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Blake Lapthorn Green Breakfast with guest speaker Philip Wolfe, Director of Westmill Solar Co operative - 7 November 2012
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Blake Lapthorn Green Breakfast with guest speaker Philip Wolfe, Director of Westmill Solar Co operative - 7 November 2012

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Blake Lapthorn welcomed Philip Wolfe, Director of Westmill Solar Co-operative and Nicola McConville, Partner, Blake Lapthorn to its Oxford Green Breakfast on 7 November 2012.

Blake Lapthorn welcomed Philip Wolfe, Director of Westmill Solar Co-operative and Nicola McConville, Partner, Blake Lapthorn to its Oxford Green Breakfast on 7 November 2012.


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  • 1. Westmill Solar Co‐operative The triumphs,trials and tribulationsof community energy Philip Wolfe philip@wolfeware.com
  • 2. Topics Community energy UK policy Westmill Solar – how we did it Utility‐scale solar generation07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 2
  • 3. COMMUNITY ENERGY UK picture Other countries
  • 4. 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 role07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 4
  • 5. UK POLICY Energy policyRenewables policy Feed‐in Tariffs
  • 6. 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.  Power Offshore 15% Stations Oil/ Gas Renewables closing Running out Target in 202007/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 6
  • 7. How the Feed‐in Tariffs work Renewable Electricity Electricity Generation used Grid landowners_banner.gif Comes from renewable  Drawn from energy whenever  the grid if available more is needed Import Total Generation Export Paid for the renewable energy you generate Paid more for the renewable electricity you export Save money from your current energy bills More about the FITs regulations? Skip07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 7
  • 8. 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’07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 8
  • 9. 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 year07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 9
  • 10. 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)07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 10
  • 11. Tax treatment Householders don’t pay Income Tax on ▫ The generation nor the export tariffs ▫ ... provided that it is for “households who use renewable technology to 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)07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 11
  • 12. 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 this07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 12
  • 13. 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’07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 13
  • 14. 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 tariff07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 14
  • 15. 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.uk07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 15
  • 16. Feed‐In Tariffs to date07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 16
  • 17. Feed‐In Tariffs to date07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 17
  • 18. Feed‐In Tariffs to date07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 18
  • 19. WESTMILL SOLAR PARK History The Co‐op’s transactions Structure
  • 20. 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 slashed07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 20
  • 21. Westmill solar and wind farm07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 21
  • 22. 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 ends07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 22
  • 23. ‘The deal’ Low Carbon  Public offer Group A‐shareholders Private placing Blue Energy Westmill Solar  B‐shareholders Co‐operative SPV CC Pension Fund Santander BEWF Ltd Investec Bank Lease PPA O&M DNO07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 23
  • 24. Our management plan Public offer A‐shareholders Westmill Solar  Private placing Co‐operative B‐shareholders Administration  CC Pension Fund Asset Manager provider Investec Bank Lease DNO O&M PPA07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 24
  • 25. UTILITY‐SCALE SOLAR POWER The book History Current status
  • 26. Shameless plug – my bookSolar photovoltaic projectsin the mainstream power marketPublished 26th October 201207/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 26
  • 27. 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 > 7GW07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 27
  • 28. Large‐scale solar power stations worldwide Westmill Solar Co‐operative at Blake Lapthorn
  • 29. Global solar plants 10MW+ Built Built Developing Rank Country Schemes Qty MW MW 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 25007/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 29
  • 30. Large‐scale solar power stations UK
  • 31. Westcott Solar Park07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 31
  • 32. Any questions? Contacts:About Westmill Solar: www.westmillsolar.coopAbout the Feed‐In Tariffs: www.fitariffs.co.ukAbout utility‐scale solar power: www.wiki‐solar.org @wikisolarAbout the Renewable Heat Incentive: www.rhincentive.co.ukTo contact me: philip@wolfeware.com @philip_wolfe07/11/2012 Westmill Solar Co‐operative at Blake Lapthorn 32

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