Understanding Lower Project Performance in 2016-17

Headlines

  • Overall our project portfolio performed 5.4% below target in the year April 2016 to March 2017, with the Portworthy project performing 10% below target.
  • Whilst there have been some minor operational performance issues, that are now largely resolved, the most significant reason for the lower performance has been lower than average sunshine levels.
  • Analysis suggests that sunshine levels during the last two years have been significantly below average at all our sites.
  • Evidence suggests that longer term performance should return to predicted levels.

Performance against targets

Our total project portfolio performed 5.4% below target during the financial year to end March 2017 compared to a just below target the previous year (Fig. 1). Fig. 2 breaks down performance for last year by location.

 

 

 

 

 

 

 

 

As you would expect the BWCE Board are concerned about the causes of the underperformance and any long term implications, given the impact underperformance has on BWCE’s income.

Operational performance

We have had some minor inverter and shading issues during the year on our smaller roof projects which have been, or are in the process of being, resolved. These issues have not had a material impact on the overall performance of the portfolio.

The performance of the actual panels at all three larger sites, Wilmington, Crewkerne and Portworthy has been good. The performance ratio, or the efficiency with which the panels are converting solar irradiation into electricity, has been above target for all three projects. So the panels are working well.

A reduction in the efficiency of the solar panels themselves of 0.5% per year has been taken into account within the target figures.

We have had grid outages at both Crewkerne and Portworthy. This is where the network operator shuts down the solar system to allow them to do work on the local grid. At Crewkerne this was for around 2.5 days during the winter months and so didn’t have a material impact. At Portworthy the impact was a bit greater and amounted to nearly 6 days during spring, summer and autumn months. Since December 2015 this has resulted in just under 2% loss in output.

We would expect there to be continuing grid outages but we do not think they will be a major risk to future output.

Solar Irradiance

All project assessments, including the modelling of future generation and income, are based on assessments of solar irradiance which is calculated using PVGIS, a European Commission database. At our larger sites solar irradiance is remotely monitored on a constant basis.

Where data is available, there is a close correlation between lower than average solar irradiance and lower than forecast generation. This demonstrates that irradiation is the dominant factor, rather than technical or operational factors.

However a key question is, do we expect these low levels of sunshine to continue?

Whilst there are no widely available long-term records of solar irradiance for our specific sites, we have been reviewing our performance against publicly available data on sunshine levels, measured in sun hours[1], to get a sense of how abnormal our experience might be.

The data in Fig. 3 below, compares variation in sunshine levels against the 8 year average in Bath and at the Portworthy and Crewkerne sites. This is modelled data, that comes from www.worldweatheronline.com, allowing the comparison of recent sunshine levels with longer term averages to be made.

 

Because the publicly available data is modelled rather than actual observed data we also wanted to check how accurate the modelled data might be compared to the real world. So the graph also provides data recorded at the Meterological Office Station at Yeovilton, which is in the same area as the Crewkerne site.

The actual observed data at Yeovilton shows a strong correlation with the modelled data we are using at Crewkerne. The strong correlation between the observed and modelled data here increases our confidence in the modelled data for our other sites as well.

The long-term data from Yeovilton, illustrated in Fig. 4 below, emphasises the unusual nature of the last couple of years. The data suggests that the last time sunshine levels were as low as this was in the early ‘90s. The long term average from actual observations at Yeovilton, is within a couple of percent of the 8 year average shown in Fig. 2.

The overall trends in the modelled data summarised in Fig. 3 shows a good correlation with our project generation performance over a longer period outlined in Fig. 1.

Overall, this means that the last two years have delivered significantly below average levels of sunshine at all three locations, suggesting that in the long term we should see better performance.

 

[1] Sunshine hours are defined by the met office as the amount of time that direct solar radiation exceeds 120 w/m2. This is not as accurate as measuring actual solar irradiance, which is what we do at our larger sites. Sunshine hours do not take into account indirect solar radiation, of which we get a lot. However, it has not been possible to source historical irradiance data for comparison.

 

Are we doing enough locally to develop renewable electricity?

