Agenda for Scrutiny Panel on Renewable Energy Potential on Monday, 7th February, 2011, 10.00am
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PDF 2 MBVenue: Friends Meeting House
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Minutes: No declarations.
No party whip.
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Minutes of the previous meeting Minutes: The minutes of the previous meeting were approved.
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Chairman's Communications Minutes: Due to pressure of time, the Chairman just wanted to welcome everyone to the 3rd meeting of the Panel. They were looking forward to learning valuable lessons from those who had sought to develop renewable energy in the city.
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Witnesses
The Panel will hear from:
Peter Davies, Development Director, Shoreham Port
Phil Webber, Head of Environment Unit, Kirklees Council (using Skype)
Howard Johns, Managing Director, Southern Solar Ltd
Ross Gilbert, Director of Quoin Estates and Developments
Daren Howarth, Consultant
Helmut Lasser & John Kapp, Chair and Member of Hove Civic Society
Minutes: Peter Davies (PD) introduced himself as the Development Director, Shoreham Port Authority. He told the Panel that the Port had a 250 year history, including that of power generation – including an early power station in the 1800s. The current power station had been built 10 years ago by Scottish Power. Shoreham was a Trust Port set up by Parliament and the Port Authority was run by a Board, which meant that no profits could be made and any surplus had to be put back into the Port. It was a relatively small regional port, which dealt with cargos for mainly customers in Sussex, Hampshire and Surrey. It dealt with about 2m tonnes per annum and covered a large area 3.5 miles long.
The Port had adopted a Masterplan which can be found at http://www.shoreham-port.co.uk/Masterplan and Renewable Energy (RE) was part of that plan. It was anticipated that there would be a 25% growth in throughput in the next 15/20 years, which would boost the local economy and jobs market. They hoped to take advantage of the planned offshore wind farm (Rampion) and the Port was committed to going green. Examples included:
The Port Authority only owned 70% of the Port and so needed to work with private organisations on these greening proposals.
Ports were a sustainable means of transporting local products – for example, shipping grain to Scotland to make porridge oats. However the Port did take in timber from Scandinavia. They were in the process of learning about RE and were keen to be involved in projects in this sector. They were used to handling major projects e.g. waste water pipe at Peacehaven.
One big opportunity was the 450,000 sq ft of warehousing which could e.g. be fitted with solar panels. There were also significant chances for private investment in both new buildings and retrofitting. They were building a steel processing plant for £10m and renewable energy would be a key part of this project (http://www.shoreham-port.co.uk/Latest-News/CONSTRUCTION-OF-STEEL-PROCESSING-PLANT-GETS-UNDERWAY-AT-THE-PORT). They had won a contract with Eddie Stobart to transport biomass to Germany and Sweden for up to 10 years. If biomass plants were to be built in the UK, then the Port could both import and export biomass.
Edgeley Green Power wanted to come to Shoreham, in order to transport the oil it would need to fuel their planned biofuel power plant. It was hoped that the generation of power would happen by the end of next year.
There were real opportunities for solar panels because there was so much roof space. This could be to the value of £6m in the first phase of the development. The Port Authority could not afford to make this investment and was looking for a partner to finance the investment. They were examining the possibility of doing this through a community interest company rather than a purely commercial arrangement.
The Authority also believed that the site could provide opportunities for wind turbines, as it was a really good location. A planning application had been refused in the mid-90s and so they were fearful of getting their fingers burnt again. Due to the proximity of people living near the site, the turbines would need to be medium sized.
If one wanted to compare the work of this port, compared to e.g. Blyth and Lowestoft, it was important to remember that no two ports are the same. Blyth and Lowestoft had the advantage of being in an earlier round of development, whereas Shoreham is part of Round 3. While Blyth and Lowestoft was large enough to get involved in construction, there were not the same opportunities at Shoreham, although they could run demo projects.
PortZED (http://www.zedfactory.com/portzed.html) was primarily a housing led project. Bill Dunster, was the principal architect, and the project involved zero carbon housing, office and retail space. They had already potentially gained funding (previously known as Eco Town funding) which would provide around £3m for regeneration and still leave money for Port ZED, if they gained planning permission – which was going ahead at the moment.
This project would present real opportunities for the Port and developments next to it and could result in 2,000 homes and 4,000 new jobs in the area. This was significantly less than had been expected 3 years ago, but the opportunities it would bring included district heating (DH) – although the stock would be quite spread out. For example the Edgeley Power Station could be used in some way to heat businesses. At present the sea is being heated up by the power produced in Shoreham, which could be employed for good. However, one would need a sophisticated system to link it up and provide constant heat – the Authority would need a 3rd Party to come in and do this.
