Agenda item

A report seeking approval to accept £8.7m grant funding for implementation of the Oldham Low Carbon Heat Network, as part of the Oldham Green New Deal Delivery Partnership programme.

The Cabinet received a report of the Deputy Chief Executive (Place) that sought acceptance of £8.7m grant funding for implementation of the Oldham Low Carbon Heat Network, as part of the Oldham Green New Deal Delivery Partnership programme.

Cabinet was reminded that in March 2020, the Council had formally adopted the Oldham Green New Deal Strategy (OGNDS), Oldham’s climate change mitigation strategy which had a specific focus on securing the co-benefits of investment in low carbon infrastructure, in particular jobs and training opportunities for Oldham residents in the growing Green Technology and Services (GTS) sector.

The OGNDS set two challenging carbon neutrality targets – for Council Buildings and Street Lighting (by 2025) and for Oldham Borough (by 2030). These targets were set within the context of the 2038 carbon neutrality target for Greater Manchester City Region that was set out in the Greater Manchester 5-year Environment Plan.

The OGNDS sets out the approach for achieving the 2030 borough-wide carbon neutrality target, as follows:

a.    Leading a strategic partnership of major energy users across all sectors in Oldham to achieve carbon neutrality within the partnership and demonstrate community leadership.

b.    Developing a Local Energy Market to incentivise renewable energy development in the borough and cut energy bills for local residents and businesses.

c.    Investing in, and supporting the development and roll-out of, large-scale low carbon anchor energy infrastructure such as low carbon heat networks.

d.    Supporting the development of the GTS sector across the borough and support and incentivise the wider business community to de-carbonise.

e.    Maximising the local benefits from Greater Manchester and national level schemes which aid de-carbonisation, including in the areas of Air Quality, Transport, Waste and other key priority sectors, securing inward investment for ‘clean growth’ from public and private sectors.

The Cabinet was advised that on 30^th November 2023, Greater Manchester Combined Authority (GMCA) had been notified that the consortium application had not been successful in securing Innovate UK funding. However, GMCA was notified that a direct award would instead be made from the Department for Energy Security and Net Zero (DESNZ) for up to £7m instead of the £5.5m applied to Innovate UK for, via a new programme called the Local Net Zero Accelerator programme, for implementation of the GMCA/Oldham/Manchester three-tier delivery model demonstrator originally submitted to Innovate UK, with a condition that GMCA also include additional work.

Oldham’s part of the project, to implement an Oldham Green New Deal Delivery Partnership, remained part of the programme and so the Council expected to receive up to £1.5m from this fund via GMCA. However, GMCA must first submit a Business Case to the Greater South-East Net Zero Hub who are the administrator for the DESNZ funding in order to receive the grant. The grant funded period ends on 31^st March 2026. The Council was expected to sign a grant agreement with the GM Combined Authority for disbursal of the DESNZ grant. This report is therefore requesting delegated authority to accept this grant once it has been confirmed by GMCA – this delegated authority will enable the Council to mobilise quickly once the grant is confirmed to meet the delivery timescale ending March 2026.

The Council had been successful in securing £1m of revenue funding and £7.7m of capital funding from the Green Heat Network Fund, from its application for grant funding to support delivery of the Oldham Low Carbon Heat Network. The £1m of revenue funding was to cover the cost of taking the heat network scheme from RIBA Stage 2 to RIBA Stage 3 design (“Commercialisation”) and also the drilling of test boreholes for the mine-water heating resource at the Rhodes Bank site.

Options/Alternatives considered:

Option 1: Do not accept the grant funding. Under this option, the Council would not proceed with implementation of an Oldham Green New Deal Delivery Partnership and would not progress further the Oldham Low Carbon Heat Network.

Option 2: to accept the grant funding. Under this option, the Council would proceed with implementation of an Oldham Green New Deal Delivery Partnership including the delivery of the Oldham Low Carbon Heat Network.

Preferred Option: Option 2: To accept the grant funding. Under this option, the Council would proceed with implementation of an Oldham Green New Deal Delivery Partnership including the delivery of the Oldham Low Carbon Heat Network.

Resolved:

That the Cabinet:

1.    Authorisesthe he acceptance of £8.7m grant funding (£1m revenue and £7.7m capital) from the UK government Green Heat Network Fund, for implementation of the Oldham Low Carbon Heat Network.

2.    Authorises that delegated authority to accept up to £1.5m grant funding, from the DESNZ Local Net Zero Accelerator programme via GMCA (subject to Business Case being agreed between GMCA and DESNZ), be granted to the Deputy Chief Executive (Place) in consultation with the Leader of the Council and Cabinet Member for Finance and Corporate Resources, and Directors of Finance, Legal Services and Economy.

3.    Authorises that delegated authority to appoint consultants and contractors for the grant funded works and services, be granted to the Deputy Chief Executive (Place), in consultation with the Leader of the Council and Cabinet Member for Finance and Corporate Resources, and Directors of Finance, Legal Services and Economy

4.    Authorises that delegated authority be granted to the Director of Legal Services, or his nominated representative, to sign and/or affix the Common Seal of the Council to all contractual documentation and associated or ancillary documentation referred to above and/or required to give effect to the authorisations, delegations and recommendations in this report.