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The Worthing Heat Network project is
delivering low carbon heating to council and other buildings, with
an implementation date of October 2025. 
This will include Worthing Theatre buildings: Assembly Hall,
Connaught Theatre, Pavilion Theatre and Museum.  The project will deliver key benefits, including
£4.3m of grant and council funded enabling works in the
buildings, including replacement windows, lighting, glazing and
mechanical & electrical improvements, along with the key
benefit of removing gas boilers and transitioning to low carbon
heat (hot water) from renewable sources.
 
Whilst national policy is expected over the
next few years to reduce the price of electricity and increase the
price of gas as part of the national net zero 2050 strategy, at
present low carbon heating is more expensive than gas.  The Worthing Heat Network scheme is guaranteed
through various controls to provide the lowest cost low carbon
heating option, but does not currently compete with gas fossil
fuel.
 
Forward thinking organisations such the
Worthing Council, Worthing Hospital, Worthing Theatres and South
Downs Leisure are making the transition now.
 
As part of signing supply agreements relating
to DforS&R/027/23-24, Worthing Theatres are expected to
experience a significant increase to their annual energy bill and
require transitional support as budgets are
re-adjusted.  This is a result of the
central government grant funding formula and the split between
capital and revenue costs in the financial model.  This level of increase is not being experienced by
other buildings and organisations in the network.
 
Worthing Theatres are strong supporters of the
Heat Network, and the Council has been in discussions with WTM on a
range of issues, including the transitional financial issue which
has been under negotiation.
 
As part of the contract with Worthing Heat
Network Limited (ESCO), a payment of £60k is being made to
the Council for a period of 5 years, starting in
2024/25.  This budget is unallocated,
although it will be required for heat network zone coordination
support from 2027/28, in liaison with the new Sussex strategic
authority which will have (funded) responsibility for zone
coordination once it is established.
 
It has therefore been possible to propose that
some of these funds be used to mitigate the impact of the revenue
costs of connecting to the heat network for Worthing
Theatres.  Agreement has been reached
that a total of £110k will be provided to WTM by the Council
over a two year period (2025-2027) to smooth the transition and
allow WTM to adjust budgets to the higher cost of low carbon
heating.

Reasons for the decision

To enable Worthing Theatres to be able to
enter into a direct supply agreement with Worthing Heat Network
Limited (ESCO) and therefore to ensure grant monies for enabling
works can be drawn down from central government before the
deadline.

Alternative options considered

Negotiations have been on-going for some time
with the financial issue as a key barrier to progress.  This solution does not put pressure on core
council budgets, but alleviates the considerable financial shock of
increased bills to WTM.