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Feed In Tariffs - Tuesday, March 23, 2010

Caminus review of feed In Tariffs

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Caminus Energy Consultancy Limited
St. Ives
Cambs
PE28 3BF
United Kingdom

Tel: 44 (0)1487 741818 

Tel: 44 (0)7831 686324

Email:
General Information:
info@caminus.co.uk

Webmaster:
webmaster@caminus.co.uk

   Wind Energy Project Management  

Making your Wind Energy project happen

There are four main elements to the development of a wind power scheme. They address, in successively greater detail,  how a scheme will perform in environmental and financial terms.

Barrier study – essential, low-cost search for major problems.

Feasibility study – analysis of how the project will work for you.

Planning application – the unavoidable process of explaining the impacts.

Partner or supplier selection – how will the project be funded, and whose turbines will you have?

     
  
   Wind Energy Barrier Study  

Wind Energy Barrier Study

As appealing as wind power generation can seem, sometimes there are major barriers which will stop the project. An exporting scheme without connectivity, proximity to housing, very low wind speed and other matters can lead to stopping work.

Our low-cost barrier study is intended to address these and indicate if indeed the project should be stopped without committing to a feasibility study and finding out later.

The study will also indicate the potential scale of generation that is possible.

There are some factors which may provide serious barriers to a scheme and a barrier study is to address these and to inform the client of the development potential that is available.

  1. Examine average wind speed
  2. Review planning issues and land availability
  3. Assess external electrical system strength
  4. Assess aircraft and radar interference potential
  5. Report observations and conclusions

 

     
  
   Wind Energy Feasability Study  

Wind Energy Feasibility Study

A Feasibility Study will identify the economic performance of the scheme and compare the attributes and shortcomings of the options. Key factors in the performance are:

  1. Electrical generation,
  2. ROC values,
  3. Climate Change Levy Exemption,
  4. Wind profile,
  5. Capital cost of wind turbine equipment,
  6. Cost of an electrical connection,
  7. Carbon Trading benefits.

A long-term energy investment is a decision about use of capital and risk. With wind power generation, the risk is reduced because of the multiple income streams that are possible and the inherently free nature of the fuel.

Some of the income streams are significantly determined by Government which has an established policy to underpin electricity generation from renewable sources with fiscal incentives.

The electricity market is hardening and rising prices may be a regular event for many years leading to a resilient income from electricity sales.

The feasibility study will provide sensitivity analyses to the key risks and assist clients to weigh them with respect to investment and planning.

The main elements are:

  1. Location
  2. Identify Options
  3. Electrical Connection
  4. Financial Performance
  5. Sensitivity Analysis
  6. Project realisation.
     
  
   Wind Energy Planning Application  

Wind Energy Planning Application

This note will be of use to companies and individuals who have decided that they have a serious interest in the installation of a single wind turbine or a small wind farm. It is likely that a feasibility study has been carried out to identify the broad wind speeds, the scale of generation and the prospective financial performance of the scheme as an investment, either for the host or for a third-party owner and operator.

A partnership with a third-party at this stage is often both appealing and inhibiting. Appealing because the partner will usually carry all the development costs. Inhibiting because they will also take all the benefits. Typical payments to host companies and landowners range between £4,000 and £6,000 per year. This amount of income rarely excites a corporate business to engage in the development process. There are some businesses – public authorities and small landowners for instance – for whom this is the best option.

There is another draw back to the selection of a partner at an early stage. Quite reasonably, the partner will want to have exclusivity to develop the project for perhaps 3 years. They will then invest in the development, make a planning application etc. However, there is a lot of demand for this type of development and the exclusivity agreement does not usually contain obligations on the partner to actually develop the scheme. They will be able to cherry-pick between schemes for which exclusivity has been agreed, and make progress where it is most effective for them. So an early partnership can remove the ability of the host to make progress at all.

