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Carsphairn Community Energy Storage Scheme

Feasibility Study Report

March 2017 Client Name: Carsphairn Community Council Site Address: Carsphairn

Author: Scott Bennett, Assistant Land Agent

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Document history

Author Scott Bennett 15/03/2017 Checked Andy Precious 23/03/2017 Approved Euan Hutchison 27/03/2017

Client Details Contact Sylvia Sinclair Client Name Carsphairn Community Council Address Carsphairn, and Galloway,

Issue Date Revision Details A 28/03/2017 Frist Revision

NATURAL POWER CONSULTANTS LIMITED, THE NATURAL POWER CONSULTANTS LIMITED, NATURAL POWER SARL, NATURAL POWER CONSULTANTS (IRELAND) LIMITED, NATURAL POWER LLC, NATURAL POWER S.A, NATURAL POWER SERVICES LIMITED AND NATURAL POWER OPERATIONS LIMITED (collectively referred to as “NATURAL POWER”) accept no responsibility or liability for any use which is made of this document other than by the Client for the purpose for which it was originally commissioned and prepared. The Client shall treat all information in the document as confidential. No representation is made regarding the completeness, methodology or current status of any material referred to in this document. All facts and figures are correct at time of print. All rights reserved. VENTOS® is a registered trademark of NATURAL POWER. Melogale™, WindCentre™, ControlCentre™, ForeSite™, vuWind™, WindManager™ and OceanPod™ are trademarks of NATURAL POWER.

Copyright © 2017 NATURAL POWER.

Local Office: Registered Office:

The Green House, Forrest Estate The Natural Power Consultants Limited Dalry, Castle Douglas, DG7 3XS The Green House SCOTLAND, UK Forrest Estate, Dalry, Tel: +44 (0) 1644 430 008 Castle Douglas, , DG7 3XS

Reg No: SC177881 VAT No: GB 243 6926 48

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Contents

1. Introduction ...... 1 2. Report Structure ...... 2 3. Feasibility ...... 3 3.1. Why Energy Storage? ...... 3 4. Carsphairn Community Council Aims ...... 4 4.1. Agreed Aims...... 4 4.2. Community Meeting and Survey ...... 4 4.2.1. Survey Results ...... 4 5. Central Battery Option ...... 5 5.1. Central Method...... 5 5.2. Central Costs ...... 7 5.3. Central Revenue ...... 8 5.4. Central Battery Risks ...... 9 5.5. Central Recommendation ...... 9 6. Decentralized ...... 10 6.1. Decentralized Method ...... 10 6.2. Decentralized Costs ...... 11 6.3. Decentralized Revenue ...... 12 6.4. Decentralized with Solar Panels ...... 13 6.5. Decentralized Financial Model ...... 14 6.5.1. Financial model inputs assumptions ...... 14 6.6. Decentralized Risks ...... 16 6.7. Decentralized Recommendation ...... 16 7. Next Steps ...... 16 8. Grant Application ...... 16

Appendices ...... 18 A. Local Energy Scotland Grant Application 18 B. Residents Letter and Questionnaire 19 C. Ofgem – Feed In Tariff Domestic Solar 20 D. Domestic Financial Models 21

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1. Introduction With the expected growth of Carsphairn’s community benefits fund, the community council wished to consider potential projects which would bring long term benefits to the community as a whole. This goal was document through the Carsphairn Community Future Plan (March 2016) were Renewable Energy Schemes, Economic Sustainability and Community Ownership were considered priorities by the community. Further to discussions with Natural Power a community meeting was held where the idea of energy storage was introduced. Two options were discussed:  Large scale centralised battery to service the community.  Decentralised option using new domestic scale battery technology. The community agreed for Natural Power to conduct a feasibility study and prepare a business plan should a project prove favourable. Natural Power identified Local Energy Scotland (LES) funding from the Innovation and Infrastructure fund and an application by Carsphairn Community Council (CCC) was submitted to Local Energy Scotland in August 2016. The grant application was successful and Natural Power where commissioned in September 2016. A copy of the Grant Application Form is located in Appendix A. The objectives and funding outcome are provided below. Grant Funding Objectives;  Provide a business plan to the community to achieve community storage scheme.  Provide a robust financial model for the community.  Provide a legal mechanism to community ownership of storage / solar panel scheme and draft the key legal document/agreement which the community would enter to allow the chosen scheme to be implemented.  Establish connections with electricity providers, demand side management and frequency response providers to enable roll out to other communities.  Establish connections with supplier of storage / solar panels to enable best value for money to Carsphairn and wider roll out to other communities. Grant Funding Outcome;  Provide the survey results from community opinion on a central battery or decentralised battery(s) store.  Once the direction with the community council members was confirmed, then more detail work to allow the business plan would be completed and delivered to the community.  Identify the wider initial drivers (technical, legal, regulatory) to a central storage and/or individual store within Carsphairn village. Highlighting the risk associated with these scenarios for the community council members. The council members would then make a decision on the direction of the Carsphairn Community Energy Storage Scheme (CCESS).  The business plan would; – Provide/draft the key legal documents/agreements which the community would need to enter into to allow the chosen scheme to be implemented in line with the financial model. This would allow the community to consider what legal rights/obligations the community or individual property owners were entering into to achieve the CCESS. – Establish relationships with energy storage, smart meters and solar panel providers to enable best possible price for equipment. The potential for economy of scale for buying and installing storage/solar panels will be a key part of the community scale implementation. – Establish relationships with energy arbitrage, demand management and frequency response service providers to enable similar schemes to be rolled out amongst other communities within Scotland. – Provide a robust financial model for the project which the community to rely on

