How did £24m council-owned green energy network make £1.3m in losses and fail to meet net zero goals?
Mancunians remain in the dark over how a £2m council-funded green energy network is performing – after initially making £1.3m in losses and failing to contributing to net zero targets.
The town hall-owned Manchester Energy Network opened in 2021, using a giant ‘people’s boiler’ on Lower Moseley Street to supply hot water and heat to nearby important city centre buildings like the Bridgewater Hall.
The boiler’s chimney, called the Tower of Light, even won architectural awards and was nicknamed the ‘Granada Familia’, owing to its likeness to Gaudí’s iconic Sagrada Família basilica in Barcelona.
But the £24m project has been beset by problems which meant it ‘had to be brought back from the brink’, it was revealed today on September 4. In its first two years of operation, the Network made £1.3m in losses. It was expected to make a loss in its third financial year, which closed at the end of last year.
That was because the Network did not have a business plan ‘from 2022/23 to 2023/24’, Coun Richard Kilpatrick said in March 2024. He called the omission a ‘major, major oversight’. Losses may explain why £1.5m – £1m from an existing budget and £500,000 of new money – was loaned ‘to provide additional support to the Network… which will be repaid to the council in the future’ that month.
After the bail-out, it was then revealed the Network which was supposed to help Manchester become a net zero carbon city by 2038 never actually contributed to green targets. When building the boiler was approved on New Year’s Eve 2018, bosses planned to use gas backed by Renewable Gas Guarantees of Origin (RGGOs) as evidence of the Network’s green credentials.
But in the three years it took to start up, technology moved on so significantly that the Tyndall Centre no longer recognised RGGOs as positive contributors to net zero when the Network opened. The reason why Network bosses pressed on with RGGOs was because they ‘sought advice, but not from the Tyndall Centre’, the town hall was told in March last year.
Work to switch to greener fuel that ‘fully complied with Tyndall Centre recommendations’ started that November, according to Sarah Narici, the council boss brought in to steady the ship. But months on from the last update, councillors have slammed a decision to discuss the Network’s latest progress behind-closed-doors.
“I do not think it does the council any good for the council to say ‘here’s a brief statement and we will get into the crux of what’s gone wrong and what we will do about it [in private]’,” Coun Richard Kilpatrick said on Thursday (September 4).
“I think we need to do better. Some of what’s in part B [of the meeting, held in private] is not commercially sensitive, it is just what happened.”
Ms Narici defended the decision, saying she wanted discussion to ‘flow’. “It’s about the flow of discussion, but when we come back in the next meeting… we can publicly declare elements of this,” she replied. “I want to have a discussion flowing without it being stopped and started. That’s why there’s a lot in B, but hopefully we can transition to having more in part A.”
Although discussion in Thursday’s resources and governance scrutiny committee only lasted a matter of minutes, veteran Coun Paul Andrews singled out Ms Narici’s team for praise for ‘bringing this back form the brink’.
He said: “I would like to thank all of the offices currently in post for the exceptional work they have done for bringing this back from the brink.”