Local authorities power a low-carbon future

From Bris­tol to Leeds, Swansea to Man­ches­ter and Not­ting­ham to Edin­burgh, local author­i­ties are fac­ing one of their biggest chal­lenges in decades; how to finance projects to solve cli­mate change at a local lev­el as they tran­si­tion to a low-car­bon future for their com­mu­ni­ties.

Many have pledged to shift to 100 per cent clean ener­gy by 2050 to reduce air pol­lu­tion and cut relat­ed deaths, while ush­er­ing in new ener­gy-effi­cient mea­sures across homes, busi­ness­es, trans­port and infra­struc­ture.

How­ev­er, cen­tral gov­ern­ment fund­ing for such inno­v­a­tive ini­tia­tives can’t ever finance the num­ber of projects on the table, lead­ing to cash-strapped coun­cils seek­ing devel­op­ment cap­i­tal from the pri­vate sec­tor.

Such green finance ini­tia­tives are now increas­ing­ly recog­nised as a lucra­tive choice by pri­vate investors, but there is still a lack of con­fi­dence, often due to issues over mar­ket clar­i­ty, along­side incon­sis­tent gov­ern­ment pol­i­cy and ever-chang­ing reg­u­la­tion.

As direc­tor of UK100, Pol­ly Billing­ton heads a net­work of more than 100 local author­i­ties com­mit­ted to the 2050 pledge. Her organ­i­sa­tion’s mem­bers col­lec­tive­ly cam­paign for greater cen­tral gov­ern­ment assis­tance for local clean ener­gy while shar­ing best prac­tice.

She says: “Local author­i­ties’ bud­gets are tight, but their com­mit­ment to act­ing on cli­mate is strong. They want to see that invest­ment in rebuild­ing the econ­o­my is aligned with meet­ing our net-zero tar­get as a coun­try and are keen to devel­op part­ner­ships with the pri­vate sec­tor to make it hap­pen. But they strug­gle with capac­i­ty and know-how.”

To com­bat this, UK100 is back­ing the idea of a net-zero devel­op­ment bank to work with local projects to gain pri­vate finance. Billing­ton adds: “With­out this kind of savvy deploy­ment of tax­pay­ers’ mon­ey to give the pri­vate sec­tor con­fi­dence, we could miss our cli­mate tar­gets and the huge oppor­tu­ni­ty to rebuild our coun­try in a way that leads the world in cli­mate action and ben­e­fits the peo­ple who live in our com­mu­ni­ties.”  

Local authorities lead in energy efficiency

From coun­ty coun­cil to city coun­cil and among com­bined author­i­ties, the col­lec­tive will, if not the fund­ing, is there to make clean ener­gy a real­i­ty.

In its lat­est report, Accel­er­at­ing the Rate of Invest­ment in Local Ener­gy Projects, UK100 says there is poten­tial to unlock more than £100 bil­lion of invest­ment in local ener­gy sys­tems by 2030 through part­ner­ship approach­es, but this requires £5 bil­lion of ini­tial devel­op­ment fund­ing.

Projects include bat­tery stor­age, an increase in renew­able fuels, elec­tric vehi­cles (EVs), and heat-led projects in homes and work­places.

In Bris­tol, the first UK city to declare a cli­mate emer­gency, a num­ber of pilots are under­way through its City Leap plan, which aims to com­bine sig­nif­i­cant pri­vate invest­ment with inno­v­a­tive projects and com­mu­ni­ty-led ini­tia­tives.

May­or of Bris­tol Mar­vin Rees says: “In Bris­tol’s One City Cli­mate Strat­e­gy we have mapped out the invest­ment oppor­tu­ni­ties that will help cre­ate car­bon-neu­tral ener­gy and trans­port sys­tems. Cities like Bris­tol are a cat­a­lyst to help facil­i­tate invest­ment by the pri­vate sec­tor.

“We have devel­oped our pio­neer­ing City Leap ini­tia­tive to cre­ate an ener­gy part­ner­ship which will attract over £1 bil­lion in invest­ment to help cre­ate a car­bon-neu­tral Bris­tol by 2030.

“In recent years we have invest­ed around £60 mil­lion in sus­tain­able projects, includ­ing the devel­op­ment of our own wind tur­bines, the intro­duc­tion of a low-car­bon heat net­work, estab­lish­ing an EV charg­ing infra­struc­ture and ener­gy effi­cien­cy upgrades to more than 10,000 social homes.”

At Cheshire Ener­gy Hub, £700,000 of gov­ern­ment fund­ing has deliv­ered E‑Port, a low-car­bon smart ener­gy sys­tem in the Ellesmere Port area, with pri­vate part­ners adding an addi­tion­al £230,000 to meet total costs. Those behind the project say the blue­print could gen­er­ate invest­ment of £100 mil­lion in the region by 2025.

Ged Bar­low, Cheshire Ener­gy Hub chair, explains: “UK indus­try has reached a crit­i­cal phase in its jour­ney to net zero. In the North West we are begin­ning to see ear­ly signs of ini­tia­tives such as pub­lic-pri­vate co-invest­ment in low-car­bon infra­struc­ture, pub­lic sec­tor under­writ­ing of indus­try’s low-car­bon invest­ment, sim­pler and more sup­port­ive plan­ning regimes to sup­port low-car­bon tech­nol­o­gy, and a more holis­tic approach from indus­try and local gov­ern­ment.

“They are work­ing in part­ner­ship to attract low-car­bon invest­ment from nation­al gov­ern­ment and heavy­weight insti­tu­tion­al ener­gy infra­struc­ture investors.”

Harnessing the private sector for a green recovery

In Leeds, city coun­cil leader coun­cil­lor Judith Blake says pri­vate invest­ment will be essen­tial, espe­cial­ly when it comes to decar­bon­is­ing the city’s hous­ing and trans­port.

“Local author­i­ties like Leeds can be very effec­tive at mak­ing the case for, and help­ing to facil­i­tate, change-mak­ing pri­vate invest­ment, but only if mar­kets are recep­tive and there is a case to be made,” she says.

Inter­est does appear to be grow­ing. Ear­li­er this month, chan­cel­lor Rishi Sunak announced plans to issue the gov­ern­men­t’s first Sov­er­eign Green Bond in 2021, sub­ject to mar­ket con­di­tions, and Labour has called for greater green invest­ment to cre­ate hun­dreds of thou­sands of new jobs.

Banks are on board too, with Bar­clays set­ting a tar­get of pro­vid­ing £100 bil­lion of green financ­ing by 2030.

Siemens Great Britain and Ire­land is a pri­vate com­pa­ny invest­ed in the project. Writ­ing in the UK100 report, its chief exec­u­tive Carl Ennis says: “There is an urgent need to scale up local ener­gy invest­ment across the UK if we are to have any chance of meet­ing net zero by 2050. This requires a nation­al effort with gov­ern­ment, busi­ness and the pub­lic all play­ing their part.”

Coun­cil­lor Sal­ly Long­ford, deputy leader of Not­ting­ham City Coun­cil, which has the ambi­tion to be the first car­bon-neu­tral city in the UK by 2028, con­curs. “Green invest­ment is crit­i­cal to facil­i­tat­ing this shift, enabling risk to be shared across the pri­vate and pub­lic sec­tors, but cru­cial­ly enabling inno­v­a­tive tech­nolo­gies and solu­tions to be deployed, stim­u­lat­ing new green jobs and the low-car­bon econ­o­my,” she con­cludes.