Old Mill 3

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Update 1 September

Things move on apace at Old Mill Hotel. Work has started at the Hydrowatt factory in Germany on the fabrication of the waterwheel. See the pictures above and below. Fingers crossed the circumference of the shutters shown in the Old Mill 2 Blog will be a few centimetres larger than circumference of the actual waterwheel. It is important that the new wheel fits snugly into its housing so that as much energy as possible from the water flowing underneath it is used to turn the wheel to generate electricity.

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 At the same time back at Batheaston the workers have not been idle. The shuttering for the housing for the  generator has  being erected in the concrete poured

Waterwheel generator housingSteelwork for generator housing

Old Mill 2

Shuttering

Shuttering for water channel

The reason this is such an exciting picture for us at BWCE is that is it means the construction of our waterwheel is moving on apace. This is a picture of the shuttering that went into the bottom of the channel the water will course through to turn our water wheel. Shuttering, for those of you who don’t know, is the wooden structure that is used as a temporary former to contain setting concrete. In this case the shuttering went into the bottom of the channel, the concrete was poured and when it has set hard the shuttering will be taken out and we should have a nice curved channel that will exactly fit the diameter of the water wheel.

Water channel under construction
Water channel with workers

 

Workers constructing the channel

 

 

 

Water channel nearly ready for shuttering

 

 

 

Meanwhile in Germany at the Hydrowatt factory the wheel is being built – photo’s to follow.

Old Mill Hotel

Result – At last
Work has started on installing the waterwheel at the Old Mill Hotel. This is especially satisfying news as it was our first ever project, started over 5 years ago and makes a change from lovely and efficient, carbon reducing, but not very photogenic, solar panels. I distinctly remember our first meeting, in 2010, at the hotel, with John Lancaster (now the project manager) and Mr Meshreky the owner, and thinking this shouldn’t take too long!!.

For those of you who can’t remember the project we will be replacing the current decorative waterwheel with one capable of delivering approximately 87,000 kWh per year.  The wheel is currently being built by Hydrowatt in Germany. As the project progresses we will be posting pictures to our website but in the meantime here’s what it looked like on 19 May 2016

WANTED PHOTOGRAPHS
If you are passing across the Toll Bridge in Bathampton or visiting the Old Mill Hotel please stop and take a picture of the site and send it to me for publication on our website. Huge prizes for the best picture.

On the left, as the site was before work started showing the old decorative wheel. On the right, step 1, take the old wheel away!

Old mill now copyOld Mill Waterwheel May 2016

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

 

Energy Supply Meeting

Energy Supply Member Meeting on 15th March

Over the last 6 months we, at BWCE, have been evaluating the options open to us for developing a local energy supply offer. We want to be able to give our members and others the opportunity to buy the clean electricity generated by our own installations and those of other local community benefit societies. We will be outlining our proposals at a public meeting for members and ‘not yet’ members – where we will be seeking your views (and asking members to vote) on key aspects of our plans. This is an important development for BWCE as we adapt our business plan for a world beyond subsidies. So please come along and make your voice heard. Our member meeting will be on:

Tuesday 15 March starting at 6.30 pm promptly and finishing at about 8.00 pm at

BRSLI, 16 Queen Square, Bath, BA1 2HN

Not yet BWCE members and the plain curious are very welcome but will not be able to vote on any proposals

What next for BWCE in 2016

Jeff Kenna and the BWCE directors look ahead to 2016

The community energy sector was hit by many negative changes in government policy last year – imposition of the climate change levy on renewable energy, slashing of feed in tariffs, loss of EIS status, planning restrictions for onshore wind. On top of this, oil prices have fallen considerably, leading to an uncertain view of future electricity prices which seriously impacts on the viability of future projects. The government’s energy policy appears to be driven more by the Treasury than by the Department for Energy and Climate Change and nuclear energy and gas are seen as our future energy sources. Ironically new nuclear needs greater subsidies than renewable energy to make it viable and will lead to higher energy bills – the very reason that DECC has said that it needs to cut the feed in tariffs. To rely on gas for our future energy security is giving a hostage to uncertainty and short termism. Prices may be low now but who is going to invest in gas generation without government guarantees on future prices? In addition reliance on gas and nuclear undermine the UK’s resilience and fuel security, based as it is on foreign investment and imports. Unless that is we believe that UK based fracking will eventually produce significant quantities of cheap, useable gas.

The year ended with the Paris Climate Change Agreement and that has signified a global commitment to a low carbon society. There are still major hurdles to overcome. Not least is the agreement of all countries to specific carbon reduction plans that when added together will come anywhere close to minimising global temperature increase to the 1.5 – 2 degrees agreed in Paris. However the headline intention to limit temperature rise to this level makes a substantial statement and those countries that embrace it will be stronger for it. China is the major producer of solar photovoltaic modules and is the largest investor in renewable energy. Germany is on track to become the world’s first renewable energy economy and over one third of renewable energy capacity is community owned. Contrast this long term view from two of our major competitors with the short termism of the UK government. What makes their position even less comprehensible is the that the UK has the best overall renewable energy resources in Europe. Sadly, our political leaders appear to have learnt little from the 2008 financial crisis where short term thinking and wrong measures have led to years of austerity.

