RE/SOURCED Journal 2

RE-SOURCED Leadership is strong. 

The MUA is a stable organisation, it has the respect of the other partners and it is retaining a good and appropriate oversight of project delivery.

The MUA keeps to the key meeting schedules as set out in the application, although more of the meetings have had to be delivered on-line given COVID19 restrictions and the stakeholders’ changed working practices.

Delays are highlighted early and openly and the MUA uses the views and skills of the whole partnership group to find solutions.

The MUA takes the lead on key issues and other partners are happy to support. Examples would be the DG Energy Interpretative Question and more recently, the optimum design for the business model of the cooperative (Energy Community) that will manage the facility once constructed. Partners’ expertise is utilised and the project direction is discussed with partners, keeping them on board.  This was the principal influence for the Red Challenge Level rating in the first Journal – The MUA had to dedicate significant Leadership resource to addressing the challenge of the use of the Regulatory Sandbox being blocked and other regulatory hurdles posed by key energy system stakeholder organisations.  If the MUA had not dedicated this effort, taken the initiative to pose the Interpretative Question to DG Energy, this clarification would not have been received and the project would likely have stalled.  Approaching DG Energy formally with a professionally presented and detailed Interpretative Question showed local stakeholders that the MUA and partners were strongly committed to implementing the project.  DG Energy’s response also gave RE/SOURCED a clear mandate to approach Flanders-based stakeholders and encourage them to take the project seriously.  This has been a critical role that was essential for successful delivery.

REScoop.eu is a recognized leader in the design and development of energy cooperatives in Europe.  It is also a member of the RE/SOURCED partnership. It is working on the governance and legal frameworks with the support of the MUA and other partners.  These frameworks will form part of the system blueprint.

The system Blueprint for the Energy Cooperative is delayed - this delay has been caused by the delays in finalizing the overall system design and the lack of agreement amongst Energy system stakeholders in Flanders on the use of a Regulatory Sandbox.

As mentioned in Journal 1, public procurement is not always well suited to procuring novel or innovative products and services as these are harder to specify accurately. In the case of RE/SOURCED, there is the added dimension of ensuring that the procured goods and services meet the core “circularity” aims of the project.  Making circularity a central focus is particularly novel for a project of this kind and it has impacted on the deliverability of the process.  The partnership has concluded that the market is not yet ready to respond to “circular” tenders that require bills of materials, life cycle assessments of infrastructure etc to be included in tender submissions.

Taking the challenge of incorporating circularity into the process, public procurements are proceeding reasonably well, especially for those items whose tender designs were not dependent on the outcome of discussions around the viability of using a Regulatory Sandbox.

There have been some delayed tenders which have been due to the challenges of the post COVID19 “market” where suppliers of key items were in high demand and often did not reply to tender invitations – an example would be the pumped storage technology.  Here, the suppliers deemed the opportunity to be too small to warrant a tender, especially as their commercial opportunities grew more significantly.

Other tenders have been issued and responses received as planned, albeit with some accommodation around the circularity requirements.

Post COVID19 price increases have been impactful and significant for the project.  This has been commonplace across all civic society and commercial markets.

The main construction infrastructure tenders have been issued as have the tenders for the PV arrays and the wind turbine.  This is viewed as a notable success as construction tenders have been particularly problematic across both public sector and commercial markets given the current high levels of inflation and market uncertainty caused by the conflict in Ukraine.  Firms are unwilling to commit to a fixed price contract for delivery timescales in the future given that COVID19-related raw material shortages have driven-up prices and this phenomenon is projected to continue to the future.

The design of the technical and physical infrastructure is influenced by the overall system design - it, in turn, is governed by what is allowable by the regulator (VREG) and the DSO (Fluvius). Until the specification the Regulatory Sandbox is finalised and the Regulator, DSO and Government agree to its use and specification, the system design cannot be finalised.  This is what is causing the knock-on delays to the procurement of other inputs.

While the tender for the prime construction contractor has been issued, individual construction tenders have been delayed due to discoveries of poor ground conditions.  Ground investigations at the site of the proposed car park (and associated solar array) identified buried waste (slag) which is unsuitable for load bearing structures. This has complicated the tender procedure as it introduces an uncertainty for the contractor.

Complementing the strong project Leadership noted above, Organisational Arrangements are good.

The partnership is well balanced in terms of the specialist inputs that are required to deliver a project of this kind.  The partnership is also broadly based, with individual partners having responsibility for specific work package elements.

It is clear that all partners are contributing to the delivery.  The RE/SOURCED partnership comprises a mix of skills sets comprising technical, market/end user, operational and educational. These areas of expertise have been invaluable to the MUA in preparing robust tender documents for the various work packages.