It’s helpful to take stock every now and then and consider whether we are doing all we can in whatever our chosen walk of life. So as we develope BWCE’s plans for the next few years, it seemed like a good idea to consider what has been achieved locally on renewables and what can we do better?

An analysis of the Ofgem database on installed capacity (with a little help from Joel at Regen) tells us that by 2010 we had around 150kW of renewable electricity in Bath & North East Somerset (B&NES) and by 2016 this had grown to over 22MW. More detailed analysis is underway for the areas just over the border in nearby Bradford on Avon and Corsham. But as data is most easily extracted for whole local authority areas, this analysis is just for B&NES at this stage.

The massive drops in 2013 and 2016 show the impact of the significant cuts in the Feed in Tariff by central government. 2015 however was boosted by the installation of two large community owned solar arrays by BWCE and Chelwood Community Energy.

So, in 2010 we had enough renewable electricity generation to provide the equivalent annual electricity demand of around 30 homes. By 2016 that had grown to around 5,300 homes, or 7% of the homes in B&NES. This is no mean feat, particularly considering that around a third of this capacity is community owned – thanks to the efforts of BWCE and our friends at Chelwood Community Energy. With Keynsham Community Energy also up and running and looking for its first sites we know for certain there is a lot of enthusiasm for local action on renewables.

In the last 6 years we have seen community solar on school roofs, large scale solar arrays as well as a beautiful new modern waterwheel – all developed through a strong community model.

Over their project life, these community renewables alone will put millions of pounds back into the local economy and offer tangible examples of what can be done when we act together.

However should you ask the question, ‘is it enough?’ The answer would have to be a definite ‘no!”

If you compare renewable energy in B&NES with what’s been achieved across the UK in terms of onshore renewables, as a proportion of electricity demand, we are only at a third of where we should be. Whilst we have ‘over delivered’ in terms of solar PV. We have not even got onto the scoreboard with wind. The fact is over 99% of capacity in B&NES is solar. There has been barely any new wind generation installed since 2010.

It is vital now, if we want to meet our targets, that we move the dial on wind energy. It’s not as if we don’t have the sites. The renewable energy resource assessment B&NES council carried out in 2010 showed that we have significant potential for medium scale wind energy projects.

We know that central government has made the situation a lot more difficult with tighter planning constraints and cuts in subsidies, yet as BWCE we are still looking for new sites that could garner local support.

Technology costs are falling and we are not that far away from being able to develop subsidy free projects. So we also believe there is still potential for more solar PV, other technologies like anaerobic digestion and heat pumps, as well as exciting new opportunities for innovative technology and energy supply arrangements including storage and peer to peer trading.

We at BWCE we will be continuing our policy of member consultation with a meeting on 22 April at the  Old Mill Hotel – the site of our new, modern waterwheel. At the meeting we will put forward our proposals for the next few years and get members feedback so that together we can continue to make an impact within the rapidly changing local energy market. If you are a member or bondholder and are interested, you are more than welcome to come along. The meeting will start at 2pm and end at 5pm.

You are also welcome to stay on to 6.00pm when we, with some fine guests, will be raising a toast to the waterwheel.

I hope to see you there, but to help us with the  catering, please let us know if you plan to attend by emailing Peter Andrews from our contact page.

Pete Capener
Bath & West Community Energy

Beyond Solar PV

Beyond solar PV

When we started Bath & West Community Energy (BWCE) it was in our minds to develop a model that embraced the supply of electricity as well as energy efficiency and community renewables. We wanted to make sure more of the profits from the business of delivering energy remained in and benefited local communities.

So at our recent public meeting, we were really excited to be announcing our plans to launch a local energy supply offer in partnership with Mongoose Energy. Mongoose Energy is the majority community owned energy company that we set up last April.

This opportunity comes at a crucial time for the community energy sector. No sooner had we proved the core business model and delivery strategy, that was driving the expansion of community renewables projects, worked and worked well, than the government decided to significantly move the goalposts. It could be argued that we need to move to an environment without subsidies and renewable energy is not far from that point. However it seems reasonable to expect a consistent approach on this point across all energy technologies, including fossil fuels and nuclear power.

