It is increasingly acknowledged that public financing alone is insufficient for delivering net zero. Private finance must also be secured to deliver decarbonisation at scale and pace. Bristol City Council has introduced a ground-breaking procurement model in its Bristol City Leap project which aims to achieve city-wide net zero by securing such investments. This initiative involves a concession agreement with Ameresco Ltd, an energy service company, to deliver investments of £424 million by 2030 through a public private partnership.
However, such contracts and the resulting partnerships are not without controversy, as evidenced by the contentious sale of the district heating network formerly owned by Bristol Holding Ltd, a council-owned company, to Ameresco’s subcontractor, Vattenfall Heat UK. This sale also included the transfer of Bristol Energy Service staff from the Council to Ameresco, with all heat network staff subsequently seconded to Vattenfall to work on existing and new projects.
The contractual framework at the core of this public-private partnership model for decarbonizing Bristol contains elements of an energy service contract. Such contracts combine various strategies that enable businesses to tap into underutilized energy efficiency, energy service delivery, and renewable energy generation potentials.
In the case of Bristol City Leap, it involves risk-sharing and distribution, and outsourcing of responsibility regarding the energy efficiency of the council estate and council-owned housing, associated heat provision, as well as electricity production, transformation, and management procedures. By outsourcing these responsibilities to a specialised energy service company, the Council seeks to attract the skills and investments necessary for infrastructure upgrades, replacements, and construction projects. Success in this endeavour depends on reducing transaction costs and minimizing risks throughout the procurement, contract management, and delivery processes.
If transaction costs and risks can be effectively mitigated, such concession contracts targeting city-wide net zero delivery stand as a viable strategy to attract investments into public energy demand reduction and carbon emission reduction programs.
Drawing on qualitative research findings, this policy brief delves into the innovative procurement approach underpinning Bristol City Leap, which addresses the urgency of decarbonization through a unique public-private partnership on a city-wide scale. It is based on an interdisciplinary approach, examining the complexities through the lens of public policy, law, social sciences, geography, economics, and business, with a particular focus on exploring the risks and opportunities involved in procuring such large-scale city infrastructure investment programs through public-private partnerships.