UKPVC 2010 Paul Lewis - The Energy Performance Guarantee - overcoming the commercial obstacles


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UKPVC 2010 Paul Lewis - The Energy Performance Guarantee - overcoming the commercial obstacles

  1. 1. 22 June, London<br />The Energy Performance Guarantee<br />Overcoming the commercial obstaclesof PV implementation in the UK <br />Paul Lewis<br />Self Energy UK<br /><br />UK<br />
  2. 2. Agenda<br />UK<br />1. What is the opportunity – an investor / developer view of the UK FiT<br />2. Key Challenges to overcome<br />3. Lessons learnt in Europe<br />4. Energy Supply vs Energy Performance and the Rooftop delivery model<br />
  3. 3. Self Energy – a modern day ESCo<br />UK<br />Decentralised Energy partner working with organisations across Europe to cut energy costs and carbon emissions<br />Financing of integrated onsite, decentralised heat, power and cooling generation for the built environment. <br />Experience of working with feed-in-tariffs and national Carbon Reduction Commitments across Europe<br />Takes on risk and financial burden of Energy Performance Projects<br />Techology “agnostic” but focus on PV in markets with feed-in tariff<br />Working to overcome key barriers to implementation of Decentralised Energy:<br /> Project / Performance Risk<br /> Capital availability<br /> Operation and Maintenance expertise and capacity<br />
  4. 4. The UK PV Opportunity<br />UK<br />Why invest in PV?<br />Long term investment of 25 years<br /><ul><li>Stable, predictable returns</li></ul>Reliable, low maintenance technology <br />30MWp implemented<br />250+MWp short term opportunity (to 2012)<br />
  5. 5. Overcoming the challenges<br />UK<br />Experienced Project Developers<br />Planning and grid issues (G59) tackled and resolved early<br />Clear O&M Strategy<br />technical due dilligence<br />Proven contractors at similar project size<br />Legal due dilligence<br />Balanced risk/reward for project stakeholders<br />Legal due dilligence<br />Financial due dilligence<br />Well resourced Contractors<br />Access and security<br />
  6. 6. Lessons Learnt in Europe<br />UK<br /><ul><li>Feed-in Tariff since 1991 – modified in 2000 and 2004
  7. 7. 12% of energy from renewable sources (4.6% in UK)
  8. 8. 300,000 jobs in the sector</li></li></ul><li>Case Study: Self Energy Project <br />UK<br />Gran Canary Island Rooftop PV<br /><ul><li>3 MWp over 40 schools and public buildings
  9. 9. Initial 1.4MWp, additional 1.6MWp in 2010
  10. 10. Feed-in-Tariff €0.31/kWh
  11. 11. Financial benefits of €2m for client
  12. 12. Self Energy provided the capital and will recover the investment over 25 years
  13. 13. Carbon Dioxide emissions reduced by over 4200 tonnes each year</li></li></ul><li>Delivery model – <br />Supply vs Performance <br />Supply – Self Energy Rooftop model<br />Rent of roof / ground space<br />Due Dilligance<br />Investor provides capital to install PV system<br />Generation of electricity <br />FiT / Energy saving benefits shared by project stakeholders<br />O&M covered (and guaranteed) by ESCo<br />
  14. 14. Energy Performance Guarantee<br />UK<br />ESCo input:<br />Knowledge<br />Risk Mitigation<br />Delivery<br />Finance<br />Building Operator<br />Building Operator<br />Total Energy <br />savings<br />ESCo only paid by % of net savings<br />Total Energy <br />Consumption<br />(current)<br />ESCo<br />Total Energy <br />Consumption<br />(post implementation)<br />Beyond the end of <br />Performance Guarantee<br />Before<br />- Fixed term partnership period<br />- Benefits shared during the partnership<br />
  15. 15. Southern UK example – 350 kWp<br />UK<br />50,000 square foot and a pitched roof.<br />Project Accumulated Cash Flow<br />Investable returns<br />Strong end user benefits with zero end user risk<br />
  16. 16. Parting thoughts<br />UK<br /><ul><li>21 months until April 2012 – we need to move quickly and diligently
  17. 17. Strong partnering is the key opportunity to maximise returns – there is enough opportunity for everyone
  18. 18. Every project needs to assessed on its own merits
  19. 19. Opportunity to utilise ESCOs to remove risk and provide capital
  20. 20. New wave of ESCOs looking for opportunities in UK PV – the financing opportunities are there. </li></li></ul><li>22 June, London<br />Paul Lewis<br />Self Energy UK<br /><br />The Energy Performance Guarantee<br />- Overcoming the commercial obstaclesof PV implementation in the UK <br /><br />UK<br />