Wight Community Energy October 2017 Update

Dear Member,

It has been a remarkable period for weather and energy related news. The hurricanes in the Caribbean and southern USA brought home the harsh realities of a changing climate, yet there were also hopeful signs for power systems around the world. Here in the UK the latest round of offshore wind projects came in at significantly lower cost than the nuclear power option and on a par with new gas, the lowest cost source of fossil fuel energy. This is a terrific breakthrough and will accelerate the shift to renewable power in the UK. But it will not just be offshore wind that provides our energy in the future. The costs of solar continue to fall and the pipeline of projects to be built across the country with little or no government support is growing. Simultaneously energy storage technologies are rapidly entering the market, and as these mature, the revolution in energy use gets closer. Electric vehicles continue to make the news, being the talk of this year’s Frankfurt motor show. Sales in Europe are up 50% this year. We now have a Nissan Leaf in our family and more are to be seen around the Island, but more on that later.

Homestead performance

Our project at Homestead has had a tough start, with SSE unexpectedly imposing outage periods on us because of their need to upgrade infrastructure.  Legal, but unforeseen by anyone, it set back our margins in 2015/6, a disappointment so early in the programme. This year has been better than 2016, even though SSE outages continued. As explained at the AGM, we lost output in April but were worried by the prospect of summer (i.e. high production time) outages. It was on the cards that we might be disconnected for so long this year that we could lose about half the output. By forming a consortium with the other generators on the Island, we managed to secure reductions in outages and, crucially, change the schedule of SSE’s work to the winter time which will mean far less impact for us because we produce less in the winter. While we will not know the full effect until 2017 ends, it appears that the outage impact will be a lot less than we feared. Financially, this means we have been able to pay the interest owed on loans to the bank and the Isle of Wight Council. That said, things are otherwise very tight as we play catch-up, but we are solvent if not yet into surplus.

Refinancing

Our project, in common with almost all renewable energy projects, uses project finance. This means that the security for the loan is not the asset (e.g. the solar panels) but is the cash flow of the project. People who lend project finance money see the first year or two as the most risky – but once the project is proven they become more relaxed (and offer lower interest rates). This means that the finance we have at present (from Close Brothers) is unavoidably relatively expensive, to compensate them for the early project risk they are taking, and it has always been our intention to refinance as soon as we can with lower interest rate loans. Here we benefit from being supported by Mongoose Energy, who are working to put together a package of projects to a bank that favours renewable energy companies.  Although our loan would be individual to us (from the bank to Wight Community Energy), because we can approach them as part of a group, the rates we can attract are lower.  At Wight Community Energy we still have to prove that we are beyond the trickiest early stage of development, and of course the outages are holding us back somewhat.  But we hope that as 2018 starts we will have got through SSE’s outages and the data from Homestead will show we are less risky.  If everything goes well, we hope to have a new loan in place by April 2018. If this works out, our interest payments will drop substantially and our cash position will start to improve.

Wight Community Energy Board

I am very pleased that a diverse and experienced group of people agreed to join our board at the last AGM. The newcomers are:

  • Michael Lilley
  • Charlotte Rayner
  • Laurie Tenant

You can find their CVs on our website, but in brief Michael is the Green Party Councillor for Ryde East and brings commitment to renewables, a useful voice in the Council and invaluable local knowledge. Charlotte has a no nonsense business manner and long experience of academia and business studies. Laurie has recently sold his solar energy company Engenius, one of the longest established on the Island, and has unrivalled knowledge of solar technology.

We had our first board meeting on 5 September at Seaclose Park offices with Mongoose staff attending by phone link.  Mongoose reported how our formation of a consortium of solar producers on the Island to lobby SSE had been used as a ‘good practice’ tip around the country!  It was a chance for us all to get to know each other and to decide who will be volunteering for which tasks.  We are unpaid, and so spreading the load around the group will hopefully mean that we can achieve more. It was an excellent meeting full of energy and ‘can do’, and I am very confident that we have a very good team for the future.  The minutes can be accessed here.

Life with a Leaf

As I mentioned earlier, my wife and I now have a second hand Nissan Leaf in our family. We bought it from JustEVs back in February and it quickly became a firm favourite – our faithful Honda Civic is feeling very neglected. The Leaf is quiet and so easy to drive. Totally automatic, just a small knob to make it go forwards or backwards, that’s it. The maximum practical range is around 100 miles, but it is easier on the batteries to only charge them to 80% capacity, which is what we do most of the time. That reduces the range to around 70 miles, but as we only use the car on the Island, that has yet to be a problem!

We try to charge it when our domestic solar panels are working, but even if we take all the power from the grid, the cost works out at around 2.5 pence per mile, as compared to 15p per mile for the Honda. With a new model Leaf coming out next year, the model we have is becoming a snip. New ones are available at large discounts and there are low mileage second hand ones like ours for £10,000 or less.

In the longer term, we have not just bought a new car, but also a battery pack. Nissan and others are working on systems that will allow EVs to supply power as well as simply be passively charged. The day will come when our Leaf will power the house in the evening, then charge up ready to go in the morning.

If you are tempted to try an EV we would be happy to give you a demo of ours – please just get in touch.

 

Best Wishes,

Colin Palmer. Chair, WCE