Local Energy Devolution in in Practice Dan Nicholls Cornwall - - PowerPoint PPT Presentation

Local Energy Devolution in in Practice

Dan Nicholls Cornwall Council

Cornwall’s journey - local energy economy

Cornwall’s energy spend

Cornwall Devolution Deal

Devolution focus

Supporting communities Supporting the growth of community energy in Cornwall and

beyond

Supporting communities - Funding

Cornwall Revolving Loan Fund

• £800k loaned
• £1m committed
• 1.5MW enabled

Supporting communities - Planning

http://www.cornwall.gov.uk/renewableenergy

Supporting communities - Innovation

Cornwall Devolution Deal

• Community heat (off gas)
• Community supply

Green transport

Developing the largest rural electric vehicle charging network

Electric car charging network

Affordable homes

Opening up ECO to local people that need it

Energy efficiency

Green economy

Fostering green innovation, new technologies and opportunity

New capacity and local ownership

New technologies

Smart & local energy market

Cornwall’s local energy economy

LED installation in Street Lighting and other Energy projects in Gloucestershire

Peter Wiggins Outcome Manager, Community Infrastructure Commissioning ‘Place’

How we got here……..

• 60,000 street lights – costing £2m per year to keep lit
• Electricity costs expected to rise, 57% of service spend

and requiring annual growth bids

• Energy efficiency projects – dimming, part night lighting

(gone about as far as we could go)

• 53% of CO2 footprint (excl schools)
• Carbon reduction target, 60% by 2020/21 – not

achievable without significant change in street lighting

LED Technology

• Mainstream solution
• Up to 50% energy saving, can then be dimmed
• 70% reduction in maintenance cost, fewer faults
• Better light quality – whiter so easier to see
• Less light pollution – better focussed
• Lighting for residential areas relatively mature
• Traffic routes need brighter lighting – more expensive but

also more energy efficient, cost still likely to fall as matures

Before After

Example of LED Scheme

Market Engagement Event

• Test our assumptions
• Whether right to time to enter market
• Scale – county-wide, market towns, Glos & Chelt
• Whether CMS advanced enough, eg common TALQ

platform

• Financial modelling, PWLB rates

2 4 6 8 10 12 14 £ Millions

Street Lighting Budget Requirements including Energy from Waste

Cost avoidance Cashable savings (after investment repaid)

2 4 6 8 10 12 14 £ Millions

Street Lighting Budget Requirements including Energy from Waste

Cost avoidance Cashable savings (after investment repaid)

£1.1m budget shortfall to 2016/17

• 2

4 6 8 10 12 14 £ Millions

Street Lighting Budget Requirements including Energy from Waste

• traffic routes last, 60% GCC Funded, 70% dimming with CMS

MTC2 £1.7m cost avoidance, MTC2 Cashable saving Initial investment repaid

Cost avoidance Cashable savings (after investment repaid)

Funding

£m DfT Challenge Fund 5 Salix Energy Efficiency Loans (SEELS) 4.7 GCC Salix Recycling Fund 1.5 GCC Capital Receipts 2.5 Total £13.7m

0.0 0.5 1.0 1.5 2.0 2.5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Energy Cost (£Millions) CO2 (thousand tonnes) Financial Year Start

Street Lighting, LED with CMS Implications

Street Lighting CO2 Street Lighting CO2 Forecast Street Lighting £ Street Lighting £ Forecast

• 5

10 15 20 25 30 Financial Year Start Actual Emissions Predicted Business as Usual Emissions Rebaselined Predicted Business as Usual Emissions Target Emissions Emissions in CO2 reduction plan CO2 (thousand tonnes)

Carbon progress against 60% reduction target on 2006/07 baseline

Further Energy Work

Done almost all we can energy efficiency-wise

• Insulation – loft, wall, pipes
• Heating & lighting upgrades and controls, remote BEMS
• Office rationalisation
• Shire Hall refurbishment, inc cladding, new windows,
• pen plan, thin client
• ICT – server virtualisation, moved off-site, upgrades
• LED street lighting with CMS, bollard de-illumination, LED

signs & bollards Saving over £1m a year

Further Energy Work

Now set to become a net electricity producer

• Residual Waste Project, Energy from Waste plant 2019
• 116,000 MWh generation
• Renewable energy generation
• £12.7m for ground-mounted solar (GMS), approved by Cabinet on

the day DECC published subsidy consultation

• Now putting in grid connections for battery storage, some with GMS

to follow, plus solar car ports inc private wire

• Working with APSE Energy

Local Advisory Adaptation Partnership (LAAP)

