Patrik Kolar, Head of Department B (LIFE and Horizon 2020 Energy, Environment...
HOMES CONFERENCE
1. Income Generation and the Energy Markets
John Harrison
Managing Director of Blue Sky Peterborough Limited and
Executive Director, Resources for Peterborough City Council
26/27 November 2014
Olympia London
3. The Peterborough approach:-
• Generate Renewable Energy
• Reduce Energy Consumption
• Enable regeneration
• Reduce carbon
• AND:
• Get financial benefits to the city
• AND LAST BUT NOT LEAST!!!
• Make and save money!
Energy Strategy
5. Energy The Driver
Energy
SWITCHING
• Collective
• Energy
Package
EFFICIENCY
• Domestic
• Non Domestic
GENERATION
• Energy From
Waste
• PV
• WIND
• District
Heating
• CHP
ENERGY
SUPPLY
• Trading
• Tariff
• Self Supply
REGENERATION
• Smart City
• Gigabit City
Energy : The drivers for the Council
7. Solar PV projects
Solar projects - Complete
Completed - Peterborough
1.26MW of roof mount solar including:
• Town Hall
• Regional Pool
• Sports Centres
• Commercial Roof
• 12 Schools
Completed – Colchester Borough Council
0.5 MW of roof mounted solar including:
• Leisure Centre
• Offices
• Sports Pavilion
• Crematorium
Bushfield Sports Centre - Before
Bushfield Sports Centre - After
8. Solar PV projects
Solar projects
Work in progress:
Peterborough
• Phase 2 of PCC Corporate Properties 9 properties 0.2MW
• Phase 3 of PCC Schools (43 Schools in total) 2.28MW
• 3 industrial estates 1.22MW
Colchester Borough Council
• 4 installations to Colchester CC at 0.25MW.
Under Development
• Commercial Roofs in Peterborough
• Private residential solar offering to all residents
• South Cambridgeshire District Council, 3 Corporate Buildings and
1500 Houses
• Axiom Housing Association – Corporate Buildings and Houses
• Roll out to other authorities - proposals currently with 14
authorities for approval.
Bushfield Sports Centre - Before
Bushfield Sports Centre - After
9. PV
Contract
Design
Supply
Install
CapEx
FIT /
PPA
O&M Bankable Panels
P90 Guarantee
PCC Procurement
Collateral Warranties
MCS Installers
Year 1 O&M
Self Funded OR
External Funded
Commercial Model
FIT / PPA Admin
Cost Neutral
Year 2 Onwards
Mears Contract: Outline scope
10. Host confirms 3rd
party finance required
Free Feasibility Development Construction Transfer
Host
Initial
Portfolio
Initial
Assess
Confirm
Viability
Confirm
Interest
Sign LoI
&
Pay Access
Fee
Conduct:
Surveys
DNO
Planning
Issue Roof
Access
Agreement
Review Roof
Access
Agreement
Sign Roof
Access
Agreement
Sign
Off
Sign
Off
Host pays
Final
A/C
PCC
Submit
Final
A/C
Sign
Asset
Purchase
Agreement
PCC
Mobilise
Mears
PV
Install
Commission
Plant
Operational
PCC
Introduce
Funder
PCC Issues
Roof Access
Agreement
Funder &
Host
Discussion
Funder Issues
Asset
Purchase
Agreement &
Lease
Review
Funder
Offer
Funder
Confirms
to PCC
Go
Agree
Funder
Offer
CONSTRUCTION
Review Roof
Access
Agreement
Sign Roof
Access
Agreement
CONSTRUCTION Submit
Final
A/C
Funder
Pays
Final A/C
Sign
Asset
Purchase
Agreement
Sign Lease
With
Funder
Funder
Assigns
FiT &
PPA
Plant
Operational
Issue
LoI
Mears solar contract: Overview
11. PV Assessment
ITEM UNIT VALUE
Lifetime Total Income
(FIT + Export)
£ 1,035,986
Finance Costs
(20yr term, 4.4%)
£ 788,394
