First steps taken into ownership of renewable energy with investment into one of UK’s most advanced battery energy storage facilities
The Council, in partnership with Somerset-based Opium Power Limited, is to build a new 25MW Battery Storage facility that will provide essential power management assistance to the National Grid. It will be one of the largest and most-advanced in the UK.
It is part of the Council's new vision of creating more income generation opportunities, using our resources to make investments which provide a better return so we can inject more money into the services we deliver for our communities. Our strategy is to protect and improve core services, deliver public priorities and act in the best long-term interests of the district.
By investing in battery energy storage, the Council is taking its first exciting step into ownership and development of renewable energy which will provide essential support to the National Grid for balancing power demand and storing renewable energy that would otherwise be wasted.
The idea of battery energy storage is simple - batteries store excess energy production at low usage periods, that would otherwise be wasted, and resupply it to the grid when needed at peak times.
The facility being created will provide 25MW of instantly available electrical power on demand to the National Grid. This will be used to balance out fluctuating demands on the local Somerset power grid. Peaks and troughs in demand cause under and over supply if not correctly managed - this can result in power spikes or blackouts.
The project will not only assist the Council's income generation needs and contribute towards the objectives of our commercial strategy, it also meets our Council Plan objectives and commitment to promote the use of green technology. It will also aid development in the region in the future by removing some of the electricity supply constraints which can be a barrier to further investment.
South Somerset District Council Leader Ric Pallister said: "This project is just what we want our commercial strategy to deliver. Our team has worked incredibly hard to secure an exciting investment which will not only help the environment, but also provide invaluable revenue to help protect and strengthen vital services for our communities."
Henry Hobhouse, South Somerset District Council's portfolio holder for property and income generation, said: "Here's a superb example of where our commercial strategy can take us - working with key partners to invest in green technology that will be of lasting national benefit.
"As well as finding significant efficiency savings, the Council is committed to protecting front line services and meeting its ambition to improve life in South Somerset. To achieve that aim we are being more commercial in our approach and making investments that will deliver valuable income. We also take our role in caring for the environment seriously. We are committed to doing all we can to promote the efficient use of energy resources."
South Somerset District Council is the investor and co-owner of the facility, Opium Power Limited will be the project manager and co-owner, BYD Europe BV will be the battery supplier and BSR Connect is the project roll out connection contractor. Western Power Distribution will be the local distribution network operator.
All of our project partners are incredibly excited about the opportunity.
Jason Dobson of Opium Power Limited said: "Opium Power is very excited to be working in partnership with South Somerset District Council to assist in protecting the local area against power issues and also providing additional revenues that will help protect local services in the community."
Simon Roberts, Managing Director of BSR Connect, said: "BSR Connect is really pleased to be the Independent Connections Provider (ICP) working with South Somerset District Council and Opium Power Ltd on the 33kV connection of their new Energy Storage Project."
Jerome Qi, European Director of Sales for BYD Europe BV, said: "BYD have been supporting large scale projects in the UK for a number of years including more recently providing the electric buses in London and we look forward to working in partnership with South Somerset District Council and Opium Power."
Question & Answers about the exciting investment:
Q. How significant will this operation be?
A. This facility is extremely significant as it represents one of the larger battery storage facilities in the country. The site can produce 25MW of power for the grid for one hour's duration which is the equivalent to powering over 30,000 homes. This is only phase one of the project. There may be a further phase to follow which could increase the capacity of the facility.
Q. What will the return for the investment be?
A. This investment was carried out within the approved governance of our commercial strategy. The minimum return on investment after repaying the loan and interest is 7.5%. We anticipate an Internal Rate of Return of c14% on the same basis based upon current cashflow forecasts for the battery energy storage facility.
Q. Where will this be built?
A. For site security reasons, the exact location of the Somerset site cannot be disclosed but revenue generation provided by a battery storage facility is highly dependent on being located near an appropriate substation that has the correct capacity requirements. This site is in a position only 75 meters from a major grid substation. It already had an approved grid connection and being so close to a connection point is highly unusual. This therefore represents a major reduction in setup and development costs. In addition, the site came with all the necessary consents and was ready to develop immediately with aim of being fully operational by the end of 2018.
Q. Who's involved and who will operate the site?
A. Opium Power Limited will operate the site utilising the services of its technology partners BYD, MSF Technologies, Kiwi Power and BSR Connect.
Q. Is it environmentally friendly?
A. Absolutely, a significant proportion of electricity generated from solar and wind is wasted because during windy and sunny periods there can be a large oversupply and there is no ability to store this energy. By storing excess energy in batteries, it can be resupplied to the grid when required.