Councils’ assets could power a much-needed funds boost
CASH-STRAPPED Welsh councils could land a £1bn windfall if they use their assets to generate electricity, according to expert forecasts.
Local authorities recently gained the right to sell electricity to the National Grid. Now they can cash in on generous 25-year payments for all electricity produced by new microgeneration equipment.
One council alone stands to receive almost £35m of net payments, simply by fitting solar panels to less than a third of its housing stock and 13 other council-owned buildings.
If Wales’ other local authorities matched Wrexham council’s plans, the 22 authorities would collectively receive £760m of new income over 25 years.
Wrexham’s calculations exclude reductions in energy bills, thanks to the free electricity available at each solar-fitted building. The total windfall, including those savings, could be about £1bn. The annual electricity bill for Cardiff County Hall alone is about £500,000.
Wrexham’s executive board will decide next week whether to approve the installation of photovoltaic (PV) panels on the roofs of 3,000 of the council’s 11,000 homes. The £26m estimated cost would be outweighed by £56m of income over 25 years.
Wrexham officers believe PV on 13 other council buildings, including schools, offices and leisure centres, could produce £4.6m net income.
Phil Walton, Wrexham’s strategic and performance director, said: “The added benefit is that using the energy generated by the panels is expected to significantly reduce the energy bills for those buildings.”
He said the unit price for electricity under the Feed-in Tariff (FIT) would reduce for installations registered from April 2012, and FIT may not apply at all to installations registered after March 31, 2013.
Councils are also exploring other eligible technologies. Torfaen expects to receive income of between £17,000 and £30,000 per annum for electricity produced by a new stream-powered turbine near Blaenavon. Cardiff council is investigating hydro power at the weir it owns on the Taff at Radyr, as well as other options.
Caerphilly council aims to erect two wind turbines at Oakdale business park which would generate enough electricity for 2,400 homes.
Caerphilly also plans to burn methane from decomposed rubbish at its Llanbradach landfill site to generate electricity. Many councils collect new organic waste separately from other refuse, and the biogas given off by that waste could generate electricity qualifying for FIT payments.
A wind turbine and solar panels at Ysgol y Traeth, Barmouth, already supply electricity to the grid and are expected to produce almost £2,000 of income a year for the school, as well as cutting energy bills. Head teacher Ywain Myfyr said other schools should consider doing the same.
This month, Flintshire council’s executive will discuss a report identifying options for FIT projects. Energy manager Will Pierce said the council had already provided a wind turbine, at Flint High School, and eight PV installations funded with Government grants.
Solar-power expert Prof Stuart Irvine said the FIT was expected to repay investors’ outlay on microgeneration equipment within 10 or 12 years.
“I think it’s likely they could get a return in a shorter timescale, but the point is it’s guaranteed. If you invest money today in the stock market, you’re not guaranteed a return within 10 years,” said Prof Irvine, of Glyndwr University’s Centre for Solar Energy Research.
“Local authorities have to make decisions on how they invest in infrastructure. We don’t want councils taking unnecessary risks. This is a safe bet because it’s Government-guaranteed for 25 years.”
He could not estimate councils’ potential FIT windfall, but said: “The scale Wrexham council is talking about could be replicated across Wales, without too much difficulty. We’re looking at the tip of an iceberg. You can see the potential is huge if you look at all the roof areas of domestic and public buildings.”
New nuclear power stations would not produce electricity for a decade. Microgeneration was a quicker way to cut carbon emissions from power stations burning fossil fuels, he added.
Wrexham’s move comes at a time of growing concern over council budgets in Wales as a result of public sector cuts.
Tim Peppin, of the Welsh Local Government Association, said it would highlight the FIT to councils not already considering it. However, some authorities might have difficulty funding the equipment up front, and some would have fewer options than Wrexham because they had transferred their housing to social landlords.
Numerous companies offer to provide microgeneration equipment in return for part of the proceeds. Wrexham council officers considered that option, but say the council should install its own solar panels using funding sources such as “prudential borrowing” and “invest to save”.
Monday, 8 November 2010
Wrecsam Council powers ahead with PV panel scheme
Wrecsam Council could lead the way in terms of using its assets to generate electricity - and providing much needed work as well. This report provides an interesting assessment: