Solution

Selected Title: Proposal for the Installation of Solar Photovoltaic (PV) System on the North Block building rooftop within the Civic Center and Achieving Operational Efficiencies through Reduced Expenditure on Energy Usage

Executive Summary

The main aim of this project was evaluating the best practice in installation of Solar Photovoltaic (PV) system in the North Block Building Rooftop within Civic Center. This is while achieving an improved operational efficiencies through a reduced expenditure on the energy use. The best practice would be evaluated in terms of how the procurement system is improved to harness the procurement of the right PV system in the right time and right place. A successful achievement of the highlighted aim would contribute to North Building Rooftop within Civic Center achieving the following sustainable outcomes;

• Achieve the organisation business objectives which include a 10 year plan for ensuring that the council achieves a net zero carbon emissions by 2029
• Maintaining an organisational resilience where it entail a 25-year instllation with forecasted output offering stability to external electricity price shocks
• Responsible financial management strategy to attain a reduced future costs to the authority through lower energy bills
• To improve the public realm, maintain green spaces and promoting economic growth by procuring sustainability for realising cost savings on top of safeguard of environment and promoting green recovery

In order to appreciate the relevance of the installation of the solar PV system in North Block building within Civic Center, various tools have been used which include the Porter’s 5 Forces (Complexity analysis), supplier preferencing matrix, stakeholders’ analysis among others. Additionally, various CIPS techniques and tools have been adopted to analyse the credibility of the procurement function in terms of costs savings, reduced CO2 waste and eventually creating a resilience and net zero borough. For attaining the intended research objectices, the data has been sourced by use of the primary and secondary data. Also, by benchmarking, an appropriate business portfolio and risk management approach has been adppted. The findings from this report evidence that through a successful installation of the Solar PV system within Civic Center, a design, supply and install system would be harnessed tendered under the Council’s contract procurement rules. This is by successfully lowering the overall KWH consumption within the Civic Center, CO2 tonnes emissions emitted by the authority and billing data inclusive of levy charges. This would be evident in the different taxonomies and categories of best spend information.

In tandem with the analysis of findings and data sourced, various recommendations would be sourced in this report. They include;

• As part of improving the drafting of technical documents, stakeholders engagement and using bespoke aware criterion, digital procurement tools and system can be employed for promoting costs savings, experts and skills specialisation, accuracy increase and promoting efficiency in the overall installation of Solar PV System
• To generate a detailed category management for the Solar PV System in Civic Center procurement to organise an appropriate, holistic collaboration with the end-users and core stakeholders
• To harness stakeholders inclusion and management process to ensure best decisions are made, on-time and accurate retention and market growth and development
• Introducing opportunities for capacity development for the authority main decision makers to appreciate the importance of lowering carbon footprint substantially and allowing authority in discounting its energy emissions
• Setting priority in creating a collaborative business strategy with the Solar PV system vendors to secure the renewable energy provision and integrated system
• To approve the budget for risk evaluation and management for mitigating entire risks impacting the suppliers in their assigned job function

