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Devon County Council – working together to tackle carbon emissions and climate change

Local authorities across the country have been focusing on finding innovative ways to tackle carbon emissions and climate change, with many looking at how to invest in renewable energy and storage. Alastair Mumford, ADEPT Member, talks about how Devon County Council has been exploring how to stimulate the community energy sector and support local generation.

Devon County Council (DCC) has cut its carbon footprint in half and is ahead of schedule in its commitment to become a net-zero authority by 2030. These carbon reductions are being achieved through various projects – one example is that we have converted all our streetlighting to low-emission LED lighting,

It is expected that DCC will need to offset 12,500 tonnes of carbon, based on today’s price of carbon this will cost £312,500 per year. In addition, we are required to secure at least 30% of our total energy supply from renewable energy sources by 2030.

It’s a big challenge and we are developing a number of projects and ideas to help achieve these aims. One of the key projects is our work with the Devon Energy Collective (DEC), which comprises a number of community energy groups across the county. The collective work together on larger scale energy projects with the aim of benefiting the local community – they are working to develop, finance and own a number of renewable energy projects in Devon.

One of our main projects in the pipeline with DEC has been around building an energy generation site or sites. The idea is that if the council can guarantee the strike price – which is the amount DEC would get for its energy – for seven years, the collective could secure finance and build a generation site or sites.

We, therefore, began looking at entering into a Synthetic Power Purchase Agreement (SPPA) with DEC. The SPPA provides a long-term contract between generator and third party acting as a financial backer.

An SPPA enables the generator to guarantee the price they will get for the energy produced. The third party agrees a ‘strike price’ with the generator, essentially the minimum price the generator needs to make the commercials works. The generator annually goes to the wholesale energy market and obtains a price for the energy produced. If that price is below the strike price the third-party tops up: if it’s above the strike price the surplus goes to the third party.

The generation site cannot be built without DCC involvement, so is classed as ‘additional’ and with the generator passing on the Renewable Energy Guarantee of Origin certificates (REGOs) to DCC – the third-party – they can claim the carbon offsets.

In addition, an SPPA is considered a ‘financial instrument’, so procurement is not required.

Although the project is a work in progress, it is an exciting concept and one that has many benefits. Using BEIS forecast energy pricing data, we concluded that the outcomes would range between cost neutral and an annual saving of £37,000 to DCC, with cost-neutral being the most likely.

Securing locally generated, renewable energy would provide a number of benefits: it means there is a greater efficiency of supply (fewer losses from distance travelled over the national grid), it would secure local, community-owned energy, and would provide cost-effective carbon offsetting. It would allow community groups to get financial backing, helping to get the scheme off the ground.

Having a renewable energy sited in Devon and owned by the community also provides significant socio-economic benefits. Research has shown that using a community organisation rather than a commercial provider would generate an additional £15.27m in economic value for the Devon economy. Profits would have to be reinvested into community carbon-saving projects. There are risks, associated with pricing if the wholesale market crashes – however, if this happened the retail price would also go down so some of the negative impacts can be mitigated.

Working with the South West Energy Hub, we hope to publish a toolkit later this year so other organisations can look to develop their own SPPA project.

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