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									                                                                 AGENDA ITEM

                 STAFFORDSHIRE MOORLANDS DISTRICT COUNCIL

               REPORT TO RESOURCES OVERVIEW & SCRUTINY PANEL
                               18TH April 2012


      TITLE:                      UPDATE ON CURRENT ENERGY PROJECTS
                                  & THE GREEN DEAL

      PORTFOLIO:                  CLLR ARTHUR FORRESTER,
                                  ENVIRONMENT

      OFFICER:                    MARK FORRESTER COMMUNITIES & CULTURE

      WARDS:               Leek
Attached: Appendix 1: Warm front press release. Appendix 2: Moorlands
House Solar Panel business case - 25 year projections. Appendix 3: Moorlands
House Energy Performance Certificate


1.      Reason for the Report:

        To update members on progress of current energy projects both internally and
        externally and to brief members on the Green Deal

2.      Recommendation

2.1     That the committee considers and comments on the report.

3.      Executive Summary

3.1     A number of internal and community based projects are being delivered
        across Staffordshire Moorlands and these are briefly outlined in the report

3.2     Assisting householders and community groups to manage the rising cost of
        domestic energy and achieve affordable warmth continues to be a challenge.
        The council is working closely with Apex Carbon solutions to provide residents
        and community groups with energy efficiency measures to reduce energy
        costs and carbon emissions.

3.3     In view of the introduction of the Green Deal it is critical that Local Authorities
        determine exactly what their role should be. The council is currently taking
        advantage of free consultancy support from National Energy Action. The
        Green Deal and Affordable Warmth Practical Assistance program has been
        funded by the Department of Energy and Climate Change to assist local
        authorities in making the transition to using the Green Deal & Energy
        Company Obligation to assist households that are in or at risk of fuel poverty.

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4.    How this report links to Corporate Priorities

4.1   Protecting and improving the environment and the efficient use of resources
      are aims of the Council.

5.    Options and Analysis

5.1   Energy Efficiency and Renewable Energy Projects within the Council

      Energy Management
      Last year the Sustainability Officer carried out a monitoring exercise on the
      energy bills across the Alliance. The objectives of this piece of work was to
      eliminate payment of estimated bills, create a unified system – combining
      management data for gas/electricity/water for each building into one database
      to develop a smoother internal processing and authorisation system for
      payment. Recording of resource information i.e. streamlining roles and
      responsibilities and finally, to improve future budget forecasting for these
      resources.

      This piece of work has enabled property services to manage the payment of
      energy bills and to significantly reduce the amount of bills paid on estimated
      charges. Having a clear baseline of expenditure/usage of energy will allow us
      to better identify and implement energy efficiency measures across the
      Council buildings.

5.2   Feed in Tariffs
      In April 2010, the Government launched a feed in tariff (FIT) to incentivise
      householders and organisations to invest in small scale electricity generating
      renewable energy systems such as wind turbines or photovoltaic panels (PVs).

      On 7th June 2011 the Cabinet received a report setting out the business case
      for the installation of P.V’s on Moorlands House. A net income of £68,455 was
      projected over a 25 year period and on this basis Cabinet gave approval for
      the Environmental Policy Officer to seek tenders for the project.

      Progress on the tenders was delayed by an initial assessment which
      questioned the load bearing capacity of the roof at Moorlands House. The
      Council was advised to seek a full survey at a potential cost of £2,000. Efforts
      to have the survey undertaken at no cost were not successful.

      The Government has now also announced its intention to significantly reduce
      the feed in tariffs. The comprehensive review was announced in October 2011
      and the response was published on the 9 th February 2012. The new tariff
      payable to the type of scheme considered for Moorlands House will be
      reduced by over 50% which brings into question the viability of the original
      business case.

      Based on the new quote for installation and the new tariff would reduce the
      potential net income over 25 years to £26,695 which represents a small return
      for the risk involved over a lengthy period.

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      Pressing ahead with the project at this time is not recommended due to the
      scale of risk and potentially small financial return.

5.3   Renewable Heat Incentive
      The Renewable Heat Incentive is a fixed payment for the renewable heat you
      generate yourself. After some initial delays phase 1 was launched on the 28 th
      November 2011 and covers all non-domestic installations including the public
      sector; not-for-profit organisations and communities.
      The Renewable Heat Incentive is similar to the Feed-in Tariffs, the scheme for
      electricity which went live in April 2010. While the Renewable Heat Incentive is
      similar to the Feed-In Tariffs, there are some important differences, and in
      particular:
         It will be paid for by the Treasury not by energy users.
         There is no ‘National Grid for Heat’ and so importing and exporting heat is
          not relevant.
         It will be introduced in phases, with residential schemes not eligible until
          Phase 2. Following the delay to the non-domestic scheme, DECC are re-
          evaluating the timing for the domestic one. The previous position was that
          there would be a consultation by the end of 2011, with implementation
          October 2012 alongside the Green Deal. The consultation hasn't been
          released yet, so if that doesn’t rule out October 2012 implementation, it
          certainly makes it less likely. DECC plan to make an announcement on
          their timeline early in 2012.

