blake lapthorn green breakfast with guest speaker philip wolfe, director of westmill solar co...

The triumphs, trials and tribulations

of community energy

Philip Wolfe

[email protected]

Westmill Solar Co‐operative

Topics

Community energy

UK policy

Westmill Solar – how we did it

Utility‐scale solar generation

07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 2

UK picture

Other countries

COMMUNITY ENERGY

Energy system

UK (and e.g. France)

▫

Initially centralised (CEGB, national gas grid)

▫

Then deregulated (but still feels like a monopoly)

Others (e.g. Germany, USA)

▫

Local and municipal utilities play significant role


Energy policy

Renewables policy

Feed‐in Tariffs

UK POLICY

Why there is policy support for renewables

EU Renewables Directive requires UK to produce 15% of its energy

from renewables. It was about 3% in 2010!

Feed‐in Tariffs and Renewable Heat Incentive are projected to generate 8% of the UK’s energy from renewables in our properties by 2020.

The balance will come from the Renewables Obligation for utility

scale renewable electricity.

PowerStationsclosing

OffshoreOil/ Gas

Running out

15% Renewables

Target in 2020

07/11/2012 6Westmill Solar Co‐operative at Blake Lapthorn

landowners_banner.gif

Electricity used

ElectricityGrid

Import

Export

RenewableGeneration

How the Feed‐in Tariffs work

Paid for the renewable energy you generatePaid more for the renewable electricity you exportSave money from your current energy bills

Drawn fromthe grid ifmore is needed

Comes from renewable

energy whenever

available

Total Generation


More about the FITs regulations? Skip

FITs eligibility

The FITs cover installations up to 5MW

The tariff level depends on:

▫

So‐called ‘Total Installed Capacity’

▫

The capacity is per ‘site’

▫

Additions based on cumulative capacity

Installations must be accredited

▫

Systems under 50kWe

– MCS

▫

Systems over 50kW – ‘ROO‐FIT’


The FITs Export Tariff

For every kWh exported to the grid

▫

The beneficiary gets the generation tariff

▫

Plus a premium for export, as follows

A fixed floor price is set in the regulations:

▫

Originally 3p/kWh

▫

Increased to 4.5p/kWh from this autumn

But you can opt out and negotiate

▫

a better price from an electricity supplier

▫

Opt‐out decisions can be made each year


Duration of tariffs

Tariffs are fixed for 20‐25 years▫

Except micro‐CHP for 10 years

▫

PV is 25 years all others are 20

Tariffs are index‐linked to the RPI▫

Both generation and fixed export tariffs

▫

New rates will be announced annually

For new installations tariffs change:▫

Subject to degression

▫

Maybe at reviews (5‐yearly from 2013)


Tax treatment

Householders don’t pay Income Tax on▫

The generation nor the export tariffs

▫

... provided that it is for

“households who use renewable technologyto generate electricity mainly for their own use”

Business has no special tax exemption▫

but can offset costs against profit as usual

▫

No Enhanced Capital Allowances for PV (yet)


How the tariffs were set

FITs to achieve an “average 5‐8%”

return▫

Would equate to roughly 12‐year ‘payback’

We find that typical systems:▫

Recover their costs ~ twice over the period

▫

That is equivalent to a 12‐year payback

We find that the best systems:▫

Recover their costs 2½

to 3 times

▫

Equivalent to less than 10‐year payback

▫

Can achieve return rates over 10%

Index‐link & tax break improves all this


Where the money comes from

The scheme is set in law, but

The government doesn’t pay for the FITs

▫

They come from a levy on electricity bills

▫

Collected and paid out by suppliers

o Who have a ‘levelisation’

system to share the costs fairly between them

▫

Part of their licence conditions

o Only small suppliers can opt out

o Others are called ‘FITs licensees’


Who the money goes to

The beneficiary is the system owner

For the FITs:

