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United Kingdom-Bristol: Energy and related services
Section I: Contracting authority/entity
Section II: Object
City Leap Energy Partnership
Bristol City Council is seeking to appoint a strategic partner to form a long term corporate joint venture with the Council, the City Leap Energy Partnership, to provide and secure low-carbon energy-related investment and expertise to deliver City Leap’s Strategic Objectives. The City Leap Energy Partnership will provide opportunities for the development, construction, and financing of low-carbon energy-related projects and delivery of associated services to assist with meeting Bristol’s carbon neutrality targets and potentially those of other Local Authorities in the South West region.
In May 2018, the Council released the City Leap Prospectus (http://www.energyservicebristol.co.uk/prospectus/) as part of a soft market testing exercise, 180 Expressions of Interest were received from a wide range of organisations. Following an internal options appraisal a recommendation to establish a joint venture company with a strategic partner (which could be a consortium of organisations) was made to and approved by the Council’s Cabinet on 2.4.2019. The Council is embarking on a process to appoint a strategic partner to form a long-term joint venture with the Council, the City Leap Energy Partnership, in order to secure substantial low carbon infrastructure investment and delivery capability.
As part of its role in the City Leap Energy Partnership, in addition to providing finance and investment for the City Leap opportunity, the strategic partner will be expected to provide commercial support and technical expertise to assist with the origination, development, delivery and facilitation of low carbon energy-related assets and services. It is anticipated that these services may be provided to public bodies other than the Council across the South West region.
The Council is seeking a strategic partner who is willing to work in partnership with a broad range of organisations, including those working in Bristol’s community energy and sustainability sectors as well as other public bodies, to facilitate the delivery of low carbon energy projects on a city-wide and, potentially, regional basis.
It is anticipated that the City Leap Energy Partnership will comprise a joint venture company with potentially 2 immediate subsidiaries:
1) Bristol Energy Ltd — which, as well as being an energy supplier, will provide project origination, delivery and operation (but not ownership) of energy assets; and
2) An asset-owning structure/fund vehicle — which will hold shares in asset-owning SPVs (those SPVs will, in turn, own the assets deployed under City Leap — existing and future).
The structure of the City Leap Energy Partnership (including subsidiaries, formal corporate linkages, funding structures and governance arrangements) will be developed in conjunction with bidders during the tender process, particularly in relation to the nature of asset-owning structures and any associated investment fund that may be proposed by the bidders during the process or is linked to for the purpose of providing investment funding for City Leap.
The Council will consider proposals to enhance the initial model outlined above provided that these proposals meet the Council’s key criteria and deliver City Leap’s Strategic Objectives. Further information will be provided to bidders on these matters during the tender process.
The Council expects to play an active role in delivering City Leap, including the contribution of certain low carbon energy-related assets (e.g. the Council’s wind turbines and solar assets), and the provision of opportunities for the City Leap Energy Partnership to access the Council’s estate (e.g. land and buildings) for the purposes of delivering low carbon energy-related projects. It is anticipated that other local authorities in the South West region may play a similar role in contributing both assets and opportunities.
The Council currently expects that the method of admitting the strategic partner into the City Leap Energy Partnership will be for the strategic partner to invest in a 50 % share of the City Leap Energy Partnership, whereby potential bidders will take into account the value of the assets and opportunities expected to be contributed by the Council at the outset of the partnership when establishing the value of their bid for a 50 % share of the City Leap Energy Partnership. Further information on all aspects of the opportunities and services will be provided in the procurement documents.
Section III: Legal, economic, financial and technical information
Section IV: Procedure
Section VI: Complementary information
Since 2005, Bristol City the Council has delivered a wide programme of energy efficiency and investment initiatives, investing tens of millions of pounds in renewable energy generation and energy efficiency. The Council and its wholly-owned energy supply company, Bristol Energy, are now moving forward with a number of innovative pilot projects that will help inform the build-out of the city’s future smart energy system. This, coupled with the city’s thriving community energy scene and a wealth of socially responsible organisations, is just one of the reasons why Bristol is internationally recognised as a leading energy city in the UK.
Building on all that Bristol has collectively achieved to date, the Council wishes to substantially increase the pace and scale of delivery through its City Leap initiative to help Bristol deliver its carbon neutrality ambitions, and potentially those of other local authorities within the South West region. City Leap aims to strategically develop, co-ordinate, facilitate, finance and deliver a smart, low-carbon, interconnected energy system; 1 that leverages the Council’s assets and expertise and potentially those of other local authorities, to deliver action at a city-wide and regional scale, resulting in clean, affordable energy for its people, communities and companies as well as securing the broad range of social, environmental and economic benefits for the City and potentially the South West region, that can be obtained from a transformed energy system.
The estimated values given at 11.1.5 and 11.2.6 are based on the potential estimated commercial revenues of anticipated projects and services to be developed under the City Leap Energy Partnership. The estimated values exclude the estimated commercial revenues generated by Bristol Energy Ltd from the sale of gas and electricity to domestic and commercial customers.
The ultimate revenues will depend on many factors, including (without limitation) the term of the contract, speed of project origination and delivery, ability of the strategic partner to deploy investment, market conditions and whether other local authorities in the South West region participate. Bidders are advised to seek independent professional advice in relation to the potential value of the opportunity and the scheme as a whole.
The Cabinet Report dated 2.4.2019 contains further information relating to the proposed City Leap Energy Partnership and can be accessed here:
Interested economic operators are invited to register their interest by completing and returning the selection questionnaire, which it is anticipated will be made available on ProContract under project DN432910 on or around week commencing 30.9.2019. Qualifying respondents to the selection questionnaire will be asked to sign a non-disclosure agreement before being provided with further procurement documentation.
Subject to the publication of the selection questionnaire in the week commencing 30.9.2019, a briefing event will be held on 8.10.2019 in Bristol. Interested economic operators, who are registered with ProContract and would like to attend, are invited to email: firstname.lastname@example.org to request attendance at the briefing event. Attendees will be limited to 2 participants per organisation and all attending organisations must be registered on ProContract.
For the avoidance of doubt, it is anticipated that the procurement process will involve multiple stages, including negotiations, to enable a gradual reduction in the number of solutions discussed or tenders to be negotiated.