In summary, it was an exciting time at the beginning of a process and the Authority was confident that it could make a difference to the area.
Questions to Peter Davies
Q: What model do you think should be established to deliver RE energy projects in the port?
PD: Solar Panels could be installed as a community project. The Authority could provide the roof spaces and it could be the role of a council to pull the right people together to make this project happen. It is not the core business of the Authority and it takes time to win people over. Brighton & Hove City Council (BHCC) could take on the role of ‘selling’ different kinds of technology, such as wind turbines, to the community. If the community had a stake in such a project, it was more likely to be a wonderful project. However, due to the funding opportunities, this needed to happen in the next few months.
Q: Have you undertaken any particular testing e.g. to see how PV panels would work on a sea fronting site?
PD: Seagulls are an obvious problem in this location.
Howard Johns (HJ): The key factor is which material is used in construction. The location may affect the design of the system, but is not an insurmountable problem. Solar PV has been put on Shoreham Beach.
Q: Would it be possible to temporarily place PV panels on land which is not currently being used?
PD: When putting solar panels on roofs, one can incur increased costs if need to strengthen the roof. However there is very little land in the port area that could be let out on such contracts. However there are some small areas of land which are no good to us, or land a long the top of the beaches which could be used to put up turbines. The possibility of putting panels on poles had been looked at, however there was concern about possible vandalism.
HJ: If one puts panels on roofs there is not much extra cost. But if one was to erect panels temporarily one would lose the opportunity to earn a 25 year income. One would not want to erect panels in a place where the possible vandals could reach them.
Q: There appear to be a lot of opportunities for RE, but realise it is away from the core business of the Port. What kind of organisation do you think would be most useful for delivering RE e.g. community energy?
PD: The Authority has an open mind. Some purely private organisations have made attractive offers, however as they were a community port – they could be interested in a community based group.
Q: It had been suggested by other witnesses that the Port Authority could speak to the Brighton Energy Co-op and OUVESCo.
Q: Is there sufficient demand in a 50 mile radius to sustain the Port, or will you have to extend the area you serve?
PD: As part of the Master Plan process, they were able to identify a long list of business opportunities. These could come from organisations who currently use other ports which are further away e.g. Hull. The Port is popular because it has invested in its infrastructure. Because it is a Trust Port, it considers what is best for the area and not always on strictly commercial lines.
Thurstan Crockett (TC): To place this in a planning context, Shoreham Port was identified in the Core Strategy as a large opportunity for RE. There is a history of redevelopment in the areas. The previous vision for the port relied on a £200m+ link road, which was not fundable.
Q: One can see how important the Port is – how can BHCC enable your work?
PD: We are not sure how, but we do need the assistance and need to get on with it quickly. Help could include guidance, putting together the different interest groups and helping it to be seen as a community project. Other assistance could include:
Q: Are you getting the same level of co-operation from the other local authorities – West Sussex and Adur?
PD: They had all been working together to concentrate on getting the planning right, but had not yet been able to get on with the projects on the ground. So now wanted to get on with it and make it happen. For this they needed the help of the councils, both in hand holding and offering practical guidance e.g. who are good suppliers/installers and technicians?
Dr Phil Webber (PW) introduced himself (using Skype) as the Head of the Environment Unit at Kirklees Council. He felt that RE had not been the priority for his Council. Instead their priorities had been to improve housing conditions, including insulation, and reduce C02. Their biggest programme had been Warmzone, which had undertaken 65,000 free home insulation measures. This had included a programme to improve boilers and a boiler scrappage scheme. After undertaking these energy efficiency works, the Council saw their role as helping to increase the % of RE in the UK.
They had managed to obtain a small grant from the Department for Energy and Climate Change (DECC) to install 50 Solar PV systems on terraced properties. The Council were really using Solar PV as a way into this area. They would be using the Feed in Tariff (FIT) income to establish and maintain a Community Fund. This work was also seen as a lever into getting the community e.g. to increase their level of recycling. The Council was also providing energy advice, as sometimes low income households had extremely high energy bills.
Kirklees was looking at the ways of exploiting FIT. They were planning to put in £6m to install solar on 5,000 local authority homes and then the income from FIT would pay back the costs over 10 years. It was also possible to fund such projects if you were able to access loans at a reasonable rate. For example, Public Boards were able to offer loans at a reasonable level but they still had to deal with the issue of maintenance costs.
