Next steps to expand existing renewable energy investment are announced
South Somerset District Council’s second Battery Energy Storage Site (BESS) investment project near Fareham in Hampshire is to be expanded.
A second phase of work has just been announced which will increase the capacity of the currently 40MW site to 60MW when completed. It will have double the capacity of our first BESS site near Taunton which has been successfully operational since late last year and will be one of the most technologically-advanced sites of its type in the UK.
South Somerset District Council is the investor and co-owner of the Fareham facility, Opium Power Limited will be the development manager and co-owner, BSR EPC is the project roll out connection contractor. SSE will be the local distribution network operator.
John Clark, South Somerset District Council's portfolio holder for economy and income generation, said: “Our partnership goes from strength to strength having successfully completed the Taunton BESS project, we are now leading the way nationally as an experienced council in this field of advanced technology by taking on another project with experience and confidence.
"With the risk reduced from our experiences to date and the first phase of Fareham well underway, on time and in budget, we can be confident that the second phase which will follow straight on from the first will generate a very good return to help us fund and retain vital services.”
Part of the BESS site near Taunton
In light of Covid-19 the council has taken a full review of its priorities and environment strategy as part of its own economic and environmental recovery plan. This is to help the country build back better and consider its future sustainability and that of the wider UK.
Part of this review saw the council decide to invest further in renewable energy to remain at the cutting edge of renewable energy storage and fully demonstrate its commitment to its environmental goals.
Sarah Dyke, South Somerset District Council's portfolio holder for environment, said: "The Council remains focused on 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, while also taking our role in caring for the environment seriously.
“We are committed to doing all we can to promote the efficient use of energy resources locally and UK wide. Investing in another phase of Battery Energy Storage at Fareham demonstrates our priorities alongside aiding the UK infrastructure to make better use of clean energy."
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 council has previously announced that it wanted to respond positively to the recognised Climate Emergency wherever possible. The new investment is another demonstration of the Council's ongoing vision of creating more income generation opportunities, whilst improving the Environment is also a thread that runs through all matters that it considers.
The council is using its resources to make investments which provide a better return than the traditional property investments, so we can inject more money into the services we deliver for our communities. Our strategy is to protect and improve core services, improve the environment, deliver public priorities and act in the best long-term interests of the district.
By investing further in battery energy storage, the Council is taking its next steps as a growing leader in this UK industry of owning and developing renewable energy, which will provide essential support to the National Grid for balancing UK power demand and storing renewable energy that would otherwise be wasted.
The new facility being created near Fareham will provide 60MW of instantly available electrical power on demand to the National Grid. This will be used to balance out fluctuating demands on the 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, but meets our Council Plan objectives and commitment to the environment 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 Val Keitch said: "This second phase of the Fareham project builds on our experience and expertise, helps our environment and delivers commercial income, which is just what we want our environmental and commercial strategy to deliver.
“Our team has worked incredibly hard to maximise development of our first site near Taunton and to secure this exciting second phase at Fareham for development and investment to create a BESS twice the size of Taunton is fantastic news. It will not only help the wider environment, but also provide invaluable revenue to help protect and strengthen vital services for our communities in South Somerset."
David Owen of Opium Power Limited said: "Opium Power is very excited to be working in partnership again with South Somerset District Council to develop and maximise the Fareham BESS to 60MW in the next two years.
“The Government has passed laws to end its contribution to global warming by 2050. Its Net Carbon Zero target will require the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least 80% reduction from 1990 levels. This, by default, requires a sustainably powered grid. Battery storage is required to stabilise and manage renewable energy generation.
“This system will also be providing additional revenues that will help protect local services in the community."
Tim Humpage, Managing Director of BSR Group, said: “BSR Group are very pleased to be selected to design, build and connect this additional 20MW in addition to the new 40MW Energy Storage Project already underway, on behalf of SSDC Opium Power Ltd.
“Our appointment consolidates the close working relationship formed with SSDC Opium Power on the completion of the Fideoak BESS project.
Questions & Answers:
How significant will this operation be?
This facility is extremely significant as it represents one of the larger battery storage facilities in the country. The two phases of the site will ultimately produce 60MW of power for the grid for one hour's duration. It will provide essential balancing and network management services to the grid. The grid has a specific need for these services because it is transforming itself into a sustainable grid powered by renewables.
What will the return for the investment be?
This investment was carried out within the approved governance of our commercial strategy. The minimum return on investment after SSDC’s finance loan is repaid with 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.
Where will this be built?
The location is close to Fareham in Hampshire. 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 already had an approved grid connection and is close to a connection point. 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.
Who's involved and who will develop/operate the site?
Opium Power Limited will manage the development of the site utilising the services of its technology partner, BSR EPC.
Who manages SSDC OPL Ltd, the joint venture company that the council is investing in?
The council jointly owns the company SSDC OPL Ltd with Opium Power Ltd, that was set up to trade in energy. The Board of Directors comprises 5 members. 2 senior SSDC officers, (one of which is Chairperson for the company), 2 Directors from Opium Power Ltd and an independent industry professional. The Shareholders have the right under reserved matters to make and change these appointments at their AGM, with SSDC having the casting vote and overall financial control of the company.
Is it environmentally friendly?
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.