• Established 2011 - forum for Local Government, Central

Government and arm’s length delivery bodies

• Key role in shaping the Local Government Chapter of the National

Adaptation Programme report (NAP), published in July 2013

• Now chaired by Gloucestershire County Council
• Inc reps of Climate UK; Local Authorities; DEFRA; the Environment

Agency and the Local Government Association (LGA)

• Series of meeting to better understand the risks to areas

that are being impacted by climate change

• ADEPT will help to input technical advice, with political

input via the LGA

LAAP

• Meetings around the CCRA receptors
• July 2016 Infrastructure
• Sep 2016 Heat & Built Environment
• Nov 2016 Natural Capital
• Jan 2017 Public Health
• Outputs will help to identify any gaps in existing

Government policy and suggest modifications to policy to improve the country’s resilience to climate change

• Submit for inclusion within the next iteration of the

National Adaption Programme (NAP) due to be published in 2018

LAAP

If anyone is interested in becoming more involved or have colleagues who might assist, please contact Nigel Riglar, LAAP Chair at nigel.riglar@gloucestershire.gov.uk

Thank you

Peter Wiggins Outcome Manager Commissioning Gloucestershire County Council 01452 328538 peter.wiggins@gloucestershire.gov.uk

A Guide to Delivering a Standalone Battery Project

This guide has been created to provide Local Authorities with all the necessary information and reasons to instigate a strategy to deliver a standalone battery programme.

Electricity purchased at low costs in early morning

What Is Standalone Battery Storage?

Answer : It is a battery on a small parcel of ground that has no requirement for renewable energy generation Electricity is purchased from the grid when prices are at their lowest and then resold between 4-7pm during the Red Zone when the highest prices can be obtained. This transaction is controlled by an ‘energy trader’ whose responsibility it is to manage the battery and maximise the financial income achievable. The battery must be carefully ‘specified’ to be able to charge and discharge quickly in order to for the process to be repeated at peak times. The quicker the process, the greater the revenue earning potential. Procurement of energy trader and battery must be managed as a package.

Electricity sold at higher prices 4pm-7pm

Reasons To Consider Standalone Battery Storage?

Reason 1 : Financial Returns

• Attractive income for 10+ years
• Capital repayment within 7 years

Reason 2 : Urgency is Required

• Limited connection capacity in the grid
• Private developers are ‘capacity bagging’ in the same way as they did with ground mounted solar
• National Grid’s storage contracts have been allocated to energy traders who are allocating them to

battery owners on a first come basis LOCAL AUTHORITIES SHOULD MAKE FORMAL GRID APPLICATIONS BY DECEMBER 2016 TO SECURE THEIR POSITION WITH THE GRID Reason 3 : Small Parcels of Land Required

• 1 MW of Battery Storage = 40ft container = 90 sq m of land required

Reason 4 : Local Authority Can Choose Level of Financial Risk and Financial Reward

• Three possible options available

Reason 5 : De Risked Delivery Process

• Asset Utilities can de-risk the delivery process and provide the local authorities with investment options

to match a risk and reward profile

Example of Financial Returns : Option 1 – Local Authority Owns the Battery

• £1,144,000

• £115,000

• £734,000

• £37,000
• £37,740
• £38,495
• £39,265
• £40,050

• £1,993,000

• £1,993,000
• £1,651,579
• £1,304,948
• £943,924
• £573,979
• £175,530

This example is for a 2 MW (import of 2 MW and export of 1 MW) battery with no renewable energy generation. Land required 180 sq m. A 5 year model has been shown as the industry is only able to provide with present contracts for this period Battery has a 10 year warranty which can extended to year 15. The grid connection is an assumed maximum. A lower connection cost will enhance the financial model and reduce the capital repayment period. Capital repayment is achieved in year 6. Further energy trading assumptions to support the model are available.

Battery Technology + Energy Trader = Required as a Package

Energy traders have the contracts with National Grid, which battery owners require to access Energy traders will only accept projects that have a proven viability :

• Site Survey
• Full Financial Feasibility

Energy Trader

FFR Firm Frequency Response CM Capacity Market Triads GDUoS

Ownership and Investment Options

There are principally three options with different levels of risk and reward that can be considered.

