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UK-SDA
… taking a look at funding models
for local renewable energy …
achieve greater energy self-sufficiency and help meet
an identified mid-term shortfall in national power
generation caused by the closure of a large number of
first generation nuclear power stations and old, dirty,
coal powered stations.
a rural case study …
A planning application for a 50MW wind-farm at
Davidstow, close to the NE corner of Bodmin Moor, has
recently been granted subject to a full Environment
Impact Assessment. The developer, Community
Windpower Ltd, has offered the Camelford & Delabole
Development Trust (there are about 2,000 inhabitants
in each community) a compensating income each year.
On 15 July 2009, Ed Miliband, the Secretary of State for
the Department for Energy & Climate Change (DECC),
The modern 2.5-MW turbines, in an area with average
announced a two tier system of subsidies for Renewable
windspeeds in excess of 7m/sec, should achieve a
Energy, with large installations of over 5-MW installed
capacity factor between 30% and 34%. This means that
capacity continuing to receive Renewables Obligation
the energy generated in an average year can be
Certificates (ROCs) for their electricity, whilst installa-
calculated as around 140,000-MWh (20 x 2.5MW x 32%
tions under 5-MW would receive, from April 2010, a
x 365 x 24), with each MWh receiving a single ROC,
range of Feed-in-Tariffs (FITs). These are designed to
worth about £50, plus the wholesale price paid by the
ensure that small domestic installations of different
Grid, which should be at least another £50.
types (solar PV, wind, hydro etc) can compete in terms On this basis, the wind-farm should generate gross
of pay-back time with larger systems. revenues of £14,000,000 pa which, allowing 10% for
Further, from April 2011 a range of Renewable Heat
operating and maintenance costs and finance costs of
Incentives (RHIs) would be introduced to reward
around £3,800,00 pa, would leave a net profit before
renewable heat in a similar way to the proposed FITs.
corporation tax of £8,800,000 pa. Under Phase 3 of the
Responses to the DECC FIT paper were submitted by
EU’s Emissions Trading Scheme, the developer may
15 October and DECC has said that the Government
also be able to claim tradable carbon credits currently
response should be expected early in the New Year. A
worth €14/ton on the 67,000-tons pa of CO2 saved to
consultation paper on the RHIs will be issued in the
earn a further £840,000 pa.
next few months, to prepare people for the RHI Such projections should leave ample scope to ensure
introduction in 2011. that, through legislation or the planning approval
process, financial compensation can be fed back into
large-scale wind … directly affected communities via Trust arrangements.
The Government is also introducing a new planning
process for large-scale RE installations of over 50-MW
local renewables leverage …
as these are viewed as being of national importance. This could have a valuable secondary impact on national
They will therefore go before an independent panel of renewables strategy in that the guaranteed (for 20-years)
experts for the final approval, rather than the decision income being made available to local Trusts in this way
being made at county or district level. We can therefore could be used to raise capital that could be lent to
expect most wind-farms to be at least 50-MW in order homeowners to work alongside the Conservative Climate
to by-pass the local planning process. Change pledge of a £6,500 grant per house for insulation
While the new arrangements can be seen as an erosion
and renewable energy.
of the democratic process, it can also be argued as Assuming a Trust benefits from, say, a 5% levy from a
being essential if the Government is to meet its EU nearby large scale wind development, this might enable
imposed climate change target of moving from about a sum of £8,500 to be made available as a loan to
1.5% Renewable Energy to 15% by 2020. The policy will individual households, typically to be spent to achieve
help achieve two other strategic aims, namely to additional renewables impact along the following lines:
| 18 |ENVIRONMENT INDUSTRY MAGAZINE
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