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 Establish a project that, if interest dictates, could be rolled out across other communities. Natural Power was required to provide regular feedback on the project progression to Carsphairn Community Council Member & Local Energy Scotland, reporting the outcomes by the 31st March 2017. 2. Report Structure The diagram below provides an overview of the structure of the battery storage project scheme. This feasibility report will be broken down into the five sections, Aims, Method, Cost, Revenue and Financial, as shown in the diagram below.

Aims Bring enefit to the whole community

Method Decentralized Central

Compound Cost House House House

Grid Services Revenue Time Shift Tariff Grid Services

Financial Model

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3. Feasibility

3.1. Why Energy Storage? Energy storage is increasingly being seen as a key component in supporting the electrical network system. The trends in the UK electricity system have resulted in large scale development of wind power, shift towards distributed generation and a changing demand profile. In response the Transmission System Operator (National Grid) and Distribution Network Operators (DNO) are looking towards the flexibility of storage including batteries to help them manage their networks. At a domestic level batteries can be combined with Photovoltaics (PV). To demonstrate how generation and batteries can work together to meet demand, the graph below shows the typical solar generation and demand profile of domestic property.

Figure 3.1: Solar generation and Demand profile

Solar generation peaks at around 1 pm – 2 pm each day, as this is the peak solar intensity. Typical domestic demand generally peaks between 8am and 10am and 4pm and 6pm weekdays. This aligns with people’s energy demand for morning heating, cooking etc. and again in the evening period. Battery storage should allow the generation of renewable energy to be stored and then used during peak energy demand periods. Battery storage also reduces the amount of generating capacity the country requires as the DNO and National Grid would be able to use batteries to cover these peaks in supply and demand. Battery storage can also offer additional benefits. For example, frequency response services which have traditionally been provide by quick spinning hydro and diesel gensets to keep the National Grid in balance.

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4. Carsphairn Community Council Aims

4.1. Agreed Aims The aims of the CCESS were discussed in a formal kick-off meeting on 4th October 2016. The meeting was held at Natural Power’s offices. Carsphairn Community Council was represented by Sylvia Sinclair, Anne Rutherford and Liz Holmes and the project team from Natural Power and Harper MacLeod. The scheme aims where discussed to allow the project team to progress the feasibility. The agreed aims or principals of the implemented battery storage scheme where;  The project was to bring benefit to the community as a whole, both the village and the wider distributed properties.  Consideration for off-grid properties should be included within the feasibility.  The project is not necessary required to turn a profit as the wider societal benefits of battery storage could provide the business case for the project.  The battery solution should operate with minimal to zero resident input.  The legal obligations should be kept to a minimum.  The batteries were to provide energy to properties during grid outages

4.2. Community Meeting and Survey A community meeting was held in Lagwyne Hall in Carsphairn on 12th October. A presentation was delivered by Natural Power to inform the residents of the successful application and grant funding from Local Energy Scotland. The potential benefits and reasons for considering battery storage in Carsphairn where outlined. Around 25 people attended from the community on the evening. The following handouts were presented to all attendees; both are located in the appendix B of this report.  A copy of the resident’s letter introducing the project.  Resident questionnaire The questionnaire was developed in consultation was CCC and was designed to confirm whether Natural Power should focus on the central battery or decentral domestic battery option, or a combination of the two schemes. A number of questions about the resident’s house were designed to gain an understanding of the electrical demand in their property. A number of questionnaires were completed by the community at the meeting. Due to project time constraints community had a further 10 days to complete the questionnaire. It was agreed that a digital copy of the resident’s letter would be distributed though the CCC email list. Completed questionnaires could be emailed to Natural Power direct. Paper copies of the residents letter were also placed in the Carsphairn village shop, along with a post box to allow the completed questionnaires to be collected by Natural Power.

