Agenda item

(1)          The Chairman welcomed Ms Karpetas to the meeting and thanked her for participating in the Select Committee process.

 

(2)          Ms Karpetas introduced herself as the Director of Community Energy South, which is an association of community energy groups across the Southeast of England which aims to support the transition to a distributed renewable energy network.

 

(3)          Sustainability Connections seeks to support sustainable renovation, energy efficiency and community owned renewable energy through sharing expertise and sourcing alternative financing.

 

Question:  How can community energy schemes help in Kent?

 

(4)          Ms Karpetas explained that these schemes were helping to reduce energy demand by improving consumer awareness, reducing personal costs and encouraging the conversion of existing housing stock to include more energy efficient facilities.  She commented that the resulting retrofitting required to bring older housing stock up to efficiency standards had knock on economic benefits by creating employment and opportunity.  These projects could hopefully include renewable energy generation on people’s homes (e.g. solar panels).

 

(5)          Ms Karpetas explained that there were challenges at present in light of the significant reduction in subsidies that we still needed for renewables projects given the high cost of technology.  While it was expected that the technology cost will drop over time as it becomes more mainstream, subsidies were still required.  An eventual reduction in technology costs would help promote the spread of community owned renewable energy farms.

 

(6)          Orchard Solar Farm at Iwade had accelerated the share offer in order to benefit from community investment tax relief for shareholders: 50% tax relief (SEIS) for investment in start-up costs and and 30% tax relief for project delivery. This tax relief was removed on November 30, 2015. The plans were to provide a 7% return on investment with £1m going into the community pot and potential for this to rise to £3m.  The farm is now examining the process of selling energy directly to the community rather to the grid, with a plan for it to have its own tariff by April 2016.

 

Question:  How can KCC help the situation following cuts to subsidies?

 

(7)          Ms Karpetas explained that the cut in subsidies, both in the Feed-in-tariff reduction and removal of social investment tax relief, had been sudden and significant. The project had always taken a long term view with alternative business models consistently being reviewed to ensure sustainability when circumstances changed.  Given the long term basis of renewables development, Ms Karpetas recommended that KCC consider the longer term view, show patience and maintain its commitment to energy efficiency.

 

(8)          This longer term and less reactionary approach was evidenced by the initial fierce opposition from Bobbing and Iwade Parish Council when the Solar Farm was being developed.  When the local community believed the project was a private development, opposition was very strong but once it was made clear that it was a community based project with local benefits over time, challenge to the scheme dropped significantly.  KCC’s support in promoting the local benefit of these schemes would assist in the future of such community projects.

 

Question:  How are shares managed?

 

(9)          Ms Karpetas explained that the price for share purchase was £250 for local investment and £500 for others.  An issue had arisen as a side effect of the subsidy reduction as it has meant looking to raise a greater amount of finance from institutional investors, including banks. With lenders wishing to have their repayments first, there is a knock-on effect on the level of the community fund, which is not only reduced, but also has a delay of several years before it begins to materialise.

 

Ms Karpetas explained that the programme was now looking at running a second  community share offer, opening up to a wider market while maintaining the community focus.

 

Question:  Please provide an overview of how return on investment (ROI) changes over time and what evidence there was of sustainability?

 

Ms Karpetas explained that the Mongoose Company set up Iwade and had since moved on to buying up private solar farms where the feed-in tariff at the higher rate had been locked –in (providing some protection of ROI) – and bringing these farms into community ownership.

 

(10)       There were several opportunities present for similar investment in Kent with attractive returns combined with the beneficial elements of community ownership.  The combination should be helpful to businesses and encourage local support, making initial development run more smoothly and promoting long term returns.

 

Question:  Could KCC pay in or buy shares in the programme?

 

(11)       Ms Karpetas explained the previous set up finances, in that Triodus Banks supported the set up with a 2.5% arrangement fee and 7-8% interest while Mongoose charged 1% for the set up process.

 

(12)       Ms Karpetas advised the Committee that KCC could invest as it was an attractive investment opportunity that would benefit from long term funding security via local authority backing, which would also show KCC’s commitment to supporting such energy programmes.  Additionally, Ms Karpetas suggested various options for managing longer term financial management approaches such as including energy tariffs within council tax that would be used to support energy sustainability, promote local generation and reduce reliance on National Grid.

 

Question:  What are your views on Biomass processes?

 

(13)       Ms Karpetas explained that there were many positives including strong financial incentives for development as well as the practical evidence of good use. One such project, in which KCC was a partner, along with the Forestry Commission, was looking at privately owned woodland, mapping which schools were off the gas grid, and looking to replace oil-powered boilers with wood burning boilers. The programme also included apprenticeships in forestry management, creating employment and ensuring security of supply of wood. There are also good examples of anaerobic digestion energy generation (food waste being used as an energy source).  However, it was noted that organising the most efficient and effective use of waste for this purpose was difficult to achieve given the need to link so many agencies and private companies.

