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The sun shines on councils’ green energy deals

(left) Fabrice Bouchon from Veolia with Darren Merrill, cabinet member for environment and public realm

Government subsidies for solar photovoltaic (PV) panel installations have been cut back dramatically during the past few years.Yet there have been a number of recent high-profile developments that have seen MRFs, recycling facilities and former landfill sites transformed into sun-powered electricity generators.

Two such developments finished in London in the past year. As exclusively covered by MRW in April, Bywaters completed what was hailed as the largest PV array retrofit in the capital at its MRF in Bow. The roof is now covered with around 4,000 panels that are capable of powering the entire facility.

And in June last year, just in time for summer, a joint project between Southwark Council and Veolia saw around 2,500 PV panels installed on the roof of the Southwark Integrated Waste Management Facility – an area the size of four football pitches.

There are shared environmental goals between the recycling and solar industries. But more than pursuing laudable green ideals,these schemes are based on hard-nosed business sense. Bywaters secured funding for its scheme from HSBC bank,whereas Southwark Council used its own cash.

Ian Smith, Southwark’s head of environmental services,says the idea came about as the council was seeking new income streams: “At the time,the council was reasonably capitalrich but revenue-poor. So it dawned on me one day while visiting the site that there was this bloody great roof with nothing on it – and it’s south facing.”

After that revelation Smith got in touch with the council’s waste management contractor Veolia,which runs the site, and came to an arrangement.“We said we will put up the capital if you commission the solar company. Then the council will get the Feed-in Tariff (FiT) income and sell the electricity back to Veolia at a discounted rate,” he explains. “They save some money on their electricity bill, we make some money by selling to them and from the FiT income.”

With Veolia in charge, Southwark circumvented laborious procurement procedures. The company chose British Gas to install the panels,and the scheme from start to finish took eight months.The panels now generate around 674MWh of energy a year.

“I think the difficulty we would have had is that, because of EU procurement rules and regulations,it would have taken a year to 15 months rather than eight,” says Smith. As it turned out, the undulating wave design of the facility’s roof helped because panels could be put at an angle of 10-15° – close to the optimum electricity generation angle of 20°. It also meant the panels are cleaned naturally by rain.

In another lucky break, the scheme was approved before a reduction in FiT solar PV subsidies. Tariffs have been decreasing steadily in the past few years because the Government wants to control the cost of the scheme and limit the impact on consumer bills.

Smith says: “We got in just in time. The agreement is that, whatever the rate is at the point you get registered, that’s the rate you keep. We had some ballpark figures of what the project might cost us – about £500,000 to start with a payback of around seven years. The panels will keep generating for about 20 years.”

Apart from a blip while dealing with the facility’s manufacturer – which insisted on providing brackets for the PV panels because it would not provide a warranty that the roofcould take the weight – the project went to plan. But Smith has a warning for other local authorities looking to do something similar.

“The reduction in the FiT is probably going to put people off. Councils are quite slow at reacting to new technology and new ideas, so I think that, by the time they have said ‘oh, that’s quite a good idea’, the income isn’t worthwhile any more. I would advise other councils:if you’ve got the capital, use it, because otherwise it’s in the bank earning nothing.

“My second piece of advice is that, before you go too far down the road, make sure the roof can take the weight. And if you are going to sell the electricity to the user of the building, be very clear from the outset what sort of percentage discount you’ll give.”

MRFs are prime candidates for PV panels because of their large roof space. Likewise, former landfill sites present a good opportunity. Public Power Solutions, a company run by Swindon Borough Council, is pressing ahead with the transformation of a former landfill into a solar facility capable of producing 2.5- 4MW of power. The electricity generated will be plugged straight into the nearby Waterside household waste recycling centre and a solid recovered fuel plant.

Flintshire County Council is also poised to sign a contract with a solar energy company to set up PV farms at two landfill sites that closed down around 10 years ago, Brookhill and Standard in Buckley,after councillors agreed there was “still a decent return on investment” to be achieved in the wake of subsidy cuts.

The idea was first floated two years ago by the council’s energy manager Will Pierce. He says the deal with the chosen provider, Lark Energy, estimates the payback period for the schemes will be nine to 10 years.

“The reason for selecting former landfills is because they have good electrical grid connections as we already use these sites to generate landfill gas,”he says. “So we already had 1MWplus supply capacity at the sites to export energy. And with any solar farm, the grid connection cost can make or break a business case.”

Landfills also have good vehicle access for HGV deliveries and, crucially, are in striking distance of council-owned properties.

“Under FiT regulations now, if the solar farm is bigger than 250kW,you must utilise at least 10% of the generated electricity on-site,” says Pierce. “With Brookhill and Standard, we are having to do some private wire connections to nearby buildings under our ownership. This significantly reduces our energy costs – a saving of about 5.5p per kWh on top of the FiT rate. Without on-site consumption, the payback would be so miniscule that no local authority would entertain the idea.

“On the Standard site, we are connecting to our plastics recycling plant, which is 25-30yards away. Plastics gathered from kerbside collections are separated into bottles, bags and other streams to go to appropriate facilities.”

The Flintshire schemes have a strict deadline: if they are not up and running by 3 October, they will fail to qualify for the required FiT rate. All being well – the council also has to navigate with Natural Resources Wales about protecting some great crested newts at the development – the Standard site is expected to produce around 370kW at peak power and Brookhill around double that.

Pierce was helped by the Association of Public Sector Excellence, a not-for-profit local government body that came up with a ‘solar tendering framework’ alongside Northumberland County Council.

So what message would he give any council looking to develop PV farms? “Good luck – it’s quite trying.You have to jump through a lot of hoops and you need determination.”

Feed-In Tariff Solar Subsidies

FiTs are a system of guaranteeing payment for small-scale renewable electricity schemes, including solar PV and anaerobic digestion, paid for through consumers’ energy bills. There are both generation and export tariffs.

As of December 2015, the scheme supported more than 780,000 installations, with a total of 4.2GW of renewable electricity-generating capacity across all supported technologies.

After consulting on the future of FiTs, the Government decided to continue with the scheme and cap overall expenditure. It will be under review until generation tariffs end in 2019.

 

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