It has become obvious that we need to be creative to ensure that the community energy sector can continue to grow and flourish. And, we took the opportunity at our meeting to outline where we are now as BWCE, the challenges we face and how we need to adapt our model to increase the viability of local projects, including embracing storage and supply.

To see our slides on BWCE and how we are looking to develop our business model please see here. Members should contact me if they would like a copy of Mongoose Energy’s slides.

The potential for community energy to have an impact beyond just the generation of electricity, was hinted at by our member survey from last year, when over 50% of members said that they had done some or a lot to reduce their own carbon emissions as a result of being a member of BWCE (see slide 5 in presentation).

So as BWCE we feel we need to reach out to a wider audience and start to involve people who might not have previously thought that community energy had any relevance to them. This is where the energy supply offer fits in. It will enable us to enter into discussions with a far wider group of people about energy, whilst also making sure that a greater proportion of our energy bills are retained locally, to benefit local people and local communities.

After the presentation, at the packed meeting, we had a great discussion with those present. There were lots of excellent questions around governance, reputational risks for BWCE, branding, balancing supply and demand and the related issue of whether our focus should be exclusively on renewable energy or should include high efficiency gas fired combined heat and power projects, how we incentivise local groups and support our members to help us promote our offer, how we can begin to integrate energy efficiency and demand reduction, the role of new technology like smart meters and energy storage.

We will try to integrate as many of the points raised as possible into into the development of our next business plan which will take us through to 2020. There will be a major session on this topic at our AGM, which incidentally will be in September this year. At the AGM we will present our thinking on this and other issues including a number of key options where we will look to our members to influence the direction we take.

Overall people at the meeting were enthusiastic in their support for taking this particular opportunity around energy supply forward. So energy supply will definitely form a key plank of our next business plan.

Keep visiting our website and reading our newsletter where we will announce our launch date later this year. In the meantime click here to express your interest in signing up to become one of the first customers of the UK’s first majority community owned energy supply business.

As ever you are welcome to contact me on [email protected] if you have any questions or queries about BWCE or any of our plans.

Pete Capener
Chair, Bath & West Community Energy

 

Consultation Response – Changes to Feed in Tariff Accreditation

Bath & West Community Energy – Consultation Response  – Changes to Feed in Tariff Accreditation

Introduction

Bath & West Community Energy (BWCE) is a Community Benefit Society set up in 2010. BWCE has raised over £10 million through community share offers, plus debt, to finance the construction of just under 6 MW of community owned solar PV for BWCE and its community energy partners. Last year BWCE distributed £20,000 of its surplus income, via its independent community fund, back into local community projects. This year BWCE will be distributing a further £45,000 via the same route and will be retaining 60% of project income within the local economy. To date BWCE has paid 7% interest to its members, the majority of whom live in the local area.

The community energy sector is laying the foundation for local community acceptance and so the continued successful roll out of distributed renewable energy, by increasing local governance and control, recycling profits back into local communities and retaining economic value within the local economy. So the community energy sector is crucial to the UK’s response to climate change, particularly as current projections suggest that more needs to be done to meet the UK’s fourth carbon budget to deliver a 50% reduction in carbon emissions by 2025.

BWCE is deeply concerned about the potential removal of the ability to pre-accredit community energy projects. The enthusiasm, commitment and momentum that have been generated by community energy projects could be stilled at a stroke with the removal of pre-accreditation.

Community energy projects have longer development periods than comparable commercial schemes, bringing as they do the need to build support for projects locally and to raise finance. This was recognised by government very recently with the increase in pre-accreditation periods for community energy projects.

In addition, if there is no pre-accreditation then the likelihood is that commercial schemes, with their ability to move to commissioning more quickly than community energy schemes, will trigger degression rates more rapidly, increasing further the inherent risk associated with investing in community energy.

If finance is to be raised without security around income levels, then the level of risk will again be greatly increased, reducing numbers of potential investors, driving up the minimum level of interest required to secure investment and so removing or greatly reducing the community benefit that projects will be able to generate. This is something that the FCA is already greatly concerned about, as evidenced by their recent consultations.