▫

He can specify a ‘nominated recipient’

o to whom is tariff payments can be made

▫

He nominates (and can change)

o which FITS licensee will pay over the tariff


Scheme administration

Scheme is administered by Ofgem, who▫

Maintain the register of installations

▫

Oversee the FITs levelisation process

▫

Accredit FITs systems over 50kW

▫

Have issued guidelines on how it works

For more details:www.FITariffs.co.uk

▫

And on the Renewable Heat Incentive:

www.RHIncentive.co.uk


http://www.fitariffs.co.uk/

http://www.rhincentive.co.uk/

Feed‐In Tariffs to date


History

The Co‐op’s transactions

Structure

WESTMILL SOLAR PARK

Westmill Solar Park history – Phase I

Feb 06

Westmill wind farm co‐operative launched

Mar 11

Planning consent for solar park

May 11

Lease & option agreement with developer

Jul 11 Solar Park commissioned

Aug 11

FITs tariffs slashed


Westmill solar and wind farm


Westmill Solar Park history – Phase 2

23 Jun 12

Co‐op public share offer launched to raise £4m

31 Jul 12

Public offer closes with £6m

10 Aug 12

Private placing launched

28 Aug 12

Private placing closes with £1.8m

31 Oct 12

Solar Park SPV acquired

31 Oct 12

Option ends


‘The deal’


SPV

BEWF Ltd

Blue Energy

Low Carbon

Group

Santander

Westmill Solar

Co‐operative

Private placingB‐shareholders

Public offerA‐shareholders

CC Pension FundInvestec Bank

Lease DNOPPA O&M

Our management plan


Westmill Solar

Co‐operative

Private placingB‐shareholders

Public offerA‐shareholders

CC Pension FundInvestec Bank

Lease PPADNO O&M

Asset ManagerAdministration

provider

The book

History

Current status

UTILITY‐SCALE SOLAR POWER

Shameless plug – my book

Solar photovoltaic projectsin the mainstream power market

Published 26th

October 2012


History of utility‐scale PV

1982 First MW station

1984 5MW plant

20 years

nothing

2004 4MW community‐owned solar park at Hemau

2005 First plants under revised German FITs

2007 First plants in Spain. Global capacity > 100MW

2009 Global capacity > 1GW

2010 UK FITs introduced

2011 Global > 4.5GW more than offshore wind

Today

Global capacity > 7GW


Large‐scale solar power stations worldwide

Westmill Solar Co‐operative at Blake Lapthorn

Global solar plants 10MW+

Rank Country Schemes BuiltQty

BuiltMW

DevelopingMW

1 Germany FITs 73 2,262 11

2 United States Obligations, Tax 46 1,045 14,724

3 Spain FITs 62 1,042 0

4 Italy FITs 14 434 14

5 China National 16 400 408

6 France FITs 9 353 82

7 Canada FITs 12 337 450

8 India National 14 301 573

9 Ukraine FITs 5 284 0

10 Czech Republic FITs 9 188 0

11 Bulgaria FITs 4 155 66

12 Thailand CDM 2 83 100

13 Republic of Korea National 4 73 0

14 Portugal FITs 2 57 0

15 Mexico National 1 38 75

16 Puerto Rico National 1 24 95

17 Peru Obligations (RA) 1 22 0

18 Belgium FITs 1 13 0

19 Japan National, FITs 1 13 134

20 Reunion International 1 11 0

21 Australia National 1 10 483

22 United Arab Emirates National 1 10 300

23 Greece FITs, international 1 10 250


Large‐scale solar power stations UK

Westcott Solar Park


Any questions?

Contacts:About Westmill

Solar:

www.westmillsolar.coop

About the Feed‐In Tariffs:

www.fitariffs.co.uk

About utility‐scale solar power:

www.wiki‐solar.org

@wikisolar

About the Renewable Heat Incentive:

www.rhincentive.co.uk

To contact me:

[email protected]

@philip_wolfe

07/11/2012 32Westmill

Solar Co‐operative at Blake Lapthorn

http://www.westmillsolar.coop/

http://www.fitariffs.co.uk/

http://www.wiki-solar.org/

http://www.rhincentive.co.uk/

blake lapthorn green breakfast with guest speaker philip wolfe, director of westmill solar co...

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