The Corporate Director Communities reported on recent activity in relation to the Caerau Heat Scheme and sought approval to change the scope of the Caerau Heat Scheme and submit a re-profile of the project to the Welsh European Funding Office (WEFO).

The Corporate Director Communities reported that the Caerau Heat Scheme was established as a highly innovative project that proposed to extract heat from water contained within flooded former coal mine workings, to provide a resource for properties within Caerau.  The water would be transported via a network of pipes to the properties with the temperature being boosted to the residents required level by a ground source heat pump.  She stated that the innovative nature of the project had presented several challenges, most notably how to commercially use mine water as a resource, how to secure customers to a heat network largely serving the housing market and how to create a commercially affordable and viable project.  Cabinet at its meeting in June 2021 resolved to progress with a  blended option of a demonstrator mine water scheme, serving the school, and a heat network with an alternative heat source serving homes and a private wire connection from the wind farm. 

The Corporate Director Communities reported that further work was undertaken on the approved proposal in order to inform the re-profile of the project business plan to WEFO.  She stated that a number of challenges had been identified, which had yet to result in the re-profile being submitted, most notably, financial viability after the inclusion of business rates, domestic customer sign up to the heat network, meeting the project delivery target date of June 2023 and the delivery of a financially viable project.  She outlined an assessment of each challenge and detailed options suitable for progression, namely, to close the project or remove the Tudor Estate heat network element of the project and deliver a mine water demonstrator project with a private wire arrangement from the wind farm providing a lower cost supply of electricity to the heat pump at Caerau Primary School.  She stated that WEFO would need to agree that closing the project still aligned with the criteria of the funding and approval was sought for option B, to prepare and submit to WEFP a re-profile for a mine water demonstration project centered on the school using a heat pump and a private wire connection to the local wind farm. 

The Corporate Director Communities outlined the financial implications of the scheme cost and informed Cabinet that the re-profile, with a new set of figures would need to be presented to the Section 151 Officer for agreement ahead of submission to WEFO and a further report presented to Cabinet to update on the outcome of the WEFO re-profile and to outline next steps in respect of the scheme, including financial implications.   

The Cabinet Member Communities thanked the work of his predecessor, Councillor Young for his work in championing the project and he commented that option B should be pursued as it is a demonstrator project as it sits with the Council’s decarbonisation agenda. 

The Corporate Director Communities also informed Cabinet that the Coal Authority had shown a particular interest in this project as a decarbonised heat project which would be replicated across the former coalfields in England and Scotland. 

The Leader informed Cabinet that the position in relation to there being no exemption from business rates would be taken up with the Welsh Government for it to be re-considered as it currently affects the viability of the project.

RESOLVED:           That Cabinet:

·      Approved the change to the Caerau Heat Scheme as detailed in sections 4.8 and 4.9 of the report being to remove the Tudor Estate heat network element of the project and deliver a mine water demonstrator project with a private wire arrangement from the wind farm providing a lower cost supply of electricity to the heat pump at Caerau Primary School;

·      Delegated authority to the Corporate Director Communities, in consultation with the Chief Officer - Legal & Regulatory Services, HR & Corporate and the Section 151 Officer to agree and submit the Scheme re-profile to WEFO based on the changes to the Caerau Heat Scheme outlined in sections 4.8 and 4.9 of this report;

Noted that a further report would be presented to Cabinet following the outcome of the submission of the re-profile to WEFO.