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PROJECT BUSINESS CASE1 Swansea Bay City Deal: the Internet Coast Homes As Power Stations

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PROJECT BUSINESS CASE1 Swansea Bay City Deal: the Internet Coast Homes As Power Stations Appendix B PROJECT BUSINESS CASE1 Swansea Bay City Deal: The Internet Coast Homes as Power Stations Version 4.0 March 2020 1 ‘Project Business Case’ is the terminology used in the Joint Committee Arrangements. Page 1 of 132 Confidentiality Statement Information in this document must be kept confidential and in accordance with the rules of disclosure. This document is uncontrolled if printed. Page 2 of 132 Distribution List Organisation Position Name Value People Director Stefan Sanchez Homes as Power SRO Gareth Nutt Stations Nicola Pearce City & County Director Martin Nicholls Swansea Carmarthenshire Director Wendy Walters County Council Pembrokeshire County Director Steven Jones Council Cardiff University, Phil Jones Welsh School of Architecture Revision History Date Version Modified by Changes Made, review history 29.06.2018 0.1 Bill Harkins - First draft Value People 13.07.2018 1.0 Lisa Willis – Updates to CC and FC after NPTCBC review Stefan Sanchez & Bill Harkins - Value People 07.08.2018 1.0 Lisa Willis Regional input Feb 2019 FBC 1.0 Lisa Willis OBC to FBC Nov 2019 FBC 2.0 Lisa Willis Additional information required by policy workshop March 2020 FBC 3.0 Lisa Willis ESB comments March 2020 FBC 4.0 Lisa Willis Regional Directors comments Page 3 of 132 Document Sign Off Date Version Signed off by Comments 07.08.2018 1.0 Gareth Nutt Incorporated regional partner comments Feb 2019 FBC 1.0 Gareth Nutt OBC to FBC Nov 2019 FBC 2.0 Gareth Nutt Additional information required by policy workshop March 2020 FBC 3.0 Nicola Pearce ESB workshop comments – comments March 2020 BC 4.0 Nicola Pearce Regional Directors meeting comments C&C Swansea revisions Page 4 of 132 Table of Contents Table of Contents Confidentiality Statement ................................................................................................... 2 Distribution List .................................................................................................................... 3 Revision History ................................................................................................................... 3 Document Sign Off .............................................................................................................. 4 Introduction ................................................................................................ 7 Executive summary ................................................................................... 9 Strategic Case .............................................................................................................................. 9 Economic Case ........................................................................................................................... 12 Commercial Case ....................................................................................................................... 12 Financial Case ............................................................................................................................ 14 Management Case ..................................................................................................................... 14 Strategic Case .......................................................................................... 16 Economic case ......................................................................................... 78 Economic Case Part 1: The Options Framework .................................................................. 79 Economic Case part 2 – cost benefit analysis ....................................................................... 96 Commercial Case ................................................................................... 100 Financial Case ........................................................................................ 107 Management case .................................................................................. 113 Annex 1 – Letters of support ............................................................... 124 Annex 2: The benefits of Programme and Project Management .. 125 Annex 3 – Business case approval process ..................................... 127 Annex 4 – Outline Stakeholder Plan ................................................... 128 Annex 5 - HAPS specifications ............................................................ 131 Annex 6 – Housing need and demand ............................................... 132 Page 5 of 132 Acronyms Description HAPS Homes as Power Stations SBCR Swansea Bay City Region SBCD Swansea Bay City Deal ‘the partners’ The local authority partners comprising the Swansea Bay City Region: Neath Port Talbot CBC, City and County of Swansea, Carmarthenshire County Council and Pembrokeshire County Council Page 6 of 132 Introduction The Swansea Bay City Region ‘Internet Coast’ deal will establish the Homes as Power Stations (HAPS) regional project, led by Neath Port Talbot County Borough Council, on behalf of the four local authority partners in the Swansea Bay City Region: Neath Port Talbot County Borough Council, City and County of Swansea, Carmarthenshire County Council and Pembrokeshire County Council. The Homes as Power Stations project has been developed in response to a number of drivers: . UK and Welsh Government policy to tackle climate change and meeting carbon emission reduction targets; . The need to deliver low carbon, energy efficient homes to reduce fuel poverty and its impact on health and wellbeing; . Energy efficiency and demand side management is needed to reduce energy costs and provide affordable warmth for housing. The HAPS project is a pioneering project to facilitate the adoption of the HAPS approach i.e. energy efficient homes, to integrate energy efficient design and renewable technologies into the design of new build homes and retrofit programmes carried out by the public, private and third sectors. The project aims to encourage the HAPS approach to become mainstream in new build design and retrofit programmes. The project will target both new build developments and the retrofit of existing buildings. The project aims to promote the benefits of energy positive homes, initially through the public-sector housing stock and after proving the process and financial measures, target rollout to private sector landlords and owner-occupiers. Energy retrofits will be linked to other housing improvement programmes to optimise efficiency of delivery. There will also be a focus on regional supply chain development, skills development, an education / dissemination programme and a financial incentive fund. The Homes as Power Stations project is a regional activity and aims to ‘prove’ the HAPS concept in the public sector at relatively small scale with the intention of scaling up activity across the region and sectors as shown in the following figure: Page 7 of 132 This business case is structured in accordance with HM Treasury’s revised Green Book2 and the Better Business Cases guidance, organised around five cases designed to systematically demonstrate the investment proposal: . Is supported by a compelling case for change – the Strategic Case . Optimises value for money – the Economic Case . Is commercially viable – the Commercial Case . Is financially affordable – the Financial Case . Is achievable – the Management Case This business case confirms the indicative funding envelope of £15 million of Swansea Bay City Deal investment to deliver the project. Formal approval of this business case will enable project definition to commence to prepare for the Homes as Power Stations project and the business case describes the outline project management arrangements. 2 The Green Book: Central Government Guidance on Appraisal and Evaluation: https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-governent Page 8 of 132 Executive summary Strategic Case The primary and overarching strategic driver for the HAPS project is the Swansea Bay City Deal ‘Internet Coast’ investment programme which was signed in March 2017 by the UK Government, Welsh Government, and the four local authorities of the Swansea Bay City Region. The ‘Internet of Energy’ is a key theme within the Swansea Bay City Deal Internet Coast Investment Programme. This commitment is underpinned by the availability of funding and a range of national, regional and local strategies which confirm the strength of strategic drive for action in this area, in particular: . The need to meet the UK’s clean energy challenges with a focus on the need to address climate change and carbon emissions linked to housing to deliver the decarbonisation agenda . The need for clean, affordable and secure energy . Addressing climate change through delivering carbon neutral alternatives, in line with the decarbonisation agenda . Improving health and well-being . Tackling fuel poverty . Ensuring people have the necessary skills which reflect the broad nature of the renewables sector In response to the above drivers, it is proposed that the HAPS project will: . Facilitate the adoption of the HAPS approach in new house build developments and housing retrofit programmes which integrates new technologies and design features to allow buildings to generate, store and potentially release energy; . Develop and seek to attract new sector supply chains incorporating leading research and high value manufacturing and construction operations; . Help to generate sustainable and affordable homes and address fuel poverty and improve health and wellbeing; . Focus on smart technologies
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