Development of a Scottish Government Policy Approach to Repowering. Debbie Harper Arup Glasgow

Transcription

1 Development of a Scottish Government Policy Approach to Repowering Debbie Harper Arup Glasgow

2 Overview 1. Overview of Scottish Government s emerging Energy Strategy 2. Summary of Existing Planning Policy Position 3. Review of potential scenarios: i. Decommissioning ii. Refurbishment iii. Partial decommissioning and repowering iv. Repowering v. Extension of existing consents vi. The Strategic Approach 4. Summary of Issues

3 Scottish Government s Emerging Scottish Energy Strategy 1. The Scottish Government is in the process of developing work to produce an overarching Energy Strategy for Scotland. Throughout this process, the Scottish Government will draw on the expertise of Scotland s industrial and academic communities and open a public dialogue with Scottish communities and energy consumers over their energy future. 2. A Draft Repowering Policy, is being considered to give high level guidance for repowering projects Acknowledging the different emerging scenarios Planning principles (applications, duration of consent, EIA Regs, cumulative) Good Practice Principles on Community Benefit and Shared Ownership Infrastructure and attempts to future proof Networks Opportunities for Scotland

4 Summary of Existing Planning Policy Position Scottish Planning Policy, 2014 Paragraph 161 Development plans should also set out the criteria that will be considered in deciding all applications for wind farms of different scales including extensions and re-powering Paragraph 170 Areas identified for wind farms should be suitable for use in perpetuity. Consents may be time-limited but wind farms should nevertheless be sited and designed to ensure impacts are minimised and to protect an acceptable level of amenity for adjacent communities. Paragraph 174 Proposals to repower existing wind farms which are already in suitable sites where environmental and other impacts have been shown to be capable of mitigation can help to maintain or enhance installed capacity, underpinning renewable energy generation targets. The current use of the site as a wind farm will be a material consideration in any such proposals.

5 Potential Scenarios 1. Decommissioning Decommissioning of an existing onshore wind site in accordance with consent conditions. 2. Refurbishment Refurbishment of infrastructure which may be able to be accommodated within the boundaries of the existing consent. 3. Partial decommissioning and repowering The partial decommissioning of existing infrastructure and installation of new infrastructure in a different layout and in a wider geographical envelope (perhaps due to larger tip heights being proposed)

6 Potential Scenarios cntd. 4. Repowering The decommissioning of existing infrastructure and installation of new infrastructure, perhaps in different geographical positions and in a wider geographical envelope. 5. Extension of existing consents This type of repowering may require an amendment to any timelimited condition alone. 6. The Strategic Approach Possible strategic planned approach for future deployment of large-scale wind Developing ideas already posed by others including Scottish Enterprise, SNH, LUC & Landscape Institute Scotland Any strategic approach would require support from the planning system at a strategic level (NPF & SPP)

7 Summary of Issues 1. The repowering agenda is progressing much faster than anticipated 2. Variety of development options expected to come forward 3. Development options are likely to be developed in a subsidy free environment 4. All development projects will be forced to consider: i. Reducing development costs (EIA, engineering & development) ii. Maximising energy outputs iii. Best Practice measures (Community Benefit, Shared Ownership & Habitat Management Schemes)

8 Jeremy Sainsbury, Natural Power Cares Conference, The Golden Lion, Stirling Re-Powering Date: 16 th March 2016 Produced For: Cares Conference GW 4,743,470 9 MtCO project experience (and counting) equivalent (UK) homes powered abated annually renewable experts countries of project experience

9 what we do our services

10 Re-Powering : Why? End of life. Life extension. Poor performing asset. Ownership change. Obsolete technology. Up powering.

11 Policy : EU, Westminster & Holyrood. EU : State aid defines 5MW projects as small and therefore not covered by the same competitive auctions rules as large projects. Westminster : Now concentrating on budget control of FIT above all practical issues. They have not addressed yet the long term way forward. Heat should also be considered in this segment going forward. Positive to community projects. Holyrood: New Energy policy this summer. V Positive towards community projects and focussed on energy not just electricity.

12 Timeframes & markets. Starting as a Niche market. Now main opportunity will start for electricity. Land reform legislation opens the market 2017/18? Heat and transport opportunities. Smart meters Cost control and energy efficiency, not just production. By Storage 2020.

