The Bigger Picture

The cost of low carbon energy : nuclear vs renewable wind and solar

Recent revelations about the £2.9bn cost increase for the Hinkley Point C reactor and likely delay to start of operation are raising alarm bells. As Hinkley C has already been branded the “world’s most expensive power plant“, the UK Government is looking at new ways of funding reactors by adding construction costs to consumers electricity bills.

Energy and Climate Intelligence Unit (ECIU) head of analysis Johnathan Marshall, commented: “New delays and cost overruns highlight why there are concerns around transferring more construction risk of new nuclear power stations onto British bill payers. Under the proposed regulated asset base scheme, energy bills will increase to pay for nuclear power stations before they start generating”

The recently released  World Nuclear Industry Status Report asserts that renewable energy is cheaper and reduces emissions faster than nuclear power.

Given the urgency of reducing CO2 emissions and minimising the cost of energy for consumers – Government investment should logically be going into funding the cheapest and fastest deliverable low carbon option – Offshore, onshore wind and solar PV.

Community Renewable energy projects are the Cinderella of the UK Government’s plans for a low carbon energy future. Yet the potential for local generation and critically – management of supply and demand at a local level – could deliver a sustainable distributed energy system that would be good for the planet at the same time as keeping consumers electricity bills affordable.

A case study for the Department of Energy and Climate Change (DECC) – Community Energy Strategy Report (2014) – illustrates this: “Feldheim, a small village south of Berlin. The village set up a cooperative to provide heat and electricity from a local biogas plant running on pig waste. They also have wind turbines and a solar PV array all connected to their own independent local Grid. The village is carbon neutral, self-sufficient in energy and any excess electricity they generate is sold back to the national grid for a profit. They also benefit from significantly cheaper energy prices than the national average.”

Norwich Community Solar Coop aspires to generate affordable local energy while returning benefits to the local community through their ownership of the generating equipment. We could see this as potentially opening-up the way to collaborate with others in making a local energy market a reality, bringing benefits ranging from decarbonisation to resilience, efficiency to equity in the energy system, home to Norwich and Norfolk.

[Written by NCS Treasurer Adrian Holmes]

News

Recent outreach events

June was a busy month for Norwich Community Solar members as we attended three events concerning sustainability and the environment. Our main event was to meet people entering the Forum where the One Planet Norwich eco-fair was being held on a rather cold, wet and windy day. Despite the poor weather, there was a great turn-out and we were able to connect with a diverse range of people who came to ask us about what we were doing.

We also found there was a number of concerns raised, including the way climate change was affecting the local weather and how things would become for the young in the future. Our aims to become successful in offering local people a chance to act on these concerns were met with an overwhelmingly positive response, reflected in the jump in our membership by 11%, taking us from 55 voting members to more that 60.

This was augmented by the efforts of others members who represented us in the local Quaker Earth Care Fair which was running on the same day in the Quaker meeting house. Here, an assembly of climate change and peace groups mixed with recycling, re-using and Traidcraft groups promoted their themes as well as enjoyed vegetarian and vegan food that was on offer from other stalls.

We also attended the Permaculture East annual gathering which was being held on the outskirts of Norwich for three days. Our Chairman, Nigel Hargreaves, gave a talk to an audience of 25 permaculture enthusiasts on community energy as a social enterprise and how that could integrate well into a broader spectrum of related social enterprises ranging from sustainable food production to transport and environmental protection. All of these would align with actions to address man made climate change forcing which as we know has been accelerating due to the release of carbon dioxide into the atmosphere from our burning of fossil fuels while undermining Earth’s natural resources to remove it.

At this meeting we discussed the possibility of forming a community social enterprise and campaigning hub based in Norwich, where we could network our efforts and leverage our expertise and resources to support one another in becoming more effective forces for change. We thought it would be worth seeking a premises, possibly an unused local authority building to renovate and become the rallying point. In addition to it becoming a focus for our individual organisations through sharing work space and ideas, it could develop to offer advice through an ‘energy cafe’, on topics such as how to find clean energy and become more energy efficient. It would be a place for learning more about the needs of our community within our varied remits and sharing with others about what we are doing. If this idea were to become a reality in future, we agreed it needs a champion to carry it forward, so if anyone is moved by this vision please do get in touch through our contact email to begin with.

News

Has the time come for community energy in Norfolk?

Recently, when discussing my experience of chairing Norwich Community Solar with a friend and member of our cooperative, he commented that perhaps there were “not enough mountains in East Anglia”. I shall return to what he meant by that later in this article, after telling you some more about community energy and the experience gained within our local solar energy community benefit society.