Table of Contents

1.0 Introduction.. 4

1.1 Project Title (Key Terms) 4

1.2 Project Scope. 6

1.3 External Environment. 8

2.0 Background.. 10

2.1 London Borough of Bromley. 10

2.2 Reason the project matters and Objectives 11

2.2.1 London Borough of Bromley Procurement Supply Chain Management Structure. 15

2.2.2 LB Bromley Category Management 19

3.0 Current situation.. 20

3.1 LB Bromley Energy portfolio as current strategy. 20

3.2 Remodelling of Digitised Procurement for Solar PV System Sourcing. 24

3.3 Situational Analysis. 27

3.4 Options Available for Council 28

Option 1. 29

Option 2. 29

Option 3. 29

Option 4. 30

4.0 Methodology Used. 31

5.0 Findings and Analysis. 31

5.1 Risks and Mitigation. 31

5.1.1 Partnership Risks. 32

5.1.2 Legal Risks 33

5.1.3 Operational Risks. 33

5.1.4 Commercial Risks. 34

5.2 Stakeholders Mapping. 34

5.2 Solar PV System Installation Procurement Team Implementation. 38

6.0 Conclusion and Recommendations. 42

6.1 Conclusions. 42

6.2 Recommendations. 43

References. 45

Appendices. 49

Appendix 1: North Block Roof Detail 49

Appendix 2: Costs breakdown. 49

Appendix 3: Purchasing Cycle. 50

Figure 1:Procurement Stages in Civic Center 6

Figure 2:Factors which influence the Process of change. 13

Figure 3:Change in organisations and accepting culture. 14

Figure 4:5 Rights Procurement Approach. 16

Figure 5:Organisation Matrix Structure. 17

Figure 6:Council Procurement Cycle. 18

Figure 7:Category management model 20

Figure 8:STEEPLE Analysis and Council Installation of Solar PV System.. 22

Figure 9:LB Bromley Council Stakeholders Analysis 23

Figure 10:Digital Technology Practice in Council Sourcing of Solar PV System.. 24

Figure 11:Kraljic Analysis 28

Figure 12:Project Implementation Risks. 33

Figure 13:Supply Risks and Mitigation approaches. 33

Figure 14:Stakeholders Mapping in Change Inclusion. 36

Figure 15: Improved procurement systems in Solar PV System installation. 37

Figure 16:Challenges of success in implementing Solar PV System in Civil Center Rooftop  38

Figure 17:Mitigating challenges limiting successful Solar PV System Installation. 39

Figure 18:LB Bromley energy Tuckman Theory of Group Dynamics Implementation. 40

Figure 19:Belbin Model and Installation. 42

Table 1:PESTLE Analysis. 10

1.0 Introduction

1.1 Project Title (Key Terms)

Today, the demand for renewable energy has substantially increased with organisations being prompted to initiate strategies for improving the efficient energy use. One of the strategy which can be used is the installation of Solar Photovoltaic (PV) system (Kumar & Singh, 2018). According to Lopez et a. (2012), the Solar PV currently assume a high-level relevance as a renewable energy sources application. The research evidence this is due to the distinct advantages including allocation simplicity, high dependability, absence of fuel costs, low maintenance and lack of noise and wear owing to lack of moving parts. This is while solar energy offering a cleaner, pollution-free and inexhaustible energy sources. It is in this regard that the London Plan 2016 (Policy 5.2) called upon the developers to lower the carbon emissions linked with major new residential and non-residential developments (City of London, 2021). The policy states that any on-site shortfall may be provided through a payment in lieu contribution to the relevant borough. Payments are secured through Section 106 agreements and contribute towards funding local carbon reduction projects off-site. In line with current industry best practice, other councils (e.g. Southampton, Rotherham and Reading) have taken action to install rooftop solar PV systems to reduce on-site energy consumption to realise carbon and cost savings.

Considering on 15^th July 2020 Council Motion unanimously approved 10-year plan for ensuring the council achieves net zero carbon emissions by 2029, it is not elaborate on the best procurement strategy in installing the Solar PV system on rooftop on North Block Building as illustrated in appendix 1 (located at the Civic Center). As a best practice of the Civic Center, they need to remodel their procurement system with an intention of ensuring that their installation need to attain operational efficiencies by reducing expenditure on energy usage. This is what is identified in River and Stations (2020) as the design, supply and install contract tendered under the council’s contract procurement rules. The procurement process would also entail the annual repairs and maintenance of the Solar PV systems for a programmed and reactive approach. As a best practice, the Civic Center would achieve by sorucing the Solar PV systems, install them successfully, analyse their usage, repair and maintain them as a future-based best practice. This is in the right time and quality/quantity being sourced. As a best practice in the Civic Center procurement process, the approaches adopted in the organisation improvement would be harnessed as illustrated in figure 1;

Figure 1:Procurement Stages in Civic Center

As shown in figure 1, in first step which include making an insource or outsource decision, this can entail embracing of the technologies to categorise and manage the renewable energy and solar installations.  This is through cloud technologies, artificial intelligence, and blockchain among customised tools and techniques. Further, by remodelling of their procurement system, the estimated contract value of £100,000 would substantially reduce with the need for sourcing the Salix 0% interest loans and Carbon Neutral Fund similarly existing to the reach of the Council. Also, in the spend analysis, supplier sourcing, pricing and negotiiations and contracting, by embrace of the modernised technologies, it would be possible to harness the stakholders collaboration reducing the resources demand. The estimated capital cost for installation over a 25-year period is a £100,000. Subsequent annual operation and maintenance costs average £770 but can range between £4000 to as little as £340 depending on the level of service required 9see appendix 2). The exercise is to be funded from Section 106 carbon offsetting contributions.

