Transition Transition Falmouth & PenrynFalmouth & Penryn

Gage Williams Gage Williams OBE MACantab MIETOBE MACantab MIET

Renewable Energy Office for Cornwall Renewable Energy Office for Cornwall (REOC)(REOC)

gagewillms@aol.comgagewillms@aol.com, 01208 841378, 01208 841378

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DECC AmendmentsDECC Amendments Energy Act – 2 amendments to introduce:Energy Act – 2 amendments to introduce:

a.a. £400/MWh feed-in tariff for electricity from microgeneration (50kW or less)£400/MWh feed-in tariff for electricity from microgeneration (50kW or less)

b. Renewable Heat Incentive of £20/MWhb. Renewable Heat Incentive of £20/MWh If accepted, will increase demand for microgeneration:If accepted, will increase demand for microgeneration:

50 kW wind-turbine revenue will jump from £24,000 to £80,000 pa50 kW wind-turbine revenue will jump from £24,000 to £80,000 pa Water mill jumps from £7,200 to £24,000Water mill jumps from £7,200 to £24,000

Biomass CHP & Ground Source Heat Pumps will be paid for heatBiomass CHP & Ground Source Heat Pumps will be paid for heat

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Sources REOC 2002 , Bioregional: creating low carbon communities  

Based on 12.4 tons CO2 per person: one tonne of Based on 12.4 tons CO2 per person: one tonne of heating oil when burnt emits 3.16 tons CO2heating oil when burnt emits 3.16 tons CO2

Population of Fal/Penryn is ~30,000Population of Fal/Penryn is ~30,000

Emissions activity % Tonnes oil equivalent

per person

Fal/Pen toe

food 22% 0.90 27,000

building shared infrastructure 19% 0.75 22,500

energy use in home 17% 0.68 20,400

personal transport 14% 0.54 16,200

waste and consumer goods 13% 0.51 15,300

using shared services 12% 0.43 12,900

home infrastructure 3% 0.14 4,200

  100% 3.94 118,500

Fal/Pen tonnes of oil equivalent p.a.Fal/Pen tonnes of oil equivalent p.a.

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Ground Source Heat Pumps (GSHP)Ground Source Heat Pumps (GSHP) Cornwall leads the GSHP fieldCornwall leads the GSHP field Ideal for new houses or as replacement boiler for Ideal for new houses or as replacement boiler for

20% of old houses20% of old houses Fal/Pen has 13,200 houses; 2,640 to have GSHPFal/Pen has 13,200 houses; 2,640 to have GSHP Typical cost £7,500 less £2,500 grantTypical cost £7,500 less £2,500 grant Net cost of £1,500 more than new oil boilerNet cost of £1,500 more than new oil boiler Put in 4 MWh of electricity; get back 16 MWh heatPut in 4 MWh of electricity; get back 16 MWh heat Get annual refund of £320 with Renewable Heat Get annual refund of £320 with Renewable Heat

Incentive if it is £20/MWhIncentive if it is £20/MWh

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Kensa’s new heat Kensa’s new heat pump designpump design

Domestic Ground Source Heat PumpDomestic Ground Source Heat Pump

A SlinkyA Slinky

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GSHPsGSHPs

Can be horizontal if space is available or vertical Can be horizontal if space is available or vertical or sunk in a lakeor sunk in a lake

Most effective if pump’s electricity is renewable – Most effective if pump’s electricity is renewable – 4:1 energy gain4:1 energy gain

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Domestic EnergyDomestic Energy

Average Cornish house uses 4 MWh Average Cornish house uses 4 MWh electricity & 16 MWh for heating/hot waterelectricity & 16 MWh for heating/hot water

With GSHP this becomes 8 MWh electricity With GSHP this becomes 8 MWh electricity plus £320 annual RHI refund sufficient to plus £320 annual RHI refund sufficient to buy 3 MWh of electricity at ~10p/kWhbuy 3 MWh of electricity at ~10p/kWh

Leaves 5 MWh electricity to find RE supply Leaves 5 MWh electricity to find RE supply if the 2,640 houses with GSHPs are to go if the 2,640 houses with GSHPs are to go 100% green energy100% green energy