Up and down the country, community groups have successfully organised as social enterprises to own and deliver green energy to our electricity system as well as, more recently, tackling the issues of low carbon mobility and heat. Norwich Community Solar (NCS) was started as a Community Benefit Society by a small group of environmentally concerned residents in late 2017 and as members of Community Energy England (CEE), which represents similarly minded organisations, we are now part of a community of 228 in England and Wales [1].

Some of the earlier members of CEE have grown in terms of installing mega Watts (MW) of generating capacity (not only from solar but also wind and hydro schemes) and others have spawned new energy social enterprises from their community benefit funds. NCS aspire to follow suit, but the removal of the feed in tariff subsidy scheme has had a dramatic impact on the support for new projects. To highlight this, the number of new CEE members founded in 2017 was one, and that was NCS!

With the additional loss of the Urban Community Energy Fund (UCEF) and removal of the Enterprise Investment Scheme (EIS) eligibility for investments in community energy, NCS have entered the energy market at a particularly challenging time. One can see the perversity of this situation in terms of the leading position in the EU, the UK holds in subsidising fossil fuels[2] despite its decarbonisation rhetoric and signing of the Paris climate change agreement to limit global warming to 1.5ºC!

The need for community energy
Notwithstanding the economic dimension as a cornerstone of any successful enterprise, we are also entering an era in which NCS believe social enterprise especially, can deliver in the other ways that are becoming recognised as more important than economic growth alone. Recently we have witnessed Alexandria Ocasio-Cortez’s Green New Deal [3] initiative, the ‘world-first’ by the New Zealand government to prioritise wellbeing in its lates t budget [4] and in the UK, a recommendation [5] by an all-party parliamentary group that in the forthcoming 3-year spending review, the government should set wellbeing as the primary aim of government spending. NCS, both owned by its members and working to return benefits to the community it serves, is a means by which community wellbeing can be created and enhanced. Empowering communities in such a way will also increase their resilience in a future that is likely to be more uncertain.

What we offer
Our mission is twofold:
First, to work with local people (including land owners, other social enterprises, businesses and local government organisations) to increase the presence of community owned renewables in Norfolk and Norwich. There is a growing call for action on global warming, and interest in our organisation is expanding as we passed our 55th member-shareholder earlier this year.

Second, we are strengthening our connections with similarly aligned environmentally-oriented organisations to increase our capacity as a cooperative, but also to improve the social resilience (sometimes called social capital), and emotional and mental wellbeing of our communities. For those that see the need to change the way things are, by backing NCS we offer an avenue to exercise that need, by regaining a measure of control through cooperative ownership and collectively facing environmental catastrophe and the lack of equity in it.

NCS have a business model that offers better financial returns from investing in our projects than the financial return from putting savings in a bank. Importantly, though, at the same time we are laying a more sustainable and resilient foundation for future generations. The beauty of the model is that commitment from any individual could be as little as a £50 shareholding in one of our projects, while still providing a positive emotional return on investment. Additionally, if possible, we will offer our energy buyer, say the building owner, a discount on the energy we generate on site. In this way, we are returning the benefits to everyone involved, creating resilience and wellbeing.

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Why NCS is needed in East Anglia
East Anglia has a historical involvement in the energy industry stemming from offshore oil and gas, and recently from offshore wind. Despite the burgeoning offshore energy industry, there are still large numbers of Norfolk residents in energy poverty and unconnected to the gas grid. The only benefits to local communities are a few jobs and some collateral funding from the big energy companies. Similarly, Norfolk alone has around 42 large ground mounted solar arrays, mostly in the ownership of multinational companies and investment funds.

With this backdrop, and in an area so rich in solar and wind renewable energy resources, it could be assumed there would be a larger than average appetite for community owned renewable energy. However, not only are we home to the third lowest in the number of community energy groups compared to the rest of the country but we are also grossly underperforming in regard to community owned generation capacity as well!

Not enough mountains?
These gaps could be interpreted as an opportune moment to start a community energy project. In my two years of chairing NCS, investing hundreds of hours of free time from the NCS team, we have made proposals for community owned energy projects to over twenty Norwich based organisations.

The model in essence for each was:

  • No financial risk to the client (purchase of the equipment will be in community ownership, through crowdsourcing)
  • Offer to supply 100% green electricity at a cheaper price than the consumer will otherwise pay
  • Guaranteed professional installation and maintenance of the community-owned solar generator by NCS
  • A 25 year commitment
  • After paying our operating expenses and community shareholders interest on their investment, all surplus would to be re-invested locally in further environmentally positive schemes

Despite the obvious social, financial and environmental benefits of such a scheme we have yet to complete a single installation.