4.2.1. Survey Results It was agreed with the CCC that questionnaire results would be held by Natural Power and only a summary of the results would be provided to the Community Council. A total of 21 of 94 properties returned completed questionnaire. Results – 17 of 21 wish for the Community Council to consider both central option and decentralized option. – 3 of 21 wish for the Community Council to consider just a central option.

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– 1 of 21 wish for the Community Council to consider just decentralized option. – 20 of 21 wished to be part of the decentralized scheme. – 19 of 21 were connected to the electricity grid. – 19 of 21 did not have electrical central heating. – 3 of 21 properties had a solar panel already installed. – 4 of 21 know their property Energy Performance Certificate (EPC). Of the four known properties, two were A/B and two where E/F rated. The survey confirmed the community wished the study to consider both central & decentralized options and residents were prepared in principal to have batteries installed in their property. The limited response however made it challenging to ascertain the electrical demand, therefore some assumptions were made on the EPC of the community housing stock. 5. Central Battery Option

5.1. Central Method Transmission or Distribution A transmission scale project was discounted early in the project. The capital costs and operational obligations would make this a significant business investment and were considered beyond the aims of the CCC. It was considered that any potential central battery owned and operated by Carsphairn would be connected to the distribution network only. This would better align with Carsphairn’s aims, as it could provide direct benefits to Carsphairn community. Capacity and size of the central battery compound For the purpose of this study a candidate 1MW lithium ion battery was considered appropriate to service Carsphairn residents and to potentially access wider grid services. A 1MW battery would be about the size of a shipping container, circa 12 metres in length and 2.5 metres wide. There would also be inverter and transformer which would need to scoped and sized to the battery size. All of the infrastructure would need to be surrounded by a fence for security and health & safely. The compound area estimated at 20 by 20 metres would need to be sourced. Additional costs are considered below. Life span of battery Based on current technology it was assumed that the central battery would operate for around 7 to 8 years. The life span would be determined by the battery technology and the intensity of use. Once the infrastructure was installed there would be an opportunity for the battery cells to be replaced with new batteries to renew the life of the battery system and lower cost than replacing the full battery unit. SPEN Natural Power met Scottish Power Energy Networks (SPEN) to consider the feasibility and connection requirements a number of times over the course of the project. Currently, batteries are classed as generators by DNO, although this could change in the future. To connect generation to the network, a grid application is made and then a grid connection assessment is undertaken by the DNO who would assess if there is enough spare capacity in the network to accept this new generation. This assessment considers the worst case, i.e. all the current installed generation on the network generating at full capacity with no demand. If the network is not able to take the additional generation the cost and timetable to upgrade the network to meet this additional capacity is provided to the generator. This cost can significantly affect the viability of the project. Carsphairn Distribution Grid

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It was identified by SPEN that the distribution grid surrounding Carsphairn was already at full capacity and could not accept any new generation without upgrading the network at considerable costs. A constrained connection offer would be permitted. This allows the generator to export at specific times and would be curtailed or stopped from generating onto the network, when the network is at capacity. A reduction in the ability of the battery to export onto the network would reduce the ability for the battery to provide a service and therefore reduce the revenue stream. To quantify the battery curtailment and available spare capacity SPEN would require to undertake Active Network monitoring on their network at key locations around Carsphairn. Active Network Monitoring Active Network Monitoring is used by operators to monitor in detail generation and demand across parts of their network. It was considered it four network monitoring location would be required and the campaign would need to be in place for around 7 to 9 months, including a winter period. This would allow them to quantify generation and demand across the network to show whether the worst case scenario is realistic. At other locations this network monitoring has shown there to be more capacity than previously thought allowing for a connection offer to be made that does not require costly upgrades. Until this monitoring is completed SPEN would offer a connection that includes significant upgrade cost as they would not have the visibility across the network and would base their offer on the worst case. Central Battery linked directly to resident properties. An alternative connection and method of using a central battery was considered which would directly connect the central battery to individual resident properties. The battery would be charged during the night when the electricity price is low and used by the resident at peak times when the electricity price is high. This time shift charging mechanism could reduce the electricity bills of residents and could require setting up an Electricity Supply Company. Further to discussions with SPEN, it was identified that Carsphairn resident’s properties are serviced from over 15 different overhead lines. Locating a battery which could directly provide this time shift option to all or even a majority of the residents would either require 15 individual batteries located on each line or a single battery located on the main line 132KV line from Ken Doon substation. This main line does however supply a much larger area than the Carsphairn Community area and therefore the metering of the battery and residents properties to allow the battery to be practically operated was not consider feasibly. Figure 5.1:Carsphairn Village Grid Network was provided by SPEN to highlight the difficulty of locating a central battery.