5.4   Community based projects.

      Warmstreets
      The council’s loft and cavity wall insulation scheme has been running for just
      under 12 months and has so far had a successful first year of installations in
      Staffordshire Moorlands with over 200 measures installed in domestic
      properties saving residents over £23,000 on their heating bills and saving over
      123 tonnes of carbon.

5.5   Warmfront
      Early in 2012 Consumer Focus and National Energy Action warned that the
      Government's flagship scheme to help the poorest households to make their
      homes warmer and cut their energy bills, is set for up to a £30 million
      underspend this year. This means many older people, families and people
      with long-term health problems will miss out on much-needed help.
      This money could help up to 16,000 households struggling to afford their
      energy bills to cut their costs by a potential £650 per year.
      Warm Front has seen a dramatic decline in applications for help last year. In
      April to December 2011 less than 40,000 people applied for a Warm Front
      grant compared to over 130,000 applications in the same period in 2010. The
      scheme was oversubscribed in 2010 but the funding was cut by almost two
      thirds.

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      Increased promotion of the scheme at a national and local level has seen
      figures rise over the last 3 months. A recent Warmfront press release
      highlighted that the West Midlands has seen the highest increase in
      applications for the grant across England. Weekly applications have more than
      tripled since December, rising to 461applications per week in February, up
      from 126 per week in December. (Appendix 1.)

5.6    Green Deal
      Green Deal - Introduced to Parliament in Dec 2010 (via the Energy Bill) the
      Green Deal will establish a new market for energy efficiency measures from
      2012, at the heart of which will be a new Green Deal financing mechanism.
      Through a bespoke ‘Green Deal Plan’, private firms will be able to offer
      consumers energy efficiency improvements to their homes, community spaces
      and businesses at no upfront cost, and recoup payments through a charge in
      installments on their electricity bill (including interest payments).

      In view of the introduction of the Green Deal it is critical that Local Authorities
      determine exactly what their role should be. On behalf of the LAEP officers of
      the Council applied for free consultancy support from National Energy Action
      Support. The Green Deal and Affordable Warmth Practical Assistance
      program has been funded by the Department of Energy and Climate Change
      to assist local authorities in making the transition to using the Green Deal &
      Energy Company Obligation to assist households that are in or at risk of fuel
      poverty.

      Project Outcomes Local authorities are enabled to access advice and
      guidance on the development of Green Deal/ECO in their local areas. Key
      local stakeholders have improved knowledge and understanding of how to
      engage with Green Deal & ECO. Local authorities and their partners are
      enabled to access support and guidance on maintaining commitment to fuel
      poverty objectives during the transition to Green Deal and ECO.

      This NEA support project will be completed by the end of March 2012 after
      which the steering group will continue with the work programme and engage
      all partners in an approach to addressing fuel poverty in low income and
      vulnerable homes through the Green Deal and ECO. The first green deals are
      expected to be launched around October 2012.


6.    Implications

      6.1   Community Safety - (Crime and Disorder Act 1998)
            None

      6.2   Workforce
            None

      6.3   Equality and Diversity/Equality Impact Assessment
            There are no equality issues identified as applicable.



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      6.4   Financial Considerations
            Please see Appendix 2

      6.5   Legal
            No issues

      6.6   Sustainability
            The projects would assist the Council to achieve its environmental
            objectives.

      6.7   Internal and External Consultation
            No consultation requirements identified


      6.8   Risk Assessment
            None




7.    Background and Detail

7.1   In April 2010, the Government launched a feed in tariff (FIT) to incentivise
      householders and organisations to invest in small-scale electricity generating
      renewable energy systems such as wind turbines or photovoltaic panels
      (PVs). As part of the Council’s Transformation projects for income generation
      and energy efficiency work was undertaken to establish costs and identify
      suitable buildings where appropriate technologies may be installed. A
      commitment was given at a meeting of the full Council on 11th December 2010
      to develop a business case for investing in renewable energy technology on
      council buildings.

7.2   The feed in tariff rewards investors in renewable energy systems with different
      tariffs depending upon the scale of electricity generated. The rates at which
      tariff payments are made were attached to the year that you join the scheme
      and are linked to the RPI throughout the tariff lifetime.

