TENDER CONSIDERATION PLAN - COMMUNITY BATTERY (REFERRED FROM P&E 6 JUNE 2023)

Executive summary

Noosa Council identified an opportunity to take the lead in applying for grant funding for the installation and operation of a Community Battery as a pilot to determine the benefits of such an initiative to both the community and Council. It is intended that this pilot will enable Council to make informed decisions moving forward regarding further rollout of batteries across the Noosa Shire. Noosa Council, applied for funding under the Federal Government’s Community Batteries for Household Solar - Delivery of Election Commitments Stream 1, which stipulated Noosaville as the location for the community battery. Initial research identified that community batteries are an innovative emerging piece of infrastructure, and a number of trials are being undertaken to determine the operational parameters and revenue models. Council recognised it would need to partner with an experienced industry expert to successfully apply for the grant funding and if successful, install and operate the community battery to achieve the most beneficial outcome for the Noosa community. Yarra Energy Foundation (YEF) is currently the only not for profit organisation operating an 'in front of the meter' community battery for community benefit and emissions reduction. Zero Emission Noosa Inc (ZEN Inc) is Noosa’s community group focussed on achieving net zero emissions for the Noosa LGA. Noosa Council was advised they were successful in their application for the Federal Government’s Community Batteries for Household Solar - Delivery of Election Commitments Stream 1, and, subject to the acceptance of the grant agreement, will be awarded $500,000 for the completion of the installation of a community battery in Noosaville. Generally, for a procurement of this value a public tender would be required under Chapter 6 Contract - Part 3 – Default contract procedures - Local Government Regulation 2012, as the value exceeds $200,000 ex GST. However, community batteries are a new and complicated piece of infrastructure and as such there are very few entities within Australia that have installed and operated an ‘in front of the meter’ community battery for the purpose of community benefit and emissions reduction. Council recognised that it does not have the resources to be able to execute a project of this nature on its own, largely due to the specialised expertise required. Therefore, an alternative procurement strategy is proposed. Under Chapter 6 of the Local Government Regulation 2012 a Tender Consideration Plan (TCP) is an exception that enables Council to enter into medium sized (ex. GST $15, 000 - $200,000) and large sized (ex GST. $200,000+) contracts without first inviting written quotes or tenders. Accordingly, this report recommends the preparation of a TCP as an appropriate procurement strategy for the establishment of a Community Battery in the Noosa Shire.

Recommendation

That Council note the report by the Carbon Reduction Project Officer for Tender Consideration Plan - Community Battery to the Services and Organisation Committee dated 6 June 2023 and:

1. Resolve to prepare a Tender Consideration Plan, substantially in accordance with the draft plan in Attachment 1 for the procurement of the supply, installation and operation of a Community Battery, under section 230 of the Local Government Regulation 2012 and;
2. Delegate authority to the Chief Executive Officer to: i. Prepare and adopt the Tender Consideration plan; ii. Approve the negotiation and enter into contracts, within the Chief Executive Officer’s financial delegation, in order to achieve the objectives of the Tender Consideration Plan.

Report

Background

Noosa Council Environment Strategy 2019 and Climate Change Response Plan sets an ambitious target for the Noosa Council and Community to achieve net zero emissions by 2026. Around 58% of Noosa LGA emissions comprise stationary electricity. Noosa has over 83.3MW of rooftop solar installed in residential and business premises across the Shire. The Australian’s Government Community Batteries for Household Solar grant program enables excess solar generated during the day to be stored in a community battery for use during peak times. Noosaville was identified as an eligible location in Stream 1 of this program to be allocated funding for the installation of a community battery. The grant application required the applicant to identify the technology and the project implementation partners for this battery. Following considerable research into community battery implementation and operating models for community benefit and emission reduction, Council identified YEF, a Not for Profit organisation, as an appropriate partner in its application for the funding, largely in recognition of their expertise in the implementation of batteries for the primary purpose of community benefit and emissions reduction. This includes YEF having successfully installed, and is currently operating, the only community 'in front of the meter' battery in North Fitzroy Victoria. The grant application also required community engagement to be undertaken to involve the local community in understanding the need for the battery, its operations and any risks associated with the location of the battery in the local area. ZEN Inc had undertaken considerable work to identify potential locations in Noosaville and commenced community consultation with residents throughout the Shire. Therefore, it was logical for Council to partner with ZEN Inc for the battery application to utilise ZEN Inc expertise in community consultation and site selection. Noosa Council was recently advised they were successful in their application for the Federal Government’s Community Batteries for Household Solar - Delivery of Election Commitments Stream 1, and, subject to the acceptance of the grant agreement, will be awarded $500,000 for the completion of the installation of a community battery in Noosaville. A procurement strategy has been developed in partnership with Council’s Procurement Team to utilise proven experience and expertise in the establishment of the community battery in Noosaville and to provide value for money for the grant funding.

PROCUREMENT PROCESS

Due to the complexity of the project, Council identified a need to engage with expertise for both the grant application and the subsequent delivery of the community battery to the community. As such, and in accordance with Section 230 of the Local Government Regulation 2012, a Tender Consideration Plan (draft attached- Attachment 1) was considered the most appropriate method of procurement as it covers a range of key elements and considerations of the procurement. Subsequently, in accordance with the Section 230 (2) of the Regulation the draft Tender Consideration Plan (TCP) addresses the following: 1. The objectives of the Plan 2. How the objectives are to be achieved 3. How the achievements of the objectives will be measured 4. Alternative ways of achieving the objectives 5. Proposed Terms of the Contract 6. Risk analysis of the market. Considering an initial market analysis undertaken by the Carbon Reduction Project Officer, and considering the elements of the draft TCP, a proposal to undertake the installation and operation of the battery in accordance with the grant application was sought from YEF.

Report details

Index: Subject/21.42 - Carbon Emission Reduction