10 Potential Commercial Structure and Contracting Strategies for Shortlisted Schemes
There are several commercial structure options which the respective councils can consider for procurement, ownership, and operation of the shortlisted energy systems. The preferred commercial structures for the shortlisted options are explored below based on the high-level information available.
Following the completion of the initial feasibility study, it is recommended that further stages of detailed project development (DPD) and an outline business case (OBC) are considered to fully explore the preferred commercial structures and delivery models.
10.1 Scottish Event Campus (SEC)
A council-owned Design, Build, Operate and Maintain (DBOM) contract may be a suitable commercial structure for the SEC project. There is a high degree of complexity associated with this district energy scheme due to the different low-carbon technologies proposed for the scheme therefore the council may prefer not to have a direct involvement in the DBOM. It is envisaged that the SEC centre will receive heat from a water-source heat pump (WSHP) via a district heating network (DHN). There will be renewable electricity generated on-site using roof-mounted solar PV. The renewable electricity will be consumed by the heat pumps and/or on-site consumers. Excess renewable electricity will be stored using an onsite electric battery. The battery will enable the SEC to participate in grid services, ensure security of supply for the site, and potentially reduce peaks in electrical demand. There is also potential for a council joint venture between the SEC and The Clydeside Distillery. The distillery is adjacent to the SEC site and they are currently assessing the feasibility of a high-temperature heat pump (HTHP).
10.2 Fortum Glasgow EfW
A Council Joint Venture (CJV) may be a suitable commercial structure for this project. Under this commercial arrangement, Fortum Oyj and Verus Energy's South Clyde Energy from Waste plant (EfW) would supply low carbon heat to the district heating network. The council could form an Energy Services Company (ESCo), a 50/50 joint venture with Fortum and Verus Energy. The council could potentially benefit in this arrangement by securing an attractively priced long-term supply of low-carbon heat for new and existing public buildings. This commercial structure has recently been demonstrated by Midlothian Council. Midlothian Council and Vattenfall formed an ESCo, a 50/50 joint venture which will provide low-carbon heat from the Millerhill EfW to the new Shawfair town.
10.3 Kilcreggan/Rosneath Low Carbon Heating - community scale
A council and an Energy performance Contract (EPC) provider could form an ESCo. The ESCo would be responsible for producing the investment grade proposal (IGP) detailing the Energy Conservation Measures (ECMs), energy savings guaranteed, tonnes of CO2 saved each year, capital costs, maximum payback period and a measurement and verification (M&V) plan along with a delivery plan. The mix of property tenure, construction, and age within the Kilcreggan and Rosneath town boundaries will impact upon the preferred commercial structure.
10.4 Former ExxonMobil Site Redevelopment
A council-owned Design, Build, Operate and Maintain (DBOM) contract could be a suitable commercial structure for the former ExxonMobil site redevelopment project. Of the 150-acre site, 45 acres will be developable land. The development will be predominantly office and industrial development. The council wish to examine the use of several LZC technologies in conjunction with building fabric energy efficiency measures.