The proposed Fusion 21 Energy Efficiency Framework is brand new, released for consideration in February 2020 and lasting till 2024.The framework therefore considers the most up to date industry guidelines, technical specifications, product quality assurances and vetted industry suppliers. Also, there are 13 suppliers listed on this framework that can deliver to London, there is little risk of zero response or interest from the market, but this must still be considered. It is in this regard that the need for harnessing the procurement system and operations in the Solar PV installations and eventual maintanence and management being put into consiseration for the success of the organisation and broad society.

By successfully remodelling their procurement process of the Solar PV systems, this would play a core function of a e-gateway for their procurement process by involving the likely bidders, interacting and responding to tendering issued by the organisation. This is for the 13 suppliers who are readily available with readiness in delivery to London with risks having zero responses. For the other stakeholders, they would need to be involved in evaluating the Positive externalities include: a reduction in Property’s energy costs – complementing the accommodation strategy and wider Transforming Bromley agenda; a reduction in carbon taxation. On top of this is an eased drafting of technical documentation including specification, pricing schedule, ITT, and quality questions. Stakeholder engagement to guide with close management of the key stakeholders, identifying their expectation and analyzing them based on their Power and interest of the project and finally influencing them to back the scheme.

Hence, from the provided background information, it is relevant to consider the role of category management and suppliers evaluation as a best practice in procurement by its remodelling to ensure successful procurement of the Solar PV system.

1.2 Project Scope

ILB Bromley previously had four electricity tariffs: a day/night and summer/winter split. Consumption varies by time of day, but is 24 hours, 7 days a week and running costs are significant. The financial year 2019/20 saw the Civic Centre consume 2,321,640 kWh of electricity, which cost the Council £270,000[1]. This amount includes the Climate Change Levy (CCL), a cost of £19,664. Based on soft market testing and quotes received from industry, the average capex for such an installation is £100,000, with annual operation and maintenance (O&M) charges in addition to that. The estimated (25 year) gross lifetime savings to the Civic Centre’s electricity budget averages £2740,000, based on average system size and yearly output. The average system size of 88 kWp, with a 77,043 kWh (1^st year) output can account for 3.32% of the total civic centre consumption. Average net lifetime savings (after deducting whole life costs) is £226,447 over 25 years. The average first year gross savings are approximately £8694 (electricity rate plus the climate change levy). Once deducting the average cost of the annual maintenance and repair regime contract, net first year savings are estimated at £7924.

Importantly, annual savings are not fixed and increase periodically as the price of electricity rises. Furthermore, each system’s panel efficiency degrades year-on-year resulting in less kWh output and therefore reduced financial savings. Payback is therefore not a simple £100,000 (capex)/£7924 (net annual savings) as these variables must be taken into account. Various quotes in industry have provided anywhere between 6-12 years payback times. Such a variation is due to the different sizes of the arrays proposed and the prices quoted. Quotes also used different figures for RPI, fuel inflation etc. when providing these payback times. For fairness, when standardising these assumptions and variables, payback averages 10-11 years. Calculations available upon request.

It should be noted that the new electricity rate for the Civic Centre from September 2020 onwards is priced at a 10.5p per kWh. Currently, the cost of Civic Centre energy consumption is charged against the Property Portfolio and is managed by the Facilities Management Team. The use of financial mechanisms available to the Carbon Management Team provide a means to support a diverse range of services and departments across the Council.

Therefore, based on the provided background information, the purpose of this project is investigating and eventually recommending initiatives and techniques for successfully designing, supplying and installing renewable energy sources by the Civic Center. This is for Bromley designing, supplying and installing Solar PV System (s) to the North Block roofs as illustrated in appendix 1. Part of this would entail annual repairs and maintainence of the solar PV systems on the programmed and reactive basis. The annual-baased poperations and maintaijnence (O&M) regime will be costed in the pricing schedule and subsequently an indicative amount for 25 years (the lifetime of the contract) will be calculated to understand the financial implications for whole life costs. As a best practice, by appropriately managing the procurement function, it would be possible to facilitate an increase in values particularly automation strategies with an increase in the level of end-to-end efficiency, transparencies, costs managemet and improved business value.