The Council had found there were big capacity issues due to insufficient certified installers. However, this was an opportunity to combat the recession. There were big opportunities for local authorities to insist on local suppliers, local workforce and training opportunities. If one spends £1 on insulation, one got a lot more CO2 savings than from RE – however RE brought good employment opportunities. This was why the Council needed to do insulation first, but there was the worry that improving the insulation of the home just resulted in a warmer home, rather than achieving CO2 savings. With RE, consumers could see the energy being generated, which may change their patterns of energy use. There was also a lack of capacity when it came to insulating homes. To deliver their programme required them to train and pull in crews from across the UK to deliver the volume they needed, due to the high take up rate. For this kind of volume needed 10,000s or 100,000s of installers.
When it came to partnerships, the key issue was working on existing housing stock. The Council had found that the District Network Operator (DNO) was on board, and had to take notice of the issues due to the legislation. In their experience the community was interested in RE if the price was right. The key task for the Council was to put together the business case, where all the participants gained some benefit e.g. the FIT income was going to a community fund and the home occupiers were receiving the energy. They had focussed on the poorest sectors of the community. A distinction had been made between those who could, and would, pay for renewable energy and those in poverty. To this end the Council was going to use £6m from the Housing Revenue Account (HRA) to fund further RE work. There were other funding models available, such as the companies who will install panels and then take the FIT income for a certain period.
The main advice that Kirklees would give to other Councils, was to prepare for the Green New Deal. This would include how to contact people and persuade them about the range of opportunities which could be out there for RE. People needed to be persuaded about the different technologies, which was more difficult if the technology was new or more disruptive to the community. One needed to sell the payback period of RE technologies. Reliable surveys of properties were also needed and getting good advice e.g. on which projects to pursue. It was taken as a given that everyone should insulate their homes, but when deciding on which RE technologies would suit people – this would depend on individual preference e.g. Solar PV or Thermal.
The Council had not had a positive experience with Biomass.
Questions to Phil Webber
Q: Why were you undertaking the solar panels project now and why were you using £6m from the HRA? If you are like BHCC, our housing stock is often in a poor condition and tenants may prefer to have a new kitchen.
PW: Kirklees is in exactly the same situation regarding the state of its housing stock, but solar panels will generate income and then the money could be used later to improve kitchens. The Council is also still in a situation where it can offer micro-loans and revolving loans towards improving kitchens and bathrooms. This is a big issue, because the funding for adaptations has gone.
Q: Do you think when trying to introduce such large programmes, should the council take a lead or use a 3rd party? Is it best to introduce blanket measures or target specific areas?
PW: The 65,000 insulation measures have meant that 65% of the housing stock now has cavity wall insulation. With Solar PV, the Council was targeting its own properties, hard to treat homes and people in fuel poverty. Where properties are owned by the Council, then it is right that they should take the lead in improving them. In relation to the private sector, it was the Council’s role to act as the independent checker of what is going on and getting a good price – because there are a number of companies offering bad prices and systems. Such companies gave RE a bad name, so quality installers were needed – and the local authority had a role in checking.
With the Green New Deal, councils would be needed in the role of ‘honest broker’. While 3rd parties could be quicker, local authorities had many of the needed skills in-house, e.g. their legal department.
Q: Having established that reducing CO2 was your policy driver and an outcome has been building a relationship with your community, what do you see as the next steps? How will the FITs be used to set up a community fund?
PW: The Community Fund income from FITs will be used to carry out general improvements in an area. These would need to be the collective decision of the local authority, the community and any 3rd parties. One of the areas of improvement that are most sought after are play area improvements. The process has to be fair, otherwise it will be divisive. It will be a challenge to see how this project works out. They have put £500,000 into the project and the work is being done on a continuous bank of 60 terraced properties. It is anticipated that it will generate £20,000 p.a. income. The process needs to be open and sensible.
Kirklees Council has a reputation and has been seen to deliver projects which were free. The relationship with the community is very important. The Council had to operate in a commercial way e.g. using billboards, appearing on the radio to promote issues/schemes and put up information in libraries. They had done a lot of work to brand this issue and address indifference. They feel that this has had in impact on the way companies, such as British Gas, promote this issue.