One cause could be institutional inertia. Many organisations we have encountered are structured in such a way that their decision-making processes either don’t cater for our value proposition, or prevent rapid enough decision making to engage with us. In simple terms, this results in extremely slow progress at all stages of a project proposal, with the project sometimes being lost completely at higher levels of the organisation, despite initially positive responses. Risk aversion is a likely factor in this inertia. What all this points to in our opinion, is a lack of vision for a world where wellbeing comes first, with the urgency that is now necessary. There is a need to raise our game and perhaps look to new peaks as future benchmarks – we need more mountains in East Anglia!

What we want
Having laid out the challenges, I want to conclude with what NCS want to do about it and how we can work together. We recognise that renewable energy technologies are getting cheaper and more accessible to grid edge actors like ourselves. Our vision includes innovations in PV modules, mobile and static energy storage and the use of more brownfield space to generate from – such as in solar car ports over car parks, or ground arrays mounted on capped landfill sites. But we can’t do this alone in a purely commercial market place. We need to work with organisations who are willing and ready to act on social responsibility, global warming and wellbeing in general. Individuals who also have their vision set on higher peaks and want to join us in innovating a new environmentally and socially resilient way in Norfolk. We believe this is already happening in other parts of the country as part of the trend to decarbonise, distribute, decentralise, democratise and disintermediate rolls out. Why not then in our own promising context, which is rich in natural energy resources and enterprising, green-minded communities? We would love to hear from you, if you also share this vision.

[1] https://communityenergyengland.org/files/document/169/1529576087_CEEStateoftheSectorReport2018.pdf

[2] Energy Prices and Costs in Europe, 2019; Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, European Commission, Brussels.

[3] Recognizing the duty of the Federal Government to create a Green New Deal, 2019; Ocasio-Cortez, House of Congress.

[4] Budget Policy Statement 2019; The Treasury, New Zealand.

[5] A Spending Review to Increase Wellbeing: an open letter to the Chancellor, 2019; All Party Parliamentary Group on Wellbeing Economics.

News

Goodbye to feed in tariffs

2008 was a year to remember. Not only did the government of the time put the Climate Change Act on the statute book but they also announced the feed in tariff (FiT) scheme, which came into effect in April 2010. It was designed to support the propagation of microgeneration (up to 5MW), which included small scale solar, wind, hydro, anaerobic digestion and micro combined heat and power (CHP). For solar PV the contract term for receiving the subsidies was 25 years and 20 years for other technologies. In March 31st of 2019, the feed in tariff subsidies came to an end for new installations after tapering from an incredibly generous 54.17p/kWh (for retrofit PV installations up to 4kW) to 3.79p/kWh for PV installations up to 10kW and 4.03p/kWh for PV installations between 10-50kW.

In today’s economic environment for new small scale renewables, the level of tariffs paid to the earliest subscribers seems outstanding, given that each electricity bill payer was underwriting the cost. The scheme was certainly successful in spreading the use of PV (the most popular of the technologies) but criticism was levelled at it because only those who could afford to raise the considerable purchase price of the equipment were able to benefit. Community energy schemes then became the best way to spread the financial rewards from receiving FiTs more widely, as even if you were living in a flat without owning your own roof, or had less disposable income than others, you could in theory become a shareholder in a community energy scheme and reap some financial return from getting involved. Several of the earliest community energy schemes have thus done very well financially and gone on to help newer community energy groups start-up by way of their community benefit funds.

Norwich Community Solar (NCS) was started in November 2017 and has not yet installed any PV generation or received FiT subsidies. We are part of a ‘new breed’ of community energy social enterprises that are seeking working relationships that do not rely on subsidies. The route to market for our energy is therefore a critical consideration in ensuing that we earn sufficient revenue to repay our debt to our shareholders as well as offer them a fair rate of interest on their investment in our schemes. It means that we have to be very careful in the preparation of our projects, which we model to reveal the impact of the costs and the returns we expect to gain for years ahead, There is no question that the risks for unsubsidised community energy have changed but we are confident that as the climate crisis deepens and more people realise that they can’t wait for government to respond on their behalf, we will be successful in making our contribution count.

We are excited by the rising interest in our aims and the possibility of collaborating this year to set up our first generator that our local community can stand behind. We will release more details of this project nearer the time we come to raise the finance from those that want to invest in us. We feel that we will offer not only a service to the buyer of our clean energy and our investors, but also offer a creative expression for pent up frustration at the lack of sufficient action to address climate change we see all around us. We hope this will be a catalyst for change, as once we have proven it is possible others may want to work with us in Norwich and Norfolk to add momentum to our movement for cleaner air, community resilience and capacity in the years to come. So it may be good bye to the FiTs, but as we continue to grow in number through membership of our cooperative, we are confident that better, more sustainable community engagement is developing.

If you would like to join us, please go to our membership page to find out more.