1.3 External Environment

Evaluating external environment is important particularly for this project as the investment in renewable energy is a factor of many stakeholders interests. In particular, CIPS (2021) highlight that the rationale for evaluating the external environment is informed by the fact that organisations have based their operations in a high-level Volatile, Uncertain, Complex and Ambiguous (VUCA) world. As such, in an external environment, the best practice in embracing technologies, integration of all practices, control and visibility practices, category managers guidance, administration and management with procurement and technology experts engaged. By embracing modern procurement technologies, the external environment evidence the scope in which the opportunities would be integrated, visibility attained with organisaton controlled to attain cost savings. Considering the United Kingdom (UK) organisations, they are focusing on leveraging on data from their spend analytics, eSourcig, holistic category management among others for a seamless procurement process. These organisations strategic agendas of reducing the carbon blueprint and lowering the emissions of CO2 is significantly lowered. This is nevertheless only possible if the different procurement departments are well placed to lead to a high operations value. The 13 suppliers of the renewable energy tend to leverage on use of product designs, sales and marketing strategies, sustainable practice, increased market share and acquiring profits.

In order to identify the best practice by the procurement in procuring 100% renewable energy with a capacity of assisting the authority in lowering carbon substantially and allowing the authority to discount energy emissions, external analysis is essential. This can be achieved by the application of PESTLE factors in the macro-environnent analysis (Kochkina, 2019) is applicable to evaluate the influence of the identified change process as shown in table 1;

Table 1:PESTLE Analysis

2.0 Background

2.1 London Borough of Bromley

London Borough of Bromley is identified as Southeasternmost of the London boroughs establishing the Greater London and border ceremonial county of Kent (Bromley, 2022). This is where most of Bromley was part of prior 1965. It is also identified as the rural borough and include more of the North Downs than any other, since the apartment is broad between Bromley and Banstead. This is similarly a reflection of the population density where there is an escarpment between the Bromley and Banstead. This aspect is also a reflection of the town population density identified as the lowest of 32 London Boroughs.  Majority of the population are found living in the North and West sides of Borough with the outlier at Biggin Hill in the far South. For approximately 30% of the land in Bromley, this is largely occupied by farm activities being the highest in terms of popularity.  As evidenced in Bromley (2021), the Bromley Council intend to establish an appropriate environment with people and communities thriving and people leading a healthier and more independent, self-reliant lifestyles with the council facilitated in focusing on more support to borough’s most vulnerable residents. The identified strategies are achieved through prioritising on housing and regeneration, supporting independence, support of children and young people, quality environment, safe Bromley, and healthy Bromley.  To achieve these approaches, one of the best practices would include an investment with renewable energy. The procurement of the Solar PV system needs to adopt appropriate system to ensure they are successful in their operations. This is by dominating the industry of county council and the population facilitation.

In line with the different reports and insurer concepts, the UK community sector is appreciated as the most strategic and successful operations in the region and particularly the Solar PV system. In particular, for the Civic Center in the organisation, they operates holistically by ensuring that they coordinate the North Down sustainable operations. The North Down residents living standards would be substantially improved if an investment in renewable energy is prioritised for optimum benefit of all stakeholders. As evidenced in Statista (2021) this would contribute to an improved facilitation of approximately 332, 752 residents operating in the region. This is intended to be done by installing solar PV system in the rooftop of North Block Building (located at the Civic Center).

2.2 Reason the project matters and Objectives

The purpose of this project is to establish an appropriate proposal for the installation of a Solar PV system on the rooftop of the North Block Building (located at the Civic Center). This is informed by the previous Council Motion in 15^th July 2020 which had unanimously approved a ten-year plan for ensuring that the council attains net zero carbon emissions by 2029. The Council is interested in ensuring Section 106 Carbon Offsetting contributions for funding the energy/carbon reduction initiatives on its own estate. Also, in line with the London Plan 2016 (Policy 5.2) demand the developers to lower the carbon emissions linked with most of the new residential and non-residenaitl developments. In line with the policy stipulations, it demands any shortfall to be offerd by payment in lieu contributing to the releveant borough. The payments would be secured by referring to the Section 106 agreements and contributing to the funding of local carbon reduction projects off-site.