Q: There are a lot of national programmes such as the Low Carbon Community Programme and the anticipated Green New Deal, which require a lot of dynamism to implement in the local area. How have you managed this in Kirklees, has it been the role of the Environment Unit and/or the political leadership?
PW: Recently the number of the staff in the Environment Team had been reduced from 20 to 15. There was also a lot of cross-departmental working e.g. Housing and community workers. They had brought together all the people who needed to be involved to make it work. There had been a high level of need for capacity and skills in the Environment Unit. For example, 6 people had been working on this full-time dealing with RE related issues such as the 150 responses they had received to a tendering exercise. One would need staff such as legal and procurement people. It was not a straight forward process e.g. setting up a Supply and Fit contract. Due to government funding, they worked closely with DECC, but this meant that many people visited them to see what the Council was doing. Kirklees were happy to offer advice to other local authorities.
Howard Johns (HJ) introduced himself as the Managing Director of Southern Solar, the Chairman of the Solar Trade Association and the founder of OUVESCo Ltd.
He told the Panel that today the Government had announced their intention to review FITs immediately http://www.decc.gov.uk/en/content/cms/news/pn11_010/pn11_010.aspx The Government were concerned that there was too much uptake of the scheme, which was a real kick in the teeth. This review would affect all projects over 50kW. This would be a complete nightmare for the solar industry. Southern Solar were currently working on the site of a 300kW project. The sector had only had FIT for 10 months, resulting in 15,000 installations. The reason given for the review, was to prevent the development of solar farms.
He had set up Southern Solar 9 years ago and the company had grown to the size where it needed 6 offices including in Lewes, London and South Wales. The company was installing solar on 15 homes per week and 300kW was the size of their largest project. They worked with a number of local authorities and installed both Solar thermal and PV. They used to offer a full range of technologies, such as wind turbines. However around 90% of homes are suitable for solar, compared to 1 in 1,000 for a wind turbine. They felt that small wind turbines were not worthwhile for them, unless it was in the middle of the countryside. These were the reasons why their focus was on Solar PV and thermal. The biggest installation they have worked on in Brighton & Hove (B&H) was at Portslade School.
The UK’s PV market represented 50MW this year, up from 10MW last year. However in Germany the sector is 8,000MW. The biggest market was China, also the largest consumer of PV. The UK was hemmed in by the politics of the issue. The sector was operating in a situation where 12 months ago it had not known what were the details of the FIT scheme, and now faced a review of the scheme 10 months later rather than in 24 months. This process had worked by stimulating the market by taking it out of taxation, which was also going to be done for the Renewable Heat Incentive (RHI), and the scheme then funded by a levy on bills. However as a result of the Spending Review, these schemes would be part of the taxation process and a budget would be set up for them. This would mean that as soon as too much money was being spent in this area, if the take up was too good, then the expenditure would need to be reduced. This review of FIT had been announced even though not as much RE had been done in the UK as expected.
It seemed that every local authority was saying it planned to invest £10m in this sector, and now a lot of projects will fail. Councillors should lobby their MP because PV creates jobs. It was projected that it would create 17,000 jobs this year. The number of companies working with PV has grown from 500 to 1,200 in a year. This had raised issues of quality and ethics. But the right stimulus is needed, or this number of companies could fall.
He had first tried to set up a community energy company in B&H, but then went on to found OUVESCo which was about to go public with its share issue. But the % of its projects were over100kW, so their future could be affected by this review of FITs.
Q: Is this review of FITs just a sensible reaction to fears over solar farms?
HJ: There has been campaigning and pressure put on politicians about this issue. He had worked with the Council, including Sustainability and Architects, on RE issues. In his experience there had been a lot of planning in the city, but not masses of action. He was surprised by how little uptake there had been of this technology in the town, compared to Woking (who had installed 10% of all PV to date) and Kirklees. He attributed this to the visionary leadership of these councils. He believed that councillors in this city needed to get together and decide to do it, which was what Kirklees did in the early ‘90s.
The possibilities were huge including the Council’s housing stock and its property portfolio. Both of which could be used to generate solar heat and energy. The Council could lead schemes which would increase the credibility of the sector in the city. If they took measures on their stock, like Kirklees, this would be well received by the community and increase the amount of microgeneration in the city.
Renewable energy was caught up in the political process and there was still to be an announcement on the Green New Deal details – which were not likely to be known until the next year.
The use of Solar Thermal in a Scottish project had reduced households’ heating bills by 30%. Such projects were pretty maintenance free and offered huge opportunities, for example at the King Alfred.
