this course, you will be able to:
- Examine key factors required to build a foundation for delivery
- Understand the delivery challenge
- Plan for delivery
- Develop routines to drive delivery
- Learn how to manage stakeholder relationships during the delivery process
Estimated learning time: 11 hours
Dates: 29 May 2023 – 1 July 2023
The criteria for selection for the courses will be based on ensuring regional representation and relevance to the applicant’s day-to-day job. No prior qualifications are required.
These courses are 3Ci’s first offering to upskill local authorities in net zero strategy, and they will inform greater work from 3Ci to accelerate capacity building and skills development to deliver net zero commitments. Contact us to find out more about how 3Ci can support your transition to net zero.
Bristol City Leap is a world first, game-changing approach towards decarbonisation at city-scale. The City Leap Energy Partnership is a twenty-year joint venture between Bristol City Council, Ameresco and Vattenfall Heat UK which will enable the delivery of over £1 billion of investment into Bristol’s energy system.
During the first five years of the partnership, nearly £500 million will be invested in a range of large infrastructure projects including the significant expansion of Bristol’s award-winning Heat Network that provides local businesses and residents with access to reliable, affordable low carbon heat from sustainable sources. Solar panels and low carbon heating systems will be installed at local schools, the council’s social housing will be made more energy efficient to tackle the cost-of-living crisis, and substantial investment will go into community-owned renewable energy projects to help residents play a part in Bristol’s journey to carbon neutrality.
Vision for Bristol City Leap
A sustainable environment, in which every individual has equal access to opportunities and is empowered to contribute to the continuing decarbonisation of their city whilst sharing in its success.
Bristol City Leap’s Mission
Action on City-scale decarbonisation of the built environment, working together to harness the power of communities, public and private sector resources to significantly respond to the climate emergency, fairly and inclusively, delivering shared outcomes for the city.
Why Bristol City Leap?
87% of people in Bristol are concerned about the impacts of climate change. Bristol’s One City Climate Strategy aims to make the city carbon neutral and climate resilient by 2030.
The council has invested nearly £100 million in decarbonisation projects over the last five years but we need to rapidly increase the scale and pace of low carbon delivery in order to meet our targets. We see Bristol City Leap as one of the primary vehicles for delivering projects that will tackle climate change and help improvements in air quality in the city.
What will Bristol City Leap deliver?
As part of its winning bid to become Bristol City Council’s Strategic Partner for Bristol City Leap, Ameresco has contractually committed to the following Key Performance Indicators (KPIs) over the next five years:
- c140,000 tonnes of carbon saving.
- c.180MW of zero-carbon generation assets contributing to net zero carbon by 2030.
- c327GWh of zero carbon energy generated.
- c£22m of energy efficiency measures deployed.
- £61.5m of social value including c£50m of contracts delivered by local supply chain.
To deliver on these commitments, Ameresco estimated that Bristol City Leap would need to invest £424m into low carbon energy infrastructure such as solar, wind, heat networks, heat pumps and energy efficiency measures – all of which will support Bristol meeting its carbon reduction ambition of becoming carbon neutral by 2030.
In addition, Ameresco has also committed to the following:
- A guaranteed £1.5m Community Energy Development Fund and a guaranteed £500k. Innovation fund over the first five years of the partnership.
- Development of a Community Benefit Fund expected to reach £2.8m during the 20 year partnership period.
- £2.34m of guaranteed payments and an estimated £1.63m of risk-based payments to BCC, the latter being dependent on the level of delivery by City Leap.
- An estimated £6m+ crowdfunding opportunities for residents to invest in City Leap projects.
- 410 new jobs created in Bristol and 1,000 jobs in total, all paying at least the ‘Real Living Wage’.
- Apprenticeships, training, work placements, mentoring and awareness opportunities.
Strategic Goals for the Initial Business Plan By 2025:
- Achieving carbon neutrality of BCC’s operational estate.
- Supporting the development of a highly skilled local supply chain.
- Delivering consistently high level of decarbonisation projects to help drive down installation costs.
- Becoming first choice decarbonisation partner for all sectors in Bristol.
Within five years:
- Developing a local energy trading market for all to participate fairly in.
- Demonstrating a successful, world-renowned partnership approach for city-scale decarbonisation.
- Achieving EPC rating ‘C’ or better for all the Council’s social housing.