The MUA is proactive in organizing partnership meetings and is particularly well linked to other local and regional urban development stakeholders.  As set out in Journal 1, being an intermunicipal association that has the buy-in of local municipal partners complements its role as the MUA.  The MUA brings individual partners together while also ensuring that each partner takes forward and leads its areas of responsibility.

Where a partner cannot deliver an input as planned, the MUA will work with them to refine the brief/scope if this is possible – or if not, will be proactive in designing a different approach.  The relationships between partners and the regular meetings organized by the MUA help to maintain communication channels.  That said, communications are very good within the partnership and its members seem proactive.

The MUA uses the expertise of the partnership to deliver the project. RE/SOURCED is a complex multi-faceted project requiring a broad range of skill sets. 

Partners are involved in contributing their specialist skills to Public Procurement tenders – both in terms of designing the tender specifications and selecting the successful bidders.

The MUA is also proactive in working with partners to develop collaborative approaches to implementation.

The original proposal included the possibility of working with ASTER, (Access to Sustainability Through Energy Effective Retrofit), an initiative of the Association of Flemish Social Housing Companies (VVH) as a means of engaging social tenants in the renewable Energy Community.  Due to difficulties gaining clarity on the use of the Regulatory Sandbox and its scope, scheduling a cooperation with ASTER is proving impossible, although something the project may do in the future.  For now, the project is not pursuing this potential collaboration.

Journal 1 presented a Logic Model for the project.

There have been significant difficulties encountered when attempting to implement the project associated with regulatory constraints and stakeholder challenges as outlined above (particularly the use of the Regulatory Sandbox).  The MUA is aware of the impact these have had on the delivery of the required outputs and has reflected them in their feedback to UIA.

The project indicators mostly relate to outputs that will be delivered towards the end of the project. The measurement of the proposed indicators is dependent on key elements of the project being implemented. For example, indicators relating to the materials bank can only be assessed once the relevant tenders have been finalised and all used materials are known.  Separately, indicators relating to the SMART grid can only be assessed after the SMART grid has been commissioned and is operating, the site and educational trajectory is open for visitors and the cooperative is up and running.

Not all elements of the project will take longer to deliver - those aspects of the project that are not dependent on the core design have been pursued.

After the initial rejection of the Regulatory Sandbox proposal, the partners were advised that a Closed Distribution System (CDS) could be possible.  However, this would exclude private citizens from participating in or benefitting from the renewable energy that the Energy Community would manage. This would have been a serious compromise.

The partners have taken the decision to wait until the use of a Regulatory Sandbox has been approved and its specification agreed.  This is because that decision has a fundamental impact on the shape of the offer that can be made to the Transfo SMART grid’s users. The partners do not wish to approach end users with an “offer” that may need to be changed - especially if that change leads to a proposal that the user group might consider to be inferior.

Given the rapid progress is being made on the Sandbox, there should be a robust proposal to offer to all users soon.

The final design of the system and the agreement (through the Sandbox) of who can avail/benefit of the energy that is generated, will inform the scope and role of the Energy Community that is formed. Assuming the use of a Regulatory Sandbox is supported, citizens as well as business users, are anticipated beneficiaries of the new provision.  Focusing on getting the optimum design of the Regulatory Sandbox will also allow a more detailed definition of the scope of the cooperative underpinning the EC to be decided. Having this detail will be important when opening the Energy Community to members and, if appropriate, screening/selecting potential members.

The Energy Community may be encouraged to take ownership of the SMART Grid asset at some point in the future. How it might do this and what it would “own” are dependent on the design of the SMART Grid and the energy assets connected to it. As these can only be defined once there is a resolution on the scope of the Regulatory Sandbox, and as the specification of the Sandbox is not open to change once it has been submitted, the MUA is taking time to consult with partner and specialist advisors in order to agree an optimum specification for the Sandbox.

The project is implementing an approach to generating renewable energy at the community level that will be of interest to other urban authorities wishing to pursue carbon reduction policies and projects. It is breaking new ground through overcoming both technical and regulatory challenges.  Being able to provide insights on challenges and solutions will be very valuable to others.

Upscaling and replication in other locations could be a potential outcome of the project. For example, the MUA is supporting a breakthrough project for energy communities (doorbraakproject energiegemeenschappen) approved by the Flemish Government and the Flemish Organisation of cities and municipalities.  Its aim is to distil lessons learned from European projects involving energy communities and energy sharing (including RE/SOURCED). The goal is to produce a regional framework describing how energy communities can be established so as to address the “gap” between policy and legislation at a national level and operations and delivery at a regional/local level. This could deliver considerable learning that would be relevant by others wishing to follow RE/SOURCED’s lead.

The remaining period of implementation will continue to identify areas of valuable practice for others.  The UIA web articles are a mechanism that can identify replication and upscaling opportunities and can draw out key elements of good practice that have been followed by the MUA and partners.