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Mobilising Local Energy Investments in Greater Cambridge and Greater Peterborough UK - Low Carbon Hub (MLEI L-CIF)

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Technical assistance was provided to a consortium of 5 public authorities under the lead of Cambridgeshire County Council (CCoC) to set up a long term finance model/fund which aligns private and public sector investment to support low carbon infrastructure investment; set up appropriate delivery mechanisms and to deliver an investment programme of around €17m into renewable energy and energy efficiency projects.

Results

A Local Authority Fund has been developed and is operational since March 2014 and a Fund Development Strategy agreed. The Fund has contracted a total of €18.05 million of energy projects including a 12 MW Solar Park plus energy performance contracting for five secondary academy schools totalling, nine maintained schools and seven public buildings. Instead of deploying the EPC model, the project developed an off-balance sheet solution for public school.The Managed Service Agreement is a development of an off-balance sheet solution for academy schools (owned by central government) for energy performance contracting. This resulted from academies being unable to borrow money to invest in energy measures as this would add debt onto Central Government’s loan book. To solve this problem, the Council developed an innovative Managed Service Arrangement (MSA) to provide energy performance contracting services for academies in the format of an operating lease.  This works through Cambridgeshire County Council  contracting directly with the energy services company, then offering  a  Managed Service Arrangement (‘back-to-back- contract) with the academy.The project set up the Energy Investment Unit within Cambridgeshire County Council, which is a multidisciplinary team with the skills, knowledge and capacity is now in place to support project development and investment into energy projects across Cambridgeshire comprising technical (engineering skills primarily), financial, legal, procurement and project management skills and knowledge.The project accessed the Greater London Authority's RE:FIT 2 framework to deliver EPCs for schools and public buildings in the county. This avoided a lengthy and costly procurement process. The project facilitated access of other local authorities in the county to RE:FIT2 as well as the procured delivery body at county level. E.g. Fenland District Council developed investment grade proposals for four leisure centres totalling €1,000,000 in energy investments. The RE:FIT 2 framework is accessible to all public authorities in the UK.   Political support for the project has resulted in further finance committed into the Investment Fund beyond the intial €28 million and a portion of the Fund profits earmarked by Cambridgeshire County Council for the purposes of funding an Energy Investment Unit to continue the work on energy performance contracting for schools and public buildings.
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Lessons learned

Having a strong Vision for Energy is not enough to engage stakeholders and get buy-in to take the  vision forward. A more successful approach for Cambridgeshire has been to connect the energy agenda into housing, transport and digital infrastructure visions plus local asset  management strategies. This provides a broader influence and buy-in across a range of governance structures.Project development costs are an investment risk. There is a high drop out risk for projects. This means you need a reasonable pipeline of projects if you want to reach investment targets and scale. A large pipeline spreads development cost risk.For the Cambridgeshire MLEI Project, the Intelligent Energy Europe grant mitigated some of this risk but if this is not available it is important to plan carefully around projects.Setting up a Fund need not be complex. Don’t over engineer the Fund at the beginning or it won’t be fit for purpose. Get something up and running which can be refined and developed iteratively when the projects and market dictate. Starting small, learning and adapting the  model/mechanisms to deliver the bigger long term picture over time can be a more successful route than going big quickly.Please see the final publishable report for more in-depth information on lessons learned, results and conclusions.
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Contact

Cambridgeshire County Council
United Kingdom
Contact point: 
Name: 
Sheryl French
Tel: 
+44 01223 728552

Budget

In brief

Duration:
21/08/2012 to 20/08/2015
Contract number: 
IEE-11-MLEI-036

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