Option 1

Local Authority Owns the Battery HIGHER RISK : HIGHER REWARD

Option 2

Shared Income / Profit Model MEDIUM RISK : MEDIUM REWARD

Option 3

Local Authority Receives Rental income for 15 years LOWER RISK : LOWER REWARD Reward Potential Capital repayment within 7 years By negotiation ** £7,000-£10,000 pa rental for a 1 MW battery Grid Application * Local Authority Local Authority Local Authority Procures and Pays for Battery Local Authority Investor Investor Planning Application Local Authority Local Authority / Investor Investor Pays for Grid Connection Local Authority Local Authority / Investor ** Investor Appoints and Manages the Energy Trader Local Authority Investor Investor

Notes * Grid Application – securing connection capacity increases the land’s capital value. The capital value will be further enhanced if no further capacity is available to other battery developers ** Share of Income or Profit – this is by negotiation on a site by site basis. The local authority is able to define what they wish to commit to the project e.g. the land, capital, the cost of the grid connection etc. which defines the financial reward received.

Key Strategic Actions and Considerations

Securing The Grid Connection The starting point to secure the grid connection. There is limited capacity in the grid and if the Local Authority fails to secure a grid connection, a private developer will. Enhanced Land Value The grid connection demonstrates the site can be developed for battery storage. This site therefore has a value to battery investors, which enhances the land value. Ownership and Investment Options Available The Local Authority has the ability to choose the level of risk and reward required. Option 1 : Local Authority Owns and Operates the Battery HIGHER RISK :HIGHER REWARD

Option 2 : Shared Income / Profit Model MEDIUM RISK : MEDIUM REWARD Option 3: Local Authority Receives Rental income for 15 years LOWER RISK : LOWER REWARD

Questions You Should Be Asking

Grid Connection

How do I know if there is capacity in the grid for a battery? How much import and export capacity is required? How do I make a formal application to the DNO? How can this application process be managed effectively? How can my application be ahead of the competition? How can I reduce my connection costs?

Battery Choice and Location

What size and type of battery is required? What size of land is required? What distance do the battery sites need to be located to the DNO’s connection point into the network? What effect does that distance have on the connection cost and the financial returns?

Financial

How is money made from the battery? Who will managed the energy trading element? How do I know this is being managed effectively? What level of financial return can be achieved? How can I use battery storage to enhance the capital value of my land? How can I limit risk by working with a battery investor?

Delivery Process

What is the process from project commencement, to grid connection, to procurement to operation? How can consultancy fees be limited to de-risk the project? How can ‘gateways’ be built into the project to protect the local authority? How can procurement procedures be managed effectively? How do you procure a battery and an energy trading contract? How quickly can an income be generated?

Which other local authorities can I work with to knowledge share?

Delivery Process

1 month 3 months

Gateway 1 : Viability Assessment Asset Utilities Site Identification : Local Authority Gateway 2 : Grid Delivery Asset Utilities Project Delivery : Local Authority

Delivery Process Gateway 1 : Viability Assessment Timescale : 1 month

Report demonstrating the viability of battery storage, the extent of delivery and financial benefits to the local authority. This assessment ensures that the local authority only commits funding into viable projects Grid Assessment : Assess the import and export capacity at all DNO primary substations in the local authority area OUTPUT : This defines the size and number of batteries that can be connected to each substation Site Location Assessment : Identify the distance sites can be located from each primary substation, OUTPUT : Location report recommending where land should be identified Energy Trading and Financial Modelling : Produce financial models (high level) for different battery sizes at EACH primary substation SEE NEXT SLIDE : Understand importance of working with an ‘energy trader’ to access CM (Capacity Market) and FFR (Firm Frequency Response) OUTPUT : Accurate financial modelling specific to the local authority’s project : Access to key players with National Grid contracts Battery Storage Ownership and Investment Options : Options provided that illustrate levels of risk and reward and the key players in the market OUTPUT : Local authority able to evaluate financial returns Key Battery Storage Information : Key information regarding battery container and land sizes, recycling, planning, visual impact etc OUTPUT : Local authority able to strategically plan more effectively

Delivery Process Gateway 1 : Viability Assessment

GRID WORK : required because each primary substation produces different results : Local Authority can assess the financial models (high level) for each primary substations

Primary Substation Location and mpan number Available import capacity FFR rate

Energy Trading and Financial Modelling : Financial models (high level) are different at EACH primary substation

Delivery Process : Site Identification – Local Authority

Local Authority locates sites within agreed distances to each primary substation. Local authority can also consider purchasing suitable land.