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Figure 5.1:Carsphairn Village Grid Network

Figure 5.1:Carsphairn Village Grid Network, illustrates the difficulty and practically of locating a battery which meets Carsphairn aims of bring benefits to the community as a whole. A battery located at position A would be able to directly supply energy to Carsphairn but it would also supply a far larger area than Carsphairn. If a battery was located at position B, then the battery would be able to supply the top 2/3 of the village only. If the battery was located at either C or D line, only one third of the village, either top third or middle third. Clearly, a battery located at either B, C or D would bring little benefit to the wider community. This option, therefore does not meet Carsphairn’s aims of providing benefit to the community as whole and was not considered further.

5.2. Central Costs Grid Connection Costs A grid connection agreement with SPEN would be required to confirm CAPEX and OPEX of the connection. As stated above, they have recommended active network monitoring which could help reduce the reinforcement required, potentially lowering the connection cost. SPEN have advised the cost of the network monitoring would be around £4k depending on the number of monitoring locations around the village and Ken Doon overhead line running along rear of village.. Capital Battery Costs The costs for a battery would depend on the technology, capacity and which services the operator wants to access. Using the 1MW lithium - ion candidate battery the approximate CAPEX is estimated at £700K fully installed. This cost would include the Management of the construction programme by a third party constituent and civil and electrical costs on site

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Planning Consent Planning consent would be needed under the Town and Country (Scotland) Act 1997 as amended. The application would be submitted to Dumfries and Galloway Council as Planning Authority. The battery would likely be a local application, due to the nature and area required to include within the development boundary. Local applications have an 8 week target determination period but to allow for potential comments to be addressed, for a new development type and potential committee consideration an additional month should been included. Consultancy costs to prepare the application and undertake the consent management is estimated around £5,000; however this would depend on the scope of assessment requested by Dumfries and Galloway Planning Authority. There would be a planning application and advertisement fee associated with the application estimated at £2,500. Land requirements A land area of around 20 metre by 20 metre would be required to allow the central battery to be placed in the community. There are a few options open to community to secure this land.  Purchase the property from a surrounding landowner. This would require further capital cost to purchase the property.  Enter into an Option/Lease with the landowner to allow a battery to be installed and operated on their property. The purchase or lease cost of the battery would be open to negotiation with a local landowner and therefore an estimate of yearly lease is not provided. Clearly, how the landlord considers the development and whom the development is benefiting could potential influence the potential purchase or rental payment required to secure the rights to the site, as the battery would likely bring benefits to the landlord if their property is located within the community. One advantage which a community approach could have is the potential use of the Land Reform (Scotland) Act 2016. The Scottish Government legislation should enable a community to seek to purchase land from a landowner who is unwilling to sell or lease an area of their property to support the project. Should an agreement to lease or purchase a property fail through negotiation with the landowner. Additional Other Costs Additional to the cost noted above, other costs would be;  Legal costs in arranging for the property agreement, construction contacts.  Decommission bond requirements from planning conditions.  Decommission costs. At this stage it is difficult to accurately estimate legal and decommissioning costs.