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Micro Wind-TurbinesMicro Wind-Turbines Not more than 50kW as earns £400/MWh Not more than 50kW as earns £400/MWh

compared to larger turbines’ ~£120/MWhcompared to larger turbines’ ~£120/MWh Carland turbines are 400kWCarland turbines are 400kW 50kW far smaller –height of blade tip is 34m 50kW far smaller –height of blade tip is 34m

(110ft) only. New large turbines 440ft.(110ft) only. New large turbines 440ft. Need to be >100m apart, best to cluster as Need to be >100m apart, best to cluster as

cuts planning & hook-up and other costscuts planning & hook-up and other costs Fal/Pen could lease a windy site perhaps in Fal/Pen could lease a windy site perhaps in

the Clay Area or use your own site rent free!the Clay Area or use your own site rent free! But output = cube of the average wind speedBut output = cube of the average wind speed 6 m/sec = 216; 8 m/sec = 512; 137% more 6 m/sec = 216; 8 m/sec = 512; 137% more

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PGE 20/50 Wind-TurbinePGE 20/50 Wind-Turbine

Ave wind Ave wind 7m/sec7m/sec240 MWh pa 240 MWh pa earns £96k at earns £96k at £400/MWh £400/MWh feed-in-tarifffeed-in-tariff

Clay Area Clay Area 8m/sec 8m/sec 280 MWh pa 280 MWh pa £112k pa£112k pa

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Micro Wind and GSHPMicro Wind and GSHP The 2,640 GSHP houses needed 5 MWh renewable The 2,640 GSHP houses needed 5 MWh renewable

electricity to go 100% greenelectricity to go 100% green 5 MWh would cost ~£500 at 10p/kWh (av domestic rate)5 MWh would cost ~£500 at 10p/kWh (av domestic rate) Each micro turbine earns £96k gross, £75k netEach micro turbine earns £96k gross, £75k net Each turbine can provide the income required to buy 5 Each turbine can provide the income required to buy 5

MWh for 150 houses with GSHPsMWh for 150 houses with GSHPs 18 wind-turbines & 2,640 GSHPs would convert 46,560 18 wind-turbines & 2,640 GSHPs would convert 46,560

MWh to green energy saving 4,084 toeMWh to green energy saving 4,084 toe Communal turbines get 50% capital grant reducing cost Communal turbines get 50% capital grant reducing cost

from £200k to ~£120kfrom £200k to ~£120k Cost of a 150Cost of a 150thth share is £800; GSHP cost is £1,500 after share is £800; GSHP cost is £1,500 after

grant and oil boiler replacement is deductedgrant and oil boiler replacement is deducted 2,640 households would need to find £2,300 to save 2,640 households would need to find £2,300 to save

£2,000 pa they would have paid for 20 MWh£2,000 pa they would have paid for 20 MWh 87% annual return!87% annual return!

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For the 80% without a GSHPFor the 80% without a GSHP For free domestic energy they need an income of For free domestic energy they need an income of

£2,000 pa (10p/kWh)£2,000 pa (10p/kWh) The net £75k earned by a wind turbine could The net £75k earned by a wind turbine could

achieve this for 37 housesachieve this for 37 houses Each house to buy 37Each house to buy 37thth share in a turbine costing share in a turbine costing

£3,380 to earn £2,000 pa; 59% return pa£3,380 to earn £2,000 pa; 59% return pa Would need 285 wind-turbines; total 303Would need 285 wind-turbines; total 303 Would require ~88 ha (220 acres)Would require ~88 ha (220 acres) Would generate 68,400 MWh green electricity Would generate 68,400 MWh green electricity

saving 6,000 toesaving 6,000 toe Total 10,084 toe saved; Total 10,084 toe saved; 8.5% of Fal/Pen’s 118,5008.5% of Fal/Pen’s 118,500

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How they might clusterHow they might clusterThe diagram shows area The diagram shows area needed for cluster of needed for cluster of 303 turbines (220 acres)303 turbines (220 acres)

100m apart needs 88 acres; av wind speed 8.1m/sec100m apart needs 88 acres; av wind speed 8.1m/sec

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The Multiplier EffectThe Multiplier EffectElectricity Heat/HotWtr Cost

4 MWh 16 MWh = £2,000

8 MWh £320 RHI refund = £480

8 MWh £320 refund + £500 div = £20 profit

150 shares at £800

£75k net

£1,500 after grants etc

Notes: Assumes domestic tariff is 10p/kWh; GSHP is installed in new build or replaces oil fired boiler; and 50kW wind turbine achieves 240 MWh for net £75k.