One way to avoid these difficulties is to avoid an early partnership. However, this imposes a management burden on the host who will often feel ill-equipped to develop a specialist project. The skills however, are not complex and Caminus can help.

The first step is to seek out problems for the project. Things that are going to be insurmountable. This can be done by approaching the bodies who will be Statutory Consultees to the planning application. They are all keen to have early discussions, and are all keen to overcome difficulties if there are any. Some have national policies that can be examined for an indication of how their local officers might react.

The most serious early issue will be about the cost of a suitable electrical connection. Some electricity companies offer a free service that will indicate connection and reinforcement costs. Others charge a fee for their first thoughts. Specialists can review the electricity network on the ground and indicate the limitations that specific existing substation equipment and other obvious loads may introduce. Remote locations can bring a high connection cost and a serious barrier.

The next serious issue to consider is the immediate surroundings of the site – perhaps for a 1 km radius. Houses within this area will mean that noise and shadow flicker need special consideration. A planning application will contain a noise survey that predicts the change in noise level at residential properties. As a general guide, 500 – 600m is a sufficient distance. Shadow flicker worries people, but only happens when the sun is low (winter months) for a short period each day. It is common to cease generation for these periods if shadow flicker is an issue.

Interference with nature ranks high on the list of difficulties. However, most of the bodies associated with protection of various species and habitats accept that serious global warming will damage far more flora and fauna that some wind turbines. Quite often, care about construction times and relocation of special habitats can satisfy everyone. Bird strikes are more likely in a location with a high concentration of birds – breeding grounds, migratory routes etc. These are well known and should be researched at an early stage.

Archaeological considerations are another problem that sometimes initiates a blanket request from local authorities for the site to have channels excavated in the search for historical information. This can be avoided by consultation with local historians before making a planning application who may be able to suggest this would be fruitless.

Visual impact will be considered at an early stage, although this is rarely the basis for the rejection of a scheme. Sometimes it may be argued that a wind farm will change the nature of the landscape and this needs to be addressed in the application. Encroachment on the views of individual people needs to be demonstrated clearly, but is not usually a key determinant. Indeed, the public consultation exercise, which usually takes place around the time of a planning application being submitted, regularly produces 80% support from local people.

Landscape impact is more influential and more difficult to be objective about. Most planning authorities have considered their area's suitability for wind turbines and location within a designated suitable area is a major assistance. Multiple churches within 2 km are a problem. Green Belt designations can be accommodated, as can AONB, but these are more complicated.

Proximity to airports or flight paths, especially for military low flying, is a potential problem that can be examined with the relevant bodies. Radar technology is due for a change that reduces the interaction caused by wind farms.

Research of other planning applications is a good way to establish the broad attitude of the planning authority. This will also identify any cumulative impacts which should be addressed.

The second step is to develop this information into a Planning Application. All the factors will be addressed and if the scheme is less than 5MWe capacity, this information should be sufficient for the application to be considered. It is not possible to submit an outline planning application for this type of scheme, because all the information has to be considered together, and planning officers will keep coming back with more questions, or just refuse to validate the application.

The application will cover the main impacts, construction, traffic and decommissioning as well as any special issues raised by the informal consultations with some of the statutory consultees.

The public consultation phase takes place when all the answers to prospective questions are available, usually at the same time as the Planning Application is submitted. This will allow the local councillors to have the application and they will often be able to field questions, dissuading complainants if there is no basis for an objection.

     
  
   Partner or Supplier Selection  

Wind Energy Project Partner or Supplier Selection

There are many ways to convert the planning permission in to a project.

  • Direct investment - buy wind turbines at £1.4m per MWe.
  • Sell planning permission to a developer for a long term annual payment.
  • Non-recourse finance with a specialist investor who knows about wind schemes.
  • Regular lending against the project with some guarantees.
  • Relationship lending from electricity company or equipment supplier.

Each of these methods leaves a different value for the project owner and not all are suitable for everyone.

     
  
 
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