All board the “ESCo” train?

Even avid followers of Edinburgh City Council would be forgiven if they skipped past a report going to this week’s Policy committee entitled ‘Energy Services Companies’. The name does sound pretty dull but there is one sentence in the report that should be ringing bells at a time when the council, like all councils, is looking at a growing budget gap.

Back in 2010, I was at a Sustainable Scotland Network conference, where one of the buzz topics was Energy Services Companies (ESCos). Contributors were advising that for a host of reasons councils should be thinking about starting one of these. So I drafted a proposal that Edinburgh City Council agree to investigate further. After a bit of foot-dragging, the need for a report was agreed but that’s where it stalled. A change of political guard at the council and turnover among council staff seemingly held things up. But finally at the end of last year, after a bit more prompting, a working group got the promised report

And the report said, ‘a major benefit is the potential revenue that an ESCo could create providing a means of protecting future (Council) budgets’.

ESCos come in a whole variety of shapes and sizes but, thanks to recent enabling legislation, one of the very significant things they can do is simply invest in the generation and sale of energy. At a time of escalating fuel prices, big six monopoly and shrinking council budgets this has to be worth serious consideration.

Steve BurgegssA major challenge for Edinburgh City Council is that ESCos are a whole new ball-game and the possibilities are diverse, so to get going requires open minds, fresh thinking and perhaps additional expertise. But other UK councils are managing it, notably Southampton and Woking down south. Closer to home Aberdeen has been running a power company for 10 years and Glasgow Council announced its own ESCo last year (inspiringly labelled GLESCO – well done to whoever came up with that one!)

Back in the capital, our recent report is, in my view, disappointingly modest, focusing as it does on a couple of examples where housing associations and other partners are exploring ESCos to deliver energy solutions in particular locations. But this is not the ‘Edinburgh Renewable Energy Company’ on which I proposed action on a few years back.

The council might argue that it is actively pursuing community energy projects and it has my 100% backing in doing that. But the sheer scale of the opportunity is that there is plenty of space for both – indeed community energy projects and an ESCO working hand in hand.

So as we approach local authority budget day, next month, and in the next few years, being expected to reduce spending on services from support for children, or homelessness projects or transport for disabled people – I hope that a potential major source of new revenue will not continue to be overlooked. At a time when austerity is being imposed on councils from Westminster, because of budget cuts and amplified by the Scottish Government through the council tax freeze, council leaders should be grasping a source of significant additional income to stave off cuts to public services.

And that’s without even mentioning the possibility of supporting tenants with rising fuel bills and helping to meet targets for cutting climate-changing pollution.

At the European level, cities with ESCOs such as Munich and Berlin generate millions of Euros in direct revenue. These schemes are now expanding by investing in energy services projects in other cities and towns.

And where is Munich council looking to invest and reap rewards? Edinburgh, of course!