Lifetime Operating Costs £ 115,743
NET POSITION (+/-)
Assumes all income due to HA
£ 131,849
PV Assessment
ITEM UNIT VALUE
No. of Houses No. 100
Solar Irradiation Hours 1020
Total Plant Size (4kW
each)
kW 400
Total Yr 1 Energy Yield kWh 346,800
Total CapEx £ 540,000
O&M Cost p.a. £ 5,787
Lifetime CO2 avoided ton / yr 3,752
NB: the Net position shown here, does NOT
include the energy generated and given / sold to
the tenant
(assumed to be free, hence not include)
Roof PV : Business Case Example – Residential Roof –
Housing
12. NB: year 1 below is first full year of operation / assumed schools pay for energy
PV Assessment
ITEM UNIT VALUE
Yr 1 Energy @ £8.50 /
MWh
£ 3,637
Yr 1 FIT @ £10.92 / MWh £ 6,489
Yr 1 Export @ £4.77/ MWh £ 510
Yr 1 Income ( inc Schools) £ 10,636
Lifetime Incentive Income £ 153,211
Lifetime Total Income £ 281,224
Lifetime Operating Costs £ 51,272
Lifetime Funding Costs £ 122,736
NET POSITION (+/-) £ 107,216
PV Assessment
ITEM UNIT VALUE
Roof Area m2 350
Solar Irradiation Hours 1020
Plant Size kW 50
Yr 1 Energy Yield kWh 51,000
CapEx £ 72,000
O&M Cost p.a. £ 1,276
Insurance Cost p.a £ 230
CO2 avoided Kg / yr 20.5
Inflation %
HMT then
2.5%
Roof PV : Business Case Example – 50 KW Roof
Based on 100% Feed In Tariff for first 25 sites
13. Ref Scenario Net Nominal Position
(£)
BC Base Case 107,216
a Capex decreases by 10% 119,932
b Capex increases by 10% 94,500
c Yield increases by 10% 135,339
d RPI increases by 0.5% 121,328
a+c Scenario 1 148,055
b+c Scenario 2 122,623
a+c
+d
Scenario 3 164,014
Roof PV : Business Case Sensitivity
14. Assumes: Grid connection of £25,000/MW; self-funded via PWLB at ~4.4%
Business Rates - £0.72m in addition to the above if Council is the planning authority.
PV Assessment
ITEM UNIT VALUE
Yr 1 FIT @ £63.80 / MWh £m £0.34m
Yr 1 PPA @ £54 / MWh £m £0.32m
Lifetime Incentive Income £m £7.93m
Lifetime PPA Income £m £11.77m
Lifetime Operating Costs £m £3.87m
Lifetime Funding Costs £m £3.25m
Total Net Position £m £7.82m
PV Assessment
ITEM UNIT VALUE
Land Area Acres 30
Solar Irradiation Hours 1020
Plant Size MW 5
Yr 1 Energy Yield MWh 5100
CapEx £m £4.76m
O&M Cost p.a. £m £0.14m
CO2 avoided tonnes 2.3m
Renewables : Business Case Example – 5MW Solar Farm
16. • Number of switching rounds = 7
• Estimated total energy savings of £586K
• 5495 switches across all authorities
• Current average saving per household per annum £191,
savings range between £38 to £301
• 436 local switches – (from first 6 rounds)
Tariff switching: Domestic
17. • Peterborough energy package (PEP), announced
early March 2014
• What is it? A unique set of benefits drawn together
as an alternative to collective switching
• First in UK partnership of it’s type
• Variable tariffs available from BG’s range, first
phase focussed on ‘Fix & Control’ tariff i.e ‘Hive’
(average annual savings of £150)
Energy Package
18. • Phase 2 is based on ‘Fix & Reward’ tariff i.e £50
gift card at high street retailers
• Measurable Financial benefits aimed at reducing
energy consumption include:-
– £50 Gift Card
– Free ECO assessment or reimbursed Green
Deal Assessment
– A smart meter assessment / installation
– Nectar points
Energy Package
19. • Typical first year savings per annum with ‘Fix & Reward’:-