So where does that leave community energy in the UK in 2016? Quite simply – we just have to get on with it. We cannot expect any support from Government. Fortunately energy is a fundamental need and providing energy is a profitable business activity. Importantly for us and our members, community energy offers a fundamentally different way of doing business:

  • Through ownership. By encouraging investment in local projects we offer members a tangible stake, with fair returns, in a collective move towards a low carbon society.
  • Social impact. By sharing surplus returns with the local community we can achieve a social impact that goes beyond any conventional business.
  • Resilience. By increasing the take up of community controlled renewable energy, we can take a longer term view. This gives a resilience to our energy supplies that will be unaffected by the vagaries of fossil fuel prices or geopolitical fractures. We believe prices will fluctuate widely in the short term but can only increase in real terms in the long run.
  • Engagement. By creating a stronger link between ordinary energy consumers and local projects we can raise awareness of energy issues, support greater action on carbon reduction and encourage local communities to add their voices to the pressure for change. By changing behaviour and creating a bottom up movement  we will be able to influence policy makers – an essential action in the move to a vibrant low carbon society.

BWCE currently has 7 MW of operating projects at a total cost of £9.5m. There are further projects under construction. We plan to continue to build our generating portfolio and will continue to seek out opportunities that meet our investment criteria. As our track record develops we hope to provide liquidity  to our members – that is the ability to easily ‘cash in’ or transfer their investment – which in turn will improve our ability to raise funds. We will consider other low carbon technologies such as combined heat and power (important for our supply ambitions) and look at the acquisition of existing operating assets. New viable renewable energy projects will be more difficult to find in the short term, but technology prices continue to drop and we are confident we can add new projects to our portfolio in future years.

Our main focus in 2016 will be to work with partners to launch a local energy supply offer for our local communities. We are talking to potential partners including Mongoose Energy and will be running a member meeting in February to discuss our plans. Developing a local supply offer can increase our value chain and by selling electricity directly to local customers we can hedge the price that we receive for generating electricity. It will also create new opportunities on energy efficiency and engagement.

We believe 2016 will be another exciting year for BWCE. Community energy has a valuable, and increasingly important, place in the UK’s energy  landscape. We should look to the long term and not be disheartened by short term government policy.

Government Consultation on the Feed in Tariff & early notification of BWCE share offer

What chance for new community energy projects in the future?

As you may know the government has launched a consultation on the Feed in Tariff, the main mechanism for supporting small to medium scale renewable energy projects in the UK. The proposal is that from January next year, there will be a major cut of up to 87% in the tariff. As you can imagine, this will have a devastating affect on the industry and in particular on our community energy sector.
It is important to note it will not affect our existing projects or those that have already been registered, but it will drastically affect the potential to realise new projects.

The consultation on the proposals can be found here and closes at 11.45pm on the 23rd October. A good summary has been put together by Regen SW and can be found here.

We know the government is getting a lot of responses from the community energy sector and we will be adding BWCE’s voice to this. We hope that you will add yours too. 

In summary, BWCE will be saying that:
1. Community energy is capable of delivering a wide range of additional benefits beyond renewable energy capacity, not least the re-investment of profits back into local communities ensuring that local communities benefit significantly.
2. Even though community energy is rapidly growing, it is particularly vulnerable to such heavy cuts as it has less access to commercial and institutional finance than its commercial counterparts.
3. Within the next few years as the community energy sector matures, communities may posssibly be able to compensate for the loss of the Feed in Tariff through the development of creative financial instruments, perhaps via the Green Investment Bank, or through local supply offers that enable them to secure greater value for their generating assets. But in the meantime they still need support of the FiT.
4. Some renewable energy technologies like solar PV could well reach grid parity within the next 3-4 years, the point at which time renewable energy will no longer need subsidy to compete with conventional energy generation. However the drastic cuts to the Feed in Tariff are too much, too quickly. The harm they are likely to do to the sector will set back the move to grid parity, rather than bring it closer.
5  In the short term, without the Feed in Tariff, it is probable that the community energy sector will wither before it is ready to stand on its own – without subsidy.

In addition we will also press hard for the re-instatement of pre-accreditation which was removed on 1 October. This is the process by which projects can secure their Feed in Tariff level at the point they have planning and a grid connection offer, rather when they commission. Without pre-accreditation it is impossible to model financially whether a project is viable or not. In consequence little can get built with any degree of comfort for potential investors.