Renewable energy projects would decrease the amount of gas bought from Russia and oil bought from Saudi Arabia. This would be money that would remain within that community. The scale of the RE programmes in Germany were because they realised that it kept money in the country.
It would be possible to make B&H a ‘hub’ for RE. Kirklees were a ‘hub’ because they had just got on with the projects. It would be best to start with small projects, go and actually do them and then see if they work. In their experience, people find out that they like having RE installed on their properties and often a year later become an evangelist for it. Such projects would result in inhabitants changing their attitude to energy and increasing their energy saving. This was unlike insulation which did not change behaviour and often resulted in people turning their heating up.
He did not think there would be a problem with the grid, although this could be possible for the port. The DNO in the area – EDF – were pretty co-operative and one could normally get an answer from them.
He did not think there were massive barriers in the city, but one of the key challenges were the planning hoops they had experienced 9 years ago.
He had been involved with both OUVESCo and the Brighton Energy Co-op and talked about leasing roof space from BHCC. However, this had not been met with huge enthusiasm from the Council. What was needed in the Council was leadership and risk taking. But it could happen in the city, because it was happening elsewhere.
Questions to Howard Johns
Q: At the last Panel meeting we heard about Photo-Voltaic Thermal (PVT) technology – is there an argument for waiting for the technology to be right to invest, will there be an advance which is worth waiting for?
HJ: PV is in a solid state. The panels of today are a 1/3 of the cost and produce twice the output as one bought 9 years ago. There is no major breakthrough moment yet – did not believe that PVT was this breakthrough. At some time grid parity will be achieved, in about 5 years, when:
cost of energy from a power station = cost from renewable energy
Q: If the FIT is removed, where will this leave PV? How can we plan our strategy now?
HJ: The outlook will be bleak in the UK if FIT is removed.
Adrian Smith (AS): Kirklees kick started their programme before PV, so one needs to consider how to do this kind of programme without Governmental support.
HJ: We need both the FIT and microgeneration. I do not have an answer on how to plan without FIT.
Q: This issue has been politically pushed in Kirklees? Do you think a 3rd party is needed to help? Especially considering that you have already met the leaders of BHCC?
HJ: Silence has been the main reaction from BHCC. I had already discussed the possibility of an ESCo with the Head of Sustainability. This was because the ESCo established in Woking, Thameswey ESCo, reduced by 40% the energy costs of their HQ which enabled them to invest in further projects. I met with a lukewarm reaction when I told various people in the Council about ESCos. There is a need for political leadership. It is a complex area because there is not an obvious procurement route, which makes people cautious. The difficulty community groups face is that they do not have a track record or investment credibility. Which means that their projects are treated as laughable, and they find it difficult to make them stack up.
Ross Gilbert told the Panel that he was the Director of Quoin Estates and Developments. In July 2009 he had approached BHCC about setting up a Community Energy Centre in Portslade. He had produced a matrix which had been distributed to panel members, which recorded what an extremely frustrating process this had been. Mr Gilbert had been prepared to put up the £20,000 needed for the future development of as a co-op for both PV and a wind turbine. So it would have been a self-funded project. It had been a long process and involved a lot of work, but he had been hopeful of taking the project forward. For example, this process had been slowed down by a 3 month wait for the replacement of a cabinet member.
He had found dealing with the Council extremely frustrating, for example having to explain what a KW was. He had been told that the authority still supported the process. Then in October 2010, he had received a rejection letter out of the blue, having being told that the organisation wished to concentrate on PV. The model that he had developed would have involved a co-op which would have given an income to the Council. This income could have been used to establish the energy information centre, with the Council retaining the ownership of the land the installation was on. This was a community based scheme and would have needed the support of BHCC. In Kirklees they had a let’s see how it works attitude, which does not seem to be here in BHCC.
One of the reasons given by the Council for stepping back, was that it was going to carry out its own desktop analysis of wind sites in the new year. He was told that the sites were not yet identified and it took 3 emails to receive back information on the Council’s progress. He felt that BHCC lacked ambition when it came to wind energy, even though this technology could produce large amounts of energy. He had not been the first person to try and use on-shore wind in the city.
In contrast when he had contact with the Planning Department regarding putting up solar PV panels, he had had a very good experience with the process being sorted out in 12 weeks. Ross Gilbert had also a good experience with the council when installing solar thermal. He felt that BHCC should have enabled his organisation, by letting them get further with the project.
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A.O.B Minutes: There was no A.O.B. |