Benefits in phase 2 Value
Dual Fuel Discount £15
Gift Card Saving £50
Green Deal or ECO Assessment £129 - £140
Smart Metering £65
Nectar Points £7
Savings Range £266 - £277
Energy Package Benefits
20. Energy Package Financial Benefits
• 232 households signed up to date on
Phases 1 and 2 combined
• Over 50 enquiries received on accessing
free home efficiency measures through
ECO funding on Phases 1 and 2 combined
• Total indicative savings to residents of
£14.5K per annum in Phase 1
21. Mark Group & EON
• Succeeded in a £3.9 million GDCF bid to DECC
• Target Area of 11000 ‘hard to treat’ homes, predominantly
of solid wall insulation
• Phase 1 focuses on 10 streets comprising of 3000 homes
• Expectations are to install measures to 1400 to 2000
homes
• Together with ECO Funding and Green Deal Finance
Plans, the total project is worth approx. £12 million
Green Deal Community Fund
22. • 10 ‘showhomes’ to be given a free makeover comprising
of external wall insulation, loft insulation, window
replacement and boiler replacement
• Appointed two Green Deal Providers and EWI installers,
EON and Mark Group on a four year framework open to
all authorities in the UK
• Framework will have provision to include any measures
undertaken under the recently announced Green Deal
Home Improvement Fund and any future funding streams
• Target date of delivery March 2015
Green Deal Community Fund
23. NB: year 1 below is first full year of operation
PV Assessment
ITEM UNIT VALUE
Yr 1 Resident Free
Energy @ £10.00 /
MWh: 70%
consumed
£ 242
Yr 1 FIT @ £12.94 / MWh £ 448
Yr 1 Export @ £4.77/ MWh:
30% export
£ 49
Yr 1 Total Income
(FIT + Export)
£ 497
Yr 1 Income Nett
(minus O&M)
£ 432
PV Assessment
ITEM UNIT VALUE
No. of Houses No. 1
Solar Irradiation Hours 1020
Total Plant Size (4kW
each)
kW 4
Total Yr 1 Energy Yield kWh 3,468
Total CapEx £ 5,400
O&M Cost p.a. £ 65
Roof PV : Business Case Example – Residential Roof –
Tenant Energy Free Solar PV projects
24. COST OF INTERVENTIONS TO COUNCIL / LANDLORD
SWITCHING ………….INCOME
ENERGY PACKAGE ….INCOME
ROOF PV …………NET PROFIT
25. TACKLING FUEL POVERTY
INTERVENTIONS SAVING
Per annum
Switching £190
Energy Package – smart meter £ 65
Roof Pv £240
TOTAL SAVING £495
Average Dual FUEL bill is:
£1264
CUT BY
39%
30. • Our framework contracts with Honeywell and Mears were procured through OJEU
procurements
• Honeywell:
– Peterborough City Council procured as Central Purchasing Organisation
– Open to all LAs across the UK
• Mears:
– Ability to install on LA and other roofs across the UK
– Ability to install ground mount PV
• Ichoosr:
– Collective Switching
• Mark Group & EON
– Green Deal Providers and External Wall Insulation Installers
– Open to all LA’s across the UK
• Our advisor contracts with Pinsent Mason, EC Harris and Deloittes were procured
through the Crown Commercial Services (CCS) Frameworks
Procurement issues
32. John Harrison
Executive Director Resources
Peterborough City Council
Managing Director, Blue Sky Peterborough
john.harrison@peterborough.gov.uk
+44 (0) 1733 452 520
Next steps ….visit Stand H166
32
Dean Wincott
New Business Director
Mears Group PLC
Dean.Wincott@mearsgroup.co.uk
Tel: 01322 319 560
Mob: 07918 704 142