What can you do?
You can add your voice to the tens of thousands of others who are responding to this threat to our industry by:
1. Getting involved in the online campaign run by 10:10. Their ‘Keep Fits’ campaign can be found here. Responding to their simple questions provides an easy way of making your voice heard within the context of the consultation.
2. Signing the online petition started by 38 degrees here.
3. Most importantly get in touch with your MP. Ask them whether they are concerned about the prospect of undermining the community energy sector in this way, if you are already a member of a community energy organisation, tell them why you think community energy is a good thing and what motivated you to get involved. Ask your MP to write to the Secretary of State, Amber Rudd, to voice their concern about the impact on community energy and their communities.

A number of MPs, including some Conservatives have voiced their concerns, it is important to encourage more to speak out. We have lobbied our local MPs as have many others in the South West and across the country.

So while stocks last…. 
In the first half of November we will be launching our last share offer to fund projects that have already secured the current Feed in Tariff and so are not vulnerable to the proposed cuts. So, keep looking out for your BWCE newsletter for more news and email us on [email protected] if you are interested in investing. Please forward this newsletter to friends, colleagues and neighbours so they can get involved – while they still can!

Regards

Pete Capener
Chair
Bath & West Community Energy
E: [email protected]
T: 07775781331

Interest payments and EIS certificates

9 October 2015

Interest Payments
An interest payment of 7% per annum was declared at the last AGM for the fourth year in succession. Members should have received by now an email confirming the amount of interest they will receive for their shareholdings up until 31 March 2015. There will have been an email that pertains to each one of their shareholdings. So for example if you hold three share certificates you will have received three emails. If for any reason you haven’t received the emails please contact Peter Andrews as soon as is convenient. The actual payments will be made, by bank transfer, over the next few days. Please note investors in the Wilmington Solar Array will be receiving interest pro rata, dated from the date on their share certificates.

 Enterprise Investment Scheme ( EIS) 3 certificates
The blank EIS 3 certificates have now been received and will be filled in (by hand unfortunately) and sent out to you as soon as possible. For those of you who don’t know how to claim your tax rebate our financial director David Bunker has written these instructions.

How to Claim EIS Relief

HMRC have now authorised the tax submissions made by BWCE so now we can distribute to all qualifying investors a Form EIS 3 which sets out the amount invested and states that the investment is eligible for tax relief.

For Investors who Normally Complete a Tax Return Form

You need to claim the relief on your Tax Return form by completing the Additional Information Section. In Box No 2 on Page 2 you need to enter the total value of the investment upon which you are claiming relief. In the large box on Page 4 of the Additional Information Section you need to provide details of the name of the company invested in , the amount invested, the date of issue of the shares and the name and reference number of the HMRC office issuing the tax certificate. All this information can be found on the EIS certificate we will issue.

You do not need to complete pages 3 and 4 of the EIS certificate. You do not need to send the EIS Certificate to HMRC but you do need to retain it in a safe place. HMRC may request to see the certificate as evidence in support of your claim.

The tax relief will normally be allowed in the year in which the shares were issued to you. If you wish to claim relief against the previous tax year you can either amend the Tax Return previously submitted for the earlier year, or fill out Page 3and 4 as detailed below and send it to your HMRC office.

For Investors who do not Normally Complete a Tax Return Form

If you are employed under PAYE or retired and do not normally complete a Tax Return form, the procedure for claiming relief against tax deducted from you is slightly different. You need to complete the blank sections on Pages 3 and 4 of the EIS Certificate. The details you need about the date of issue and the HMRC office reference number can be found on Page 1 of the certificate.

Detach Pages 3 and 4 of the EIS certificate and send it to the HMRC office that deals with your tax deductions. If you are employed or have a pension from a former employer you will be able to find details of the HMRC office dealing with your affairs from your employer. If you cannot find this information you will need to telephone HMRC on 0300 2003300.

The tax relief will normally be allowed the year in which the shares were issued to you. There is a space on Page 3 of the form to specify if you wish to claim the relief against the preceding tax year.

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.

Chelwood Solar Array

Join us on Tuesday, 18 August at BRSLI, Queen Square, Bath, BA2 3AF

One of the projects we were working on when we handed over our development work was the solar array at Chelwood – to the southwest of Bath. This ambitious scheme for a 5MW array has bought together BWCE, Triodos Bank and Mongoose Energy in the setting up of Chelwood Community Energy.

The project is currently in the middle of a fund raise of £2.75 million to complete and build the installation. Underwriting has been secured for £600K meaning a minimum raise of £2.15m. As of yesterday £1.542m had been raised – well over 70% of the minimum total required.

BWCE will host an evening where you can hear a presentation about the project from the directors and ask any questions you may have. The meeting will be next Tuesday, 18 August at BRSLI, Queen Square, Bath, BA2 3AF. It will start at 6.30 and finish about 7.30pm.

All the details of the offer including the Share Offer Document can be found on the Chelwood.org website. You can also go direct to the Ethex website where you apply directly online.

All BWCE members and non-members are very welcome