£2,300 invested earns gross £2,020 per year if FIT is 40p/kWh & RHI is 2p/kWh

Today

1 wind share

GSHP

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Micro-Hydro SchemesMicro-Hydro Schemes Fal/Pen has rich potentialFal/Pen has rich potential Argal Res 17m higher than College Res Argal Res 17m higher than College Res

– could take 50kW micro-hydro– could take 50kW micro-hydro College Res to sea 64m another 50kWCollege Res to sea 64m another 50kW Helland Mill at head of Argal 15kWHelland Mill at head of Argal 15kW Total 115kW at 80% generates 806 MWh Total 115kW at 80% generates 806 MWh

worth £320k pa worth £320k pa saving 73 toesaving 73 toe

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Rural Solution – Micro HydroRural Solution – Micro Hydro

River Dart 48kW River Dart 48kW uses weir, uses weir, improves fishing improves fishing & flood & flood protectionprotection

Can Can either either use pipe use pipe to to Francis Francis Turbine Turbine or leat to or leat to water water wheelwheel

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Tidal SchemesTidal Schemes

2 sq km estuary between Penryn & Trefusis Point2 sq km estuary between Penryn & Trefusis Point 3 metre average tide; 60 million tonnes of 3 metre average tide; 60 million tonnes of

seawater every six hoursseawater every six hours 20 tethered jetties + 50 kW Gorlov Vertical 20 tethered jetties + 50 kW Gorlov Vertical

Turbines at 15% efficiency could generate 1,314 Turbines at 15% efficiency could generate 1,314 MWh earning £525,600 pa MWh earning £525,600 pa saving 116 toesaving 116 toe

Jetties could create new mooringsJetties could create new moorings

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Farm Biomass CHPFarm Biomass CHP Small biomass CHP plants designed to match the 50kW Small biomass CHP plants designed to match the 50kW

microgenerator limitmicrogenerator limit Need 840 tonnes woodland & sawmill waste, miscanthus Need 840 tonnes woodland & sawmill waste, miscanthus

(16-20t/ha), waste wood(16-20t/ha), waste wood Each generates 400 MWh electricity, 1,180 MWh thermal Each generates 400 MWh electricity, 1,180 MWh thermal

& 84 tonnes bio-coal& 84 tonnes bio-coal Would collocate with schools, supermarkets, business Would collocate with schools, supermarkets, business

parks, marinas, swim poolparks, marinas, swim pool If 11 had a plant, would generate 4,400 MWhe, 12,980 If 11 had a plant, would generate 4,400 MWhe, 12,980

MWh thermal & 924 tonnes bio-coalMWh thermal & 924 tonnes bio-coal If half the heat is sold for £15/MWh and the bio-coal for If half the heat is sold for £15/MWh and the bio-coal for

£300/t would earn £2,390,000 pa £300/t would earn £2,390,000 pa savingsaving 2,005 toe pa (post 2,005 toe pa (post chipping, haulage, harvesting)chipping, haulage, harvesting)

Total saved to date is 12,229 toe (10.3%)Total saved to date is 12,229 toe (10.3%)

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Farm Sized Biomass CHPFarm Sized Biomass CHPOrganics Biomass Organics Biomass Energy CHP plant:Energy CHP plant:

Fuel: 840 tonnes woody mix incl miscanthus/SRC willow

Capex ~£400k, Rural Dev Prog grant £140k

O&M annual costs ~£65k

Sale of CHP & Char ~£200k

Net return of £135k on £260k investment

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Counting the CostCounting the Cost

Assuming an Operating & Maint cost of Assuming an Operating & Maint cost of 20% pa, net income is £26,000,000 & crude 20% pa, net income is £26,000,000 & crude payback is 22 months Installation takes five payback is 22 months Installation takes five yearsyears

Number RE System Cost MWh Heat MWh Revenue TOE Saved

Planning £2,220,000        

2640 GSHP + Wind £6,120,000 4,320 42,240 £2,572,800 4,084

3 Micro Hydro £600,000 270 0 £108,000 24

11 Biomass CHP £2,860,000 4,400 21,006 £2,337,654 2,006

285 50kW Wind £34,200,000 68,400 0 £27,360,000 6,000

20 Tidal/Gorlov £2,000,000 1,313 0 £525,000 115

  Totals £48,000,000 78,703 63,246 £32,746,120 12,229

Net Revenue after

~20% O&M £26,000,000

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The UnknownsThe Unknowns Will the Feed-in-Tariff be £400/MWh? Will the Feed-in-Tariff be £400/MWh?