This increased risk and uncertainty is acknowledged within para 1.19 of this consultation. However, no mitigating factors or suggestions are made as to how community energy projects in particular can accommodate this massive change in the regulatory framework. Community energy projects will be going from an expectation of a 12 month period to reach financial close and commission, for solar PV for example, to nothing, in very short order.

The removal of pre-accreditation and pre-registration as described in para 1.11 of the consultation document will devastate the community energy sector and we urge government to re-consider their plans.

QUESTION 1: Do you agree that, in the context of deployment and spend under the FIT scheme significantly exceeding expectations, it is appropriate to remove the ability to pre- accredit from the FIT scheme?

No we do not agree that it is appropriate to remove the ability to pre-accredit.

The most effective mechanism for controlling spend is degression. Pre-accreditation adds to the levels of deployment and if projects do not come to fruition then degression could be triggered prematurely, but will nevertheless increase degression rates. This will reduce spend and so deliver the cost control required by DECC.

QUESTION 2: Are the assumptions made above on the impact of removing pre-accreditation reasonable? Please provide robust evidence to support your response.

Whilst BWCE would agree with the impacts outlined in terms of increased risk and uncertainty (paras 1.16-1.19), the consultation states that due to the uncertainty in the impact of changes, there has been no attempt to quantify potential savings or impacts on deployment.

The admission that DECC is proposing changes that have substantial, known and acknowledged negative impacts with no attempt to quantify whether the changes would actually make any savings at all is at the very least questionable.

The impact on the Community Energy sector would be particularly severe. A typical fund raising cycle for a community project takes at least 6 months from start to finish. For example, BWCE supported the fund raise for the 5 MW community project at Braydon Manor that is owned by Wiltshire Wildlife Community Energy. The fund raise was prepared in September 2015, launched in October and closed in January 2015. It then took a further 6 months to agree bank debt and contract terms before financial close could take place.    Removal of pre accreditation would have made it impossible for this project to reach financial close because there would be great uncertainty on the FIT level.

This is really damaging to a sector that offers an alternative vision to the incumbent power companies and which DECC has clearly stated previously it wishes to support.

BWCE would strongly recommend that before DECC enacts such major changes to the FIT it carries out a full impact assessment to provide evidence that the changes proposed will deliver the savings required.

QUESTION 3: Are there additional measures which could achieve the objectives of encouraging deployment under the scheme while ensuring value for money under the LCF?

Whilst BWCE does not believe that the LCF is an appropriate control mechanism for delivering the necessary UK response to climate change, it would be better to give the sector clear policy direction in terms of priorities. Rather than enacting change that will undermine the whole sector, government has the ability to bring forward the technologies and scales of project that it wants to see through the setting of FIT levels and or/differential degression rates.

Otherwise there is the high chance that changes will be implemented that will not deliver the desired cost savings and will fundamentally undermine the renewable energy sector at a time when there is the real prospect of renewable energy delivering grid parity for some technologies, within the near future.

Ultimately, subsidy free renewable energy is the most effective way of delivering value for money. The removal of pre-accreditation will make grid parity less likely and so will have a negative impact on value for money.

DECC should also consider the potential for making savings in other areas, for example subsidies for conventional and nuclear energy production, which would have a less devastating impact given the far higher levels of funding involved.

QUESTION 4: Are there groups or sectors where it may be appropriate to reintroduce pre-accreditation in the future?

For the reasons outlined within the introduction and in our response to Q2, community energy projects are even more vulnerable to the removal of pre-accreditation than commercial projects. So whilst BWCE believes that pre-accreditation should be retained for all projects, there is a very strong case based on policy precedent (extended pre-accreditation periods for community energy) for special dispensation for community energy projects.

Community Initiative Award

BWCE wins RegenSW Green Energy Award

Dinners at Regen SW Green Energy Awards are always grand affairs, held for many years in the Assembly Rooms in Bath. Packed to the molded Georgian ceilings with the great and good from the renewable energy world. This year’s dinner was no exception and was made that much tastier by the fact that we won an award, for Best Community Initiative in the South West.

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