Good news from Swansea, where Swansea Community Energy and Enterprise, or SCEES for short, is enjoying a very successful community share offer for a new solar PV scheme based in deprived parts of the city.
As well as bringing clean energy to local community buildings, providing jobs and training is at the centre of thinking behind the plans. At the time of writing, the scheme had raised £380,000 – 89 percent of its target – so when you read this, it will probably have reached its goal.
Ant Flanagan, Director at SCEES, said: “It’s all about putting cash in the community. In this scheme there’s half a million pounds of community benefit, supporting people at a local level. The benefit is multiplied when you’re moving people’s money from things that generate income elsewhere towards something where it’s staying local.
“Then there are the wider benefits that are more difficult to quantify, like engaging a number of people in the idea of positive change. That might be in terms of climate change or community solidarity; getting them to move from feeling powerless to doing something proactive. Community energy is a brilliant vehicle for mainstreaming the cooperative movement, which has been widespread across the world for years.”
FINDING NEW MODELS
Although the positives are clear, the business model of SCEES rests on the previous, higher rate of Feed-in Tariff, the government subsidy for clean energy generation. So how are schemes like this going to work in the future? Head of Energy Saving Trust Foundation Graham Ayling explained:
“Firstly, there’s a clear downward trend in the price of solar PV. The economics have just been getting better and better. Even in the last year I’ve seen schemes get quoted prices far lower than 12 months ago.”
SCEES’ model means it is able to sell electricity to schools and a care home at much lower than retail price. In future, schemes probably won’t be able to do this. Graham thinks progress can still be made by taking a bigger view. He said:
“There is this hiatus in developments of this kind after huge growth. But the future could well be to look at working with big property owners who are willing to host large installations of solar PV and buy the electricity at retail price. This might be working with the public sector or could be working with companies, such as supermarkets or DIY chains.”
“If you’re working with a substantial portfolio you can ensure the most suitable roofs, and the best scale, which could ultimately result in developing standard approaches that could help reduce costs further.”
SCALE UP, COSTS DOWN
Community energy has come a long way from the small, niche cottage industry it once was, and that’s important as groups go in search with ways of making projects stack up. Ant from SCEES explained:
“Scale is critical in finance – and this is something that most community energy cooperatives grasp. It’s about getting from those £500,000-5million projects to bigger ones where you’ve got that economy of scale and capital, and also incorporating energy storage. Then there’s a massive opportunity.”
Having central backing doesn’t go amiss either. The project was supported by the Welsh Government’s Local Energy service, delivered by Energy Saving Trust, that supports community and local renewable energy projects across Wales. Graham adds: “Welsh Government support means we’ve got a network of projects and are looking a number of other sites. I’m optimistic we can put a portfolio together.
“When you talk about economies of scale, a good example is that there are providers offering PV for free to housing associations again now. When you’re looking at £20million of finance, you get a very low interest rate.”
UP THE SWANS
Swansea is seeing the benefit of government support, as well as other advantages. It is starting to prove something of a hub for innovative energy projects, as Ayling explained:
“There’s a lot going on in Swansea and the surrounding area. Solar farms, a tidal power proposal, and Swansea Bay City Region plans for an ‘internet of energy’, plus lots of research going on at the engineering department of the university. It seems like the area has the potential to take a lead here.
“The great thing about SCEES is it has clearly demonstrated the Council’s support for community energy, as part of the future sustainable energy mix for Swansea.”
MORE THAN MEGAWATTS
Ant from SCEES agrees, and thinks the connections made are over an even wider group of interested parties. He explained: “The project has been a useful bridge between the public sector and communities – it’s brought about a more positive conversation. But the private sector is looking on closely as well.
“We’ve had private developers approach us looking to get community benefit into their work, and people in the industry have got in touch about their products which are suitable for schools. We’re providing that connection between innovation in the private and community sectors and people in the council working on the future of energy in the city”.
“In the end, it’s way beyond the megawatts installed. It’s a great way to demonstrate community energy’s potential for the future. In that sense, we’re punching above our weight.”
Aside from making the economics work, its vital schemes like this have a deeper social impact. Ayling is confident that in this case, this is definitely on the cards. He said:
“The project is deliberately in deprived wards, with half a million going into skills and job creation. There’s a perception that community energy is for rich middle Englanders, but a project like this shows that’s far from the truth. It’s about raising aspirations, giving ownership, and giving people the skills to play a role in one of the most important industries of the next few decades.”