- Significantly contribute to Bristol becoming carbon neutral.
- Supporting significant reductions in cases of fuel poverty and unhealthy homes.
Bristol City Leap is an innovative, world-first partnership and we have learned a great deal during its development. We are keen to collaborate and share our model with other cities across the UK and internationally to enable much wider decarbonisation.
City leaders and investment heads from across the UK were hosted on 28 February 2023 by the All Party Parliamentary Group (APPG) for Net Zero alongside 3Ci, the Cities Commission for Climate Investment, to explore how private investment can play a key role in delivering the UK’s ambitious net zero commitment.
The debate was chaired by Rt Hon. the Baroness Hayman GBE, joined by Lord Martin Callanan, the Minister for Energy Efficiency and Green Finance at the Department for Energy Security and Net Zero, Lord Larry Whitty, Peers for the Planet; Kerry McCarthy MP, Shadow Minister for Climate Change; and London’s Deputy Mayor for Environment and Energy, Shirley Rodrigues, alongside representatives from HSBC, Aviva, BlackRock and KPMG. The roundtable brought together parliamentarians, place leaders and green finance specialists to explore how local action and private investment can combine so that real change can be achieved to transform communities to a net zero future.
The reception that followed, hosted by Baroness Hayman, also featured presentations from Rt Hon Ed Miliband MP, Shadow Secretary of State for Climate Change and Net Zero; Prof Greg Clark CBE, Chair, 3Ci; Alex Sobel MP, Chair of the Net Zero APPG; and Joanne Anderson, Mayor of Liverpool.
Prof Greg Clark CBE, Chair at 3Ci said:
“The discussion confirmed three important points for me. Firstly, the UK has the combination of innovation and strong place leadership needed to deliver net zero but is currently unable to meet the cost of doing so. Secondly, major private investors want to enter this space, but struggle to find an investment pipeline that meets their needs. And thirdly, that local authorities do have project pipelines, but often lack the capacity to bring them up to investment grade.
“3Ci’s programme, which now has support across the UK local government family and from many major investors, is designed to tackle exactly these issues. Since its inception at COP26 3Ci has created a unique platform between place leaders and major investors, built a financial model capable of meeting the needs of both, and created an investment pipeline of 1,000 projects worth £60billion. The debate provided some fresh thinking for the work of 3Ci, which we will take away and include in our benefits package for localities which we are rolling out across this year.”
Rt Hon. the Baroness Hayman GBE added,
“I was delighted to Chair the joint 3Ci and Net Zero APPG roundtable and reception to hear from leading figures across finance, local government and business about their ideas for unlocking the potential of our cities, towns and regions to deliver green growth. We know that the transition to net zero cannot be delivered from Westminster and Whitehall alone – it will require innovation, collaboration and strong leadership at the local level in order to deliver this new era of opportunity for our communities.”
3Ci, the Cities Commission for Climate Investment, has welcomed the findings of Chris Skidmore MP’s report Mission Zero.
3Ci’s Chair, Professor Greg Clark CBE, said:
‘Mission Zero is a welcome and powerful contribution to the Net Zero debate at a critical moment in time. The report’s increased focus on the economic benefits of Net Zero, and the scaling up of green finance activity is much needed.
‘I particularly welcome the report’s acknowledgement the vital role of local authorities in getting to Net Zero. The role of nations in setting targets and providing the means to achieve them is vital. But increasingly, climate change is simply too complex to solve at the national level alone, and success will come only by partnering with place leadership working in tandem with the custodians of major financial institutions, which is exactly the model 3Ci has developed. I look forward to working with Chris and 3Ci’s other partners in making these ambitions a reality.’
The 3Ci team engaged with Chris Skidmore MP during the review that led to this report and made a written submission, as did many of 3Ci’s stakeholders across local government and the private sector, including UK100 who have been instrumental in championing the role of local authorities.
The essence of 3Ci’s submission is that paying for Net Zero is beyond the ability of the public purse alone, and the UK needs a new, innovative financial solution to attract additional private investment into Net Zero projects that will also boost jobs and growth.
3Ci has developed exactly such a model, working with representatives across the whole UK local government family (counties districts and towns as well as cities), alongside major investors, banks and other financial institutions, who all back 3Ci’s approach. 3Ci has also had the support and financial backing of Government through the Department for Business, Energy, Innovation and Skills in developing the detail of its model.