 

Question:  Despite the benefits of renewable energy sourcing, what is the long term viability of small community projects such as Iwade Solar Farm?

 

(14)       Ms Karpetas explained that the grass roots engagement processes inherent in such local schemes were vital to embedding the concept of community ownership and responsible energy use.  The schemes help reduce demand though education of consumers and encourage more and more small scale personal energy generation.

 

(15)       Ms Karpetas clarified that the company was based on a Social Enterprise Model and was not a charity so had numerous funding streams and was not overly reliant on subsidies, having developed long term business plans that considered the changeable funding landscape.

 

Question:  Will people get better or cheaper electricity as a result of similar projects?

 

(16)       Ms Karpetas explained that historically the take up retrofit programmes and similar green initiatives was low and that this had been due to the initial Green Deal being flawed, despite its positive intent and good ideas.

 

(17)       The current approach for her project is more financially sound with a longer term outlook on investment return, meaning better electricity sourcing and generation which will result in savings to individuals and help encourage reduced usage.

 

Question:  How to discuss complex arguments around supply and demand, environmental impact etc. with the general public?

 

(18)       Ms Karpetas explained that the progress had been made since the greater emphasis on switching providers, encouraging consumers to take more interest in their electricity supply and their own usage.  By learning more about their supply options, consumers were giving power usage issues more thought.

 

(19)       Additionally, the project has supported training for a growing range of people on the impact of power use and the complexities of energy supply.  This has helped people manage their own usage.  Further work on communication and training on these issues is planned with Lottery Funding being sourced.

 

Question:  How can KCC educate people on these issues?

 

(20)       Ms Karpetas advised the Committee that KCC should use the Council’s local knowledge to focus on key demographic groups where education and communication work would be most beneficial, emphasising personal responsibility and promoting its own carbon reduction goals.

 

Several Kent based District Councils have already done good work in the same vein, including Dover, Swale and Tonbridge & Malling.  Annual reports from each District Council shows mixed level of buy-in so more KCC support to promote similar work would help.

 

Question:  How to improve education of energy use at school level?

 

(21)       Ms Karpetas advised that the issues should be addressed in core science education in terms of the technical aspects of energy generation and its implications but also recommended subjects such citizenship and politics could also help promote personal responsibility and an understanding of the broader considerations.

 

Question:  How can planning issues related to sustainable developments be addressed?

 

(22)       Ms Karpetas advised that there were pockets of good practice, including the Kent Design Guide, but noted that environmentally friendly developments were not always publicised and celebrated as much as they could be.  She suggested that this might be an area in which Members could assist.

 

(23)       Planning is a feature of all developments and the onus is on developers to take a longer term view as often there is a short term economic argument used at the planning stages to justify development.

 

(24)       Members commented that while District Councils were responsible for housing planning, it would be worth promoting the idea of renewable generation and usage reduction elements being mandatory on all new builds.  Members noted that without policy change or new legislation, control and focus on profits would remain with the developers, limiting the role of government in promoting a more long term development approach.

 

Question:  Will renewables bring down energy prices for individuals?

 

(25)       Ms Karpetas explained that renewable energy schemes in their current format would not reduce prices by themselves but had an important role to play in a wider shift in energy generation and sourcing.  To achieve improvements, a cohesive and strategic approach was required including several options for energy distribution, generation and storage.

 

(26)       Smart metering was a good step toward helping consumers manage their usage which could result in savings through appropriate energy use reduction.

 

Question:  What training and employment does renewable energy bring to or make available in Kent?

 

(27)       Ms Karpetas explained that Energy Champions are already in place and are qualified to promote responsible energy use.  This is a City & Guilds Level 1 qualification.

 

(28)       Employment is generated by the work being undertaken to support the Smart Meter implementation and retrofitting projects around the County.  With retrofit the most immediate and logical step, renewables installation will flow more logically. Both retrofit and renewable energy combined present a large field that involves numerous professions so a growth in the industry would be good for employment.

 

Question:  Is there anything else that can or should be done?

 

(29)       Mr Karpetas advised the Committee that more work should be done to push for greater collaboration between the renewables work and business.  She noted the work already done by KCC to support Small / Medium Enterprises and recommended that this continued.

 

(30)       Ms Karpetas advised KCC to continue to work with Central Government and challenge it where appropriate to ensure continued support for renewable energy.  She also advised that KCC should consider investing directly in suitable renewable energy and community owned projects.

 

(31)       The Chairman thanked Ms Karpetas for her contribution to the work of the Select Committee.