For the purpose of informing the need for change in the non-renewable energy to sourcing of renewable sources, a focus on their procurement department would be essential to harness change in tandem with CIPS guidelines. As shown in figure 2, the different aspects of relevance in environment, markets demands, business, organbisation and cultural factors. Additionally, the leadfership in North Block Building in Civic center and employees mindsets would be prioritised appropriately.

Figure 2:Factors which influence the Process of change

Source: CIPS Notes 2021

Further, for the sake of adopting the remodelled contemporary strategy with technology for example being a core driver where the London Borough of Bromley would for example be required to pass through a set of cultural acceptabnce factoes. As evidenced in the Balogun and Hope model (CIPS, 2021a) as a feature of change embace being increamental holistically. Hence,  London Borough of Bromley procurement system ought to pass through adaptation and evolution consistently. The way the various operations are changed is gradually harnessed as shown in figure 3;

Figure 3:Change in organisations and accepting culture

Figure 3: Change in organisations and accepting culture

Additionally, the identified change is harnessed by the view that different orgaisation practices in London Borough of Bromley as explained in background information, problems associated with the society efficiencies and timely decision making entail the need to highlight the core impact of revenues generation and managing costs. For example, an embrace of traditional approaches contribute to the policies and procures misaligned with efficiencies which facilitate an increased transition of their practices particularly in the society. The organisation is yet to establish a sustainable prociurement process for their green spaces aqnd promotion of economic growth. In their Bromley Agenda, they would use procurement strategy to procure sustainably with realisation of cost savings on top of safeguard of their environment and harnessing green recovery.

In the process of procuring the Solar PV system by London Borough of Bromley to install in their Civic Center they are affected by costs of procurement overruns, delays in engagement and uccordined in their suypply process which would limit the success of the strategy. In this regard, for this project, the improved outcomes and system would lead to the following outcomes;

• Responsible Financial Management Strategy: reduced future costs to the council through lower energy bills.
• Maintaining Organisational Resilience: A 25-year installation with forecasted output provides stability to external electricity price shocks.
• Modern, Efficient and Flexible Work Environment: As part of the accommodation strategy to modernise Civic Centre buildings.
• Effective Resident Engagement: Demonstrates our environmental commitments to the wider public.
• Improving the Public Realm, maintaining our Green Spaces and Promoting Economic Growth: Procuring sustainably will realise cost savings in addition to safeguarding the environment and promoting a green recovery.

Despite of the approval of funding of this project and its expected outcomes, the management of the Council have not succeeded in setting appropriate and detailed systems and policies. This is specifically in their procurement system where the need for integrating industry guidelines, technical specifications, product quality assurances and vetting industry suppliers is informed by lack of remodelled procurement system which is holistic. This inform the need for the Council to establish a high-level improvement strategy and a holistic procurement partnershop with stakeholders increasing strengths of their procurement background. The rationale of this is evaluating the particular outcomes and influencing of stakeholders in backing the scheme and application of individiualised management style in guiding the project iomplementation from the initial business case to awards and implementation of solar panels system.

Further, as part of implementation of the project, from the procurement phase, it is not clear on the technologies which are intended to be adopted by the council in sourcing the Solar PV system. This is at the same time making sure they prioritise management of the resource allocation problems, lacking capability and qualified experts engaged. Therefore, the success of their procurement and eventual installation of the Solar PV system in their Civic Center in the Council rooftop. To identify the best practie which would be adopted, the 5 Rights of Procurement Strategy can be used (Oxford, 2021). In this regard, London Borough of Bromley council would need to holistically use a strategic procurement strategy intended to improve efficiency and effective installation of the Solar PV system. As shown in figure 4, this can entail integration of digital systems in their existing procurement systems which would be successfully influenced by a set of factors identified.

Figure 4:5 Rights Procurement Approach

In conclusion, for the 5 rights model aspects, their use would be instrumental for ensuring successful sourcing, procuring and installation of the solar PV system. This is identified as design, supply and install contract tended under the council contract procurement terms and conditions. Part of this also entail yearly repairing and maintaining the solar PV systems in a programmed and reactive basis. As a best practice, commitment in being consistent to improve and develop sustainable initiatives would be evident.

2.2.1 London Borough of Bromley Procurement Supply Chain Management Structure

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