It may reduce by 1% each yearIt may reduce by 1% each year Will the RHI be £20/MWh? How will the Will the RHI be £20/MWh? How will the

heat be measured; must it be used?heat be measured; must it be used? Will a cluster of 50kW wind-turbines no Will a cluster of 50kW wind-turbines no

longer qualify as microgeneration?longer qualify as microgeneration? Planning constraints and hurdles – Planning constraints and hurdles –

watch the new Planning Actwatch the new Planning Act Will parishioners support transition?Will parishioners support transition?

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The BenefitsThe Benefits

Puts about £26,000,000 into Fal/Pen Puts about £26,000,000 into Fal/Pen each year (~£2,000 per home)each year (~£2,000 per home)

Creates reserve fund of £29mCreates reserve fund of £29m Cuts heating costs & offers chance to Cuts heating costs & offers chance to

buy shares with dividendsbuy shares with dividends Eradicates/tackles rural & fuel povertyEradicates/tackles rural & fuel poverty Achieves degree of energy securityAchieves degree of energy security Saves ~38,640 tonnes CO2 per yearSaves ~38,640 tonnes CO2 per year

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How do you raise £48 million?How do you raise £48 million? Raise £20,000,000 equity preferentially from Raise £20,000,000 equity preferentially from

Fal/Pen over 5 years Fal/Pen over 5 years Works out at ~£1,500 per household Works out at ~£1,500 per household 3,670 houses put money up in first year for £5.5m3,670 houses put money up in first year for £5.5m Includes £1,500 for Ground Source Heat PumpIncludes £1,500 for Ground Source Heat Pump Shareholders agree to 50% of dividends for first 5 Shareholders agree to 50% of dividends for first 5

years to be put back into Fal/Pen Ltdyears to be put back into Fal/Pen Ltd Assumes 50% revenue for first year as wind & Assumes 50% revenue for first year as wind &

GSHPs generate as soon as they are installedGSHPs generate as soon as they are installed

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Self Funding for £48 million?Self Funding for £48 million?

No loan required based on £20 million equity, excellent rate of returnNo loan required based on £20 million equity, excellent rate of return

Reserve of Reserve of £29 million£29 million carried forward for repairs/replacements carried forward for repairs/replacements

This is just one example; many ways of doing thisThis is just one example; many ways of doing this

Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Build Rate 10% 22.5% 22.5% 22.5% 22.5%          

Capex £k 6000 10500 10500 10500 10500 - - - -  

Equity 5500 7500 4500 2000 500          

£k 50% 813 3047 5891 8734 11578 10563 8531 5688 2844 0

to Capex

£k 50% to 813 3047 5891 8734 11578 15438 17469 20313 23156 26000

Sharehldrs

Equity Return

15% 23% 34% 45% 58% 77% 87% 102% 116% 130%

         

Accum £k 313 359 250 484 2063 12625 21156 26844 29688 29688

Loss/Profit

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ConclusionsConclusions Each area will need a different RE mixEach area will need a different RE mix Feed-in-Tariff & RHI will lead to robust business Feed-in-Tariff & RHI will lead to robust business

plans for shareholders without going to banksplans for shareholders without going to banks Priority for Fal/Pen burghers to buy equity, Priority for Fal/Pen burghers to buy equity,

if not sold – offered outsideif not sold – offered outside Biomass CHP will get double benefitBiomass CHP will get double benefit Feed-in-Tariff and Renewable Heat incentive Feed-in-Tariff and Renewable Heat incentive

offer great opportunity for Cornwalloffer great opportunity for Cornwall Would save 12,229 toe; 10.3% of Fal/Pen’s total Would save 12,229 toe; 10.3% of Fal/Pen’s total

saving 30,000 people £8,900,000 if oil returns to saving 30,000 people £8,900,000 if oil returns to $147/barrel$147/barrel