By Matt Jarram, Local Democracy Reporter
Nottingham City Council has revealed the amount of money needed to maintain an energy company it has decided to take in-house.
The Labour-run authority decided to liquidate and take in-house EnviroEnergy last year – a company it has owned since 2001.
Capital programme works have been revealed as part of budget papers prepared for a council meeting on Tuesday, February 22.
EnviroEnergy provides heating and hot water to around 5,000 homes in St Ann’s and 70 commercial businesses, including the Motorpoint Arena.
The council pays to have its non-recyclable waste burnt at Eastcroft incinerator on London Road.
Power generated by the incinerator’s steam is then sold on to customers in St Ann’s by EnviroEnergy.
The council says the company saves the authority £5m a year by reducing the amout of waste it has to take to landfill.
The leader of the Labour-run authority, Cllr David Mellen, described the in-house move as “the best way forward.”
The transfer cost taxpayers an anticipated £500,000.
But the council says it needs to spend millions of pounds to ensure it can continue to provide services to EnviroEnergy’s 5,000 existing customers.
The council said closing down the EnviroEnergy heating system was not an option as the complexity of the infrastructure means its 5,000 customers cannot immediately receive energy from other providers.
Papers prepared for the Executive Board meeting on Tuesday, February 22, explain the cost of maintaining the network.
A total of £7.8m will need to be spent on Eastcroft incinerator up to 2026/7 as well as £17.3m on the maintenance of the heating network.
The paper explains: “The council has a range of companies in its ownership and some owned jointly with others that have developed over time.
“Many of these companies have experienced trading difficulties mainly arising from the ongoing economic impact of Covid-19 on business models.
“A significant amount of work on companies has been undertaken.
“EnviroEnergy has been brought in house to the council and other company structures are under review.
“Specialist financial expertise has been brought in to review the company structures and to make recommendations to the council. This work is still ongoing and will conclude in 2022/23.”
The EnviroEnergy work will be part of the council’s capital programme.
It comes at a time when the council is being watched by government over the failure of Robin Hood Energy – a council company which went bust in January 2020.
Its collapse cost taxpayers an anticipated £38m.
For EnviroEnergy, the council says capital works are required to maintain the Eastcroft Incinerator, which is a contractual commitment for the council.
The reduction in maintenance over time reflects the linked contract expiring in 2030/31.
The council also says it has a contractual obligation to its network and heat station. This maintenance will come from capital receipts – which includes the sale of land and buildings the council no longer requires.
The money will include maintaining EnviroEnergy’s network to minimise service failure and disruption to domestic and commercial customers.
The council says following the decision to bring EnviroEnergy in-house it is responsible for “maintaining the current heating at least until 2030/31.”
A city council spokesman said: “The district heating network started operating in the 1970s and so needs ongoing repairs and maintenance to be carried out.
“The programme of works over the next four to five years involves a wide range of activity – from small jobs such as filter replacements to larger projects including sub-station replacements – which will help to keep the system running efficiently.
“These costs are what we would expect with a system of its size and age and so represent the affordable capital investment needed over this period.
“It means the energy-from-waste produced can continue to heat and power local homes and businesses and play a part in Nottingham’s efforts to become carbon neutral by 2028.”