13 Paul Phare, Energy4All Development Manager

14 Background Baywind site Harlock Hill 5 X 500kW wind turbines Built 1997 Baywind members voted to support the repower of Harlock Hill in 2010

15 Background Infinergy came to Baywind Co-operation agreement with Infinergy Two sites, Split Ownership Infinergy cover planning costs 2 turbines for Baywind on Harlock Hill 3 for Infinergy on neighboring hill Planning permission granted in July 2014

16 New Structure Decision to create a new entity Why? Option for Infinergy to build both sites HWCES decided to proceed with help from E4A Agreement to share information with Infinergy Separate tender for BOP, shared procurement of turbine and access agreements HWCES has its own grid connection Community benefit fund 40k/annum

17 Project Finance 3.4m raised with a public share offer Baywind prepared to lend to HWCES Baywind loan will be re-financed once site is commissioned Baywind member s capital can be repaid

18 Lessons Learned This couldn t have happened without Baywind Baywind had the site & a long term lease Or without Energy4All s expertise There were contractual challenges Split ownership maximises community control Importance of keeping in step with developer Timing is a crucial issue Accurate financial modeling was vital

19 Potential Issues Baywind had the site, track record, experience & Energy4All and it was still difficult to deliver Not every community will be so well armed Onshore CfDs Can split ownership model work? Separate agreements, grid & banking Can communites lead repowering? Where will risk finance come from? How do shared ownership sites get valued?

20 Refinance & Repowering Community Renewable Energy Projects Local Energy Scotland Conference

21 Content 1. Refinance & Repowering 2. Good Practice/Process 3. Case Studies 4. Bank Overview and Offering 5. Questions 21

22 Triodos Bank Refinance & Repowering 1. Refinancing of a existing operational renewable asset is relatively straightforward (as there is no construction risk), either using a project finance route or asset finance structure. 2. Repowering potentially has a few obstacles to over come such as: 1. Planning Restrictions (hub heights/eia). 2. Existing consents (limited time frame). 3. Lease consents/provisions/terms. 4. Grid Connection route/point of contact. 5. Maintaining existing Production levels (output). 6. Additional Engineering/Civils 3. That said if everything stacks up from a technical and financial point of view then it is easily achievable subject to satisfactory diligence 22

23 Environment Team Process We work with projects tirelessly throughout the diligence phase, we understand that this can be a time consuming process and encourage developer input and participation. This will become a fulltime job for the developer s project manager. We will be there to assist with all enquiries. Regular meetings and conference calls are required to maintain focus and deliver the project on time and within the agreed legal and technical scope which is agreed with all parties at the outset. Open relationships with funding partners such as Junior funders sharing the findings from any diligence activities and ensuring we are all working together to deliver the project. Technical advisors join and participate in calls and relevant communications/meetings. We can add value with the various contracts such as the Technology Supplier agreement, PPA, Lease, Civils and BOP to ensure they are in a workable/bankable form. 23

24 Triodos Bank Best practice Investment readiness Strong governance Bankability Sponsor and/or community support Refinancing = begin with the end in mind Engage with your bank early and develop a relationship Work with experienced advisors who understand Bank requirements Property, property, property. Strong understanding of Renewable Energy resource Clear electricity marketing strategy given we are approaching a subsidy free market. 24

25 Triodos Bank Case Studies 1. Galson Energy Limited (Isle of Lewis) refinance of a 900kW Wind Turbine with a further two turbine extension. 2. Cloffrickford Wind Farm (Aberdeenshire) refinance of a large scale wind farm. 3. Udny Community Wind Farm 900kW in Aberdeenshire. 4. Callander Community Hydro 425kW Hydro Scheme. 5. Fetterangus Community Wind Farm 900kW in Aberdeenshire 6. Various Solar Sites where there has been a JV with commercial Developer and Community Group. 7. Currently in discussions with six sites for Refinance/Repowering 25

26 Triodos Bank UK offering Sectors Wind Hydro Solar Biomass Energy efficiency Offering Project finance loans from 1 to 15 million 15 year debt amortising loan Fixed pricing: Construction finance plus 10 years, can do 15 years No cash sweeps 26

27 Triodos in Scotland Who were are: In Scotland, the Bank has 3 specialist relationship managers who are based in our Edinburgh office in Frederick Street. There are 3 specific areas of the business: Development, Social & Cultural Housing, Sustainable Healthcare, Arts & Culture. funding, Environment Project Finance, Renewable Energy Energy efficiency. Food Farm & Trade Sustainable Tourism, Organic Farming.

28 Questions...