Gateway 1 : Viability Assessment Asset Utilities Site Identification : Local Authority Gateway 2 : Grid Delivery Asset Utilities Project Delivery : Local Authority

Produces an ENQ number which guarantees a priority position in grid queue

Delivery Process Gateway 2 : Grid Delivery Timescale : 3 months

Delivering the project is completely subject to securing a grid connection. Local Authorities can during the 3 month grid process complete all necessary due diligence Timescale Day 1 2 Weeks Month 1 Month 2 Month 3

Formal grid application made for each site Budget grid application made for each site Unsatisfactory quotations result in formal applications being withdrawn. Local Authority benefits from abortive fees for formal applications. Local Authority considers battery

• wnership and

investment options Energy trader requires site survey and financial feasibility report completed Completed on 1 site to provide comfort in process (after budget) quote received Reports produced

• n all sites

Triggers pre development offer from energy trader Further discussions

• n planning and

local authority requirements

Delivery Process : Project Delivery - Local Authority

Project Delivery is driven by the Local Authority and includes the stages and timescales to achieve cabinet approval. Within this Gateway are the following considerations :

• Procurement of choice of battery and energy trader or negotiations with

battery investor

• Timescale for battery ordering (typically 4 months)
• Commencement of planning application
• Acceptance of DNO formal offer (will have 90 day validity period)
• Instruction of DNO works and connection
• Instruction of onsite grid connection works
• Cabinet report and approval

Gateway 1 : Viability Assessment Asset Utilities Site Identification : Local Authority Gateway 2 : Grid Delivery Asset Utilities Project Delivery : Local Authority

Turning an Unviable GMS site into a Viable Project

Ground Mounted Solar 1 MW

• Connection cost £125,000

Answer Develop the site as Battery Storage 1 MW (import) and 500 kva (export) GMS 500 kva The battery generic financial model shows a payback before the end year 7. However, model includes an assumed grid connection cost of £604,000 but actual cost is £125,000. The saving of £479,000 reduces the payback before the end of year 5. The GMS site can then be developed at an agreed date with no connection charge

• £572,000

• £60,000

• £604,000

• £18,500
• £18,870
• £19,247
• £19,632
• £20,025

• £1,236,000

• £1,236,000
• £1,065,290
• £891,974
• £711,462
• £526,490
• £327,265

Next Stages

Initial meeting with the Local Authority to explore

• pportunities

Fully costed proposal submitted Local Authority either approves feasibility or decides not to proceed

Gateway 1 :

Viability Assessment

• defines the
• pportunity

Gateway 2 :

Grid Delivery

• makes the

project viable Contact Information Marc Wynn Director 07798 646 936 marc@assetutilities.com

42 Westdale Drive Moodiesburn Glasgow G69 0NR 01236 872 925 www.assetutilities.com

Bristol City Council What’s next for community energy? A local authority perspective

Lorna Edwards

Community Energy Project Manager

£1 million spent

• n energy every

day in Bristol

Bristol’s Energy Service

Our Investment team leads on renewable energy installations and community energy projects which help local people to invest in clean energy like solar power. Our Warm Up Bristol scheme is an initiative designed to make the private housing stock in Bristol more energy efficient to create cosier, healthier homes and reduce carbon emissions. This scheme focuses on projects which will improve Bristol’s energy

• security. We're working on installing heat and energy networks to

supply more efficient and lower carbon heat and power to the city.

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9 7 5 3

2012 Jan 2014 May 2015 2016 Going forwards Nov 2014 2015 2016

DECC Community Energy Strategy Competition launched to find local community group providers Construction

• f a 4.2MW Solar

Farm completed at Lawrence Weston Future projects? Easton Community Centre 18kW installation Cabinet Report Community Investment in Renewables DECC community Energy funding received Bristol Energy Cooperative have a pipeline

• f 20 projects

Community Renewables installed so far: 4.299MW

Bristol City Council & Community Energy

2011

Catalyst Fund launched

1

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www.bristolcommunityenergy.co.uk

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What’s next?

Funded Projects

Governance…

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What’s next?

What’s next?

Keep in touch

Mareike Schmidt: mareike.schmidt@bristol.gov.uk

@Energy4Bristol

Bristol Community Energy

www.bristolcommunityenergy.co.uk

Thank you!

Lorna Edwards

Lorna.edwards@bristol.gov.uk www.bristolcommunityenergy.co.uk @energy4Bristol