7.3   On 7th June 2011 Cabinet received a report setting out the business case for
      the installation of (PVs) on Moorlands House. A net income of £68,455 was
      projected over a 25 year period and on this basis Cabinet gave approval for
      the Environmental Policy Officer to seek tenders for the project.

7.4   Initial progress on the tenders was delayed by an initial assessment which
      questioned the load baring capacity of the roof at Moorlands House. The
      Council was advised to seek a full survey at a potential cost of £2,000. Efforts
      to have the survey undertaken at no cost were not successful.

7.5   The Government has now also announced its intention to significantly reduce
      the Feed in Tariffs. From 3rd March 2012 the tariff payable to the type of
      scheme considered for Moorlands House would be reduced by over 50%
      which brings into question the viability of the original business case.

                                          5
                                     Old (pre 12 December      New (post 12 December
       Band (kW)
                                      2011) tariff (p/kWh)       2011) tariff (p/kWh)


       <4kW (new build)            37.8                       21.0


       <4kW (retrofit)             43.3                       21.0


       >4-10kW                     37.8                       16.8


       >10-50kW                    32.9                       15.2


7.6   The new tariffs and based on the 9.36kWp array we have been quoted for, the
      new tariffs would be 16.8p/kWh instead of 37.8p/kWh. Making the repayment
      period of any loan or costs longer and considerably reducing the return on
      investment.

7.7   The initial quote from 2010 is now out of date so a new quote has been gained
      based on the same model. The overall instalment cost has dropped from
      £31,084 to £23,675.

7.8   Using the new quote and the new tariff levels the potential net income over 25
      years is now £26,695 which again would represent a very small return for the
      risk involved. (Appendix 2)

7.9   From 1 April 2012, as a pre-requisite of eligibility for the standard solar PV
      tariffs any new F.I.T’s applications for solar PV will need to demonstrate that
      the building to which the solar PV installation is attached or wired to provide
      electricity has an Energy Performance Certificate rating of Level D or
      above." Moorlands House currently has an EPC rating of level E. This will
      require further investment in the building to bring it up to the required energy
      efficiency level to be eligible for Solar PV tariffs. (Appendix 3)

7.10 Based on the proposed model for Moorlands House the lifetime carbon
     savings achieved would be 86 tonnes. In terms of carbon savings this figure is
     minimal compared to other schemes. For example the Warmstreets insulation
     scheme has saved just over 123 tonnes of carbon across Staffordshire
     Moorlands in one year.

8.    Current Projects

      Warmstreets has had a successful first year of installations in the Moorlands
      with over 200 measures installed in domestic properties saving residents over
      £23,000 on their heating bills and saving over 123 tonnes of carbon.

      In September 2011 the Nottinghamshire & Derbyshire Local Authority Energy
      Partnership developed a regional approach to providing Loft and Cavity Wall
      Insulation. 11 authorities (including Staffordshire Moorlands in partnership with

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     High Peak) across the area signed up to the new scheme which enables
     residents to access some of the most competitively priced installations in the
     country. To complement the new pricing structure Warmstreets can now also
     offer residents help, advice and funding schemes for solid wall insulation,
     renewable technologies and replacement boilers until the schemes closure at
     the end of 2012.

     Green Deal - Introduced to Parliament in Dec 2010 (via the Energy Bill) the
     Green Deal will establish a new market for energy efficiency measures from
     2012, at the heart of which will be a new Green Deal financing mechanism.
     Through a bespoke ‘Green Deal Plan’, private firms will be able to offer
     consumers energy efficiency improvements to their homes, community spaces
     and businesses at no upfront cost, and recoup payments through a charge in
     installments on their electricity bill (including interest payments).

     In view of the introduction of the Green Deal it is critical that Local Authorities
     determine exactly what their role should be. On behalf of the LAEP officers at
     High Peak Borough Council applied for free consultancy support from National
     Energy Action Support. The Green Deal and Affordable Warmth Practical
     Assistance program has been funded by the Department of Energy and
     Climate Change to assist local authorities in making the transition to using the
     Green Deal & Energy Company Obligation to assist households that are in or
     at risk of fuel poverty

     Project Outcomes: Local authorities are enabled to access advice and
     guidance on development of Green Deal/ECO in their local areas. Key local
     stakeholders have improved knowledge and understanding of how to engage
     with Green Deal & ECO. Local authorities and their partners are enabled to
     access support and guidance on maintaining commitment to fuel poverty
     objectives during the transition to Green Deal and ECO.

     This NEA support project will be completed by the end of March 2012 after
     which the steering group will continue with the work programme and engage
     all partners in an approach to addressing fuel poverty in low income and
     vulnerable homes through the Green Deal and ECO. The first green deals are
     expected to be launched around October 2012.


                                   Dai Larner
                                Executive Director


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