Ahead of an elemental webinar next week, James O’Malley found out how councils can benefit from investing in renewable energy.
It’s not a great time to be a local authority. With budgets tighter than ever, and facing challenges like housing and social care, it might seem like a strange time to throw climate change on top of the pile – but increasingly, renewable energy projects are proving a lucrative investment. But across the country, solar farms and other renewable projects are rising.
“The council decided to invest in a solar farm as a revenue stream, really,” explains Andy Drummond, “There was a window of opportunity when the feed in tariffs kind-of worked.”
Drummond is an elected councillor in West Suffolk, and is the Portfolio Holder for Regulatory and Environment. Back in 2016, he was one of the driving forces behind the creation of Toggam Solar Farm in Lakenheath, which at the time was one of the largest council-owned solar farms in the country.
Additional revenue for local authorities
Today, the 12.4MW capacity solar array is capable of generating enough electricity in one year to power 3000 homes for an entire year. And perhaps more importantly, in just its first five years of operation it generated £6.9m of additional revenue for the council – providing a £2.9m boost to public services.
“It is performing better than expected, so whatever the expected yield, it’s outperformed,” says Drummond, who explains that the council does care about Net Zero, having previously declared a “climate emergency”, but it was the question of how to invest in the aftermath of the 2008 financial crisis that was perhaps what really led to Toggam.
“I actually think it was something as simple as ‘we won’t invest our money in Icelandic banks, so where else could we put it?’,” says Drummond.
And across the country there are similar stories.
“The practice is pretty widespread because most local authorities have declared a climate emergency and though they don’t have a legal obligation to meet net zero, they see it as a critical part of their policy,” says Steve Gummer, a partner at law firm Sharpe Pritchard, who works with local authorities across the country on renewable projects.
“[A] council doesn’t want to be losing money on these projects,” says Gummer, “Longer term, a lot of local authorities are of the view that they will generate revenue.”
Innovative renewable projects
Another early pioneer was Triangle Solar Park in Soham, just a short drive from Toggam, which was developed by Cambridgeshire County Council in 2014. The site, which is arguably more of an irregular pentagon shape, cost just over £12m and covers around 60 acres. Today, it can generate up to 12MW of electricity.
“It provides a range of private electricity to council facilities, in a private wire type of arrangement, and then the rest they sell to the national grid,” explains Gummer.
However, a council generating its own renewables is not without its challenges.
One is that the relative value of renewable investments fluctuates based on the price of energy, into which the price of fossil fuels like oil and gas also factor. This means calculating returns on investment can be hard to predict. But given current global circumstances, this isn’t so much a problem.
“If you’ve got solar PV, that obviously is a good economic thing at the moment because it’s reducing your pull on the national grid and expensive supply charges, because local authorities are like the rest of us – their energy usage and bills are high,” says Gummer.
What else can local authorities do to get renewable energy projects up and running?
“We have a scheme, which is called Solar for Business, where we put solar panels on roofs of factories,” says Drummond.
Under West Suffolk’s Solar for Business scheme, participating companies can install panels on their buildings, and in return receive electricity for significantly – at least 50% below – cheaper than the roughly 34 pence it would cost on the grid. And it is a model that has worked well in other places too.
“The truth is there’s good examples of big shiny projects like the Cambridge Triangle solar farm, and they are really, really good,” says Gummer, “But actually, there’s an awful lot of good stuff being done in the solar PV space just sitting on rooftops.”
He points to Nottingham as a successful example of this approach, which has quietly increased the solar capacity in the city by taking advantage of council-owned properties.
“They’ve got this really big programme rolling out, and that’s great because it not only reduces their electricity bills, but it also reduces their residents’ electricity bills in social housing.”
Towards net zero
So the opportunities are out there for local authorities that want to raise revenues and work towards net zero. And this is why Gummer believes that one other aspect is particularly important to make them happen.
“Local authorities are not particularly good at sharing their best practice,” says Gummer, who says that he’s seen local authorities do some great work, but the process has often relied on an especially dedicated Climate Officer to drive through something like the development of a solar farm.
“They’re not easy projects, they’re quite time consuming. There are specific risks. And a lot of local authorities have done it in different ways,” says Gummer, “I think there is a real opportunity given that local authorities aren’t in competition here. We’re all meant to be pulling in the same direction to share a lot more of that knowledge.”
Our webinar on this topic is free to attend – it takes place at 10am on 28th March. Register here: crowdcast.io/insights/local-authorities-energy-innovation