5.3. Central Revenue There are two types of revenue streams open to Carsphairn Community. Time Shift Tariff This is where electricity is purchased during the night when electricity is cheap and used during the day when electricity is more expensive. However, as discussed above, a single battery cannot service the entire community and multiple installations would not be viable so this potential revenue stream was not considered further. Transmission Grid Services National Grid issue tenders for a range of services and operator bid a price to fulfil the service requirement. This ensures that National Gird get the services at the cheapest possible price to the customer. The services National Grid currently require include;  Enhanced and Firm Frequency Response,  Fast Reserve,

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 Black Start.  Voltage Control  STOR Even though Carsphairn would be connecting onto the distributions network, it is still possible to access transmission services, subject to the grid connection. It is expect that a similar market for distribution grid services will established in the future. The Scottish Power DSO Vision1 and Office of Gas and Electricity Market (ofgem) are looking to facilitate the introduction of a Distribution Service Operator (DSO) who would be enabled to procure services to support the distribution network. This could provide another revenue stream for central batteries within Carsphairn. Following discussions with SPEN and considering the current consultations it is expected that DSO would start to enter the market from 2022 onwards. At the national grid level the current longest contract available to services provides is 4 years. It is not possible to predict DSO contract however it is likely they too would be short term, with multiple contract required to cover the return on investment. The Transmission service market for battery is in its infancy, as battery technology and market matures this should remove some uncertainties. Central Financial Model Natural Power engaged with an energy assets management company, Origami Energy, who are experienced in the energy storage market and at operating energy storage projects. Origami Energy provided an estimated Internal Rate of Return of 6.2% based on a 1MW battery which has no operating constraint to the network and with favourable land rentals. With a constrained export, the IRR would drop closer to 5% and with an unfavourable rental payment, the IRR would drop below 5%. The battery being operated by a third party, would align to Carsphairn’s aims that the battery solution should operate with minimal to zero resident input and legal obligation kept at a minimum, as a single company would management the asset for Carsphairn.

5.4. Central Battery Risks There are number of risk associated with a central battery project:  Grid Connection Costs and Curtailment – The distribution network is at capacity potentially leading to high connection costs or a curtailed grid connection, which would limit access to grid ancillary services.  Revenue Contract Length – currently the contract length for these grid services is limited to 2 to 4 years. The payback of the battery life is over 5 years with no certainty of future contracts or price guarantees.  Planning risk – central battery would require planning consent and would be subject to the standard planning requirements and risk associated with consenting the project.  Land risk – the community would need to require a pieces of ground to operate the battery; this ground would be subject to agreement and negation from the current landowner.  Constructing risk – depending on the contract structure with the battery provider Carsphairn may have to contract the installation directly.

5.5. Central Recommendation The findings of the central and decentralized battery feasibility were provided to Carsphairn Community Council members (CCCM) and LES via a presentation and meeting in the Green House in February 2017. The results of the feasibility were discussed and the following recommendations were provide to Carsphairn Community Council.

1 http://www.spenergynetworks.co.uk/pages/dso_vision_consultation.asp Web link accessed 28/02/2017

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These expectations were discussed with battery suppliers and SPEN and industry experts over the feasibility study. The recommendation were to re-assess central battery in 2022 when it is expected that the;  DSO grid service market will be created. If/once the DSO grid services market starts, this could be bring additional markets at a distribution level which could provide additional or increased revenue streams.  Transmission market is maturing with longer grid service contract. This is considered favourable to allow more confidence in the revenue stream for the battery and where returns of battery projects are established.  Capital cost of batteries would have dropped. It is expect that as the battery storage market matures, that the capital cost of the batteries would have dropped and this would reduce the level of capital commitment required from the community to enter into central battery market.  Carry out grid monitoring once market conditions are favourable. Once market conditions are attractive CCC could carry out the grid monitoring to consider the potential curtailment the battery would need to operate with. 6. Decentralized In parallel to the central battery option, Natural Power conducted a decentralized battery feasibility study. A decentralized battery scheme would place individual batteries within resident’s properties.

6.1. Decentralized Method Grid connections SPEN confirm a G83 connection would allow a single generator exporting less than 16A/phase to connect to the distribution network. This is simple connection and allows domestic properties to export at a rate 3KW of onto the grid. This type of connection is the same connection as domestic solar farm with no restriction placed on the times of export. It was noted by SPEN that the G83 application would need to be submitted by individual properties to SPEN to qualify for a single generator G83 application. Capacity of battery The size of the domestic battery would depend on a range of factors.  The battery units available from suppliers are set at specific capacities as noted above.  The electricity demand of a property would demands on a number of factors such as insulation and sources of heating. From the community survey it was established that 19 of the 21 properties who responded had oil heating. Therefore the demand of electricity would be considered low and a battery no bigger than 6KW would be required. This formed the basis for the study. Decentralized battery chemistry The chemistry of the battery is fundamental to a battery project for a number of reasons;  The chemistry of the battery would dramatically affect the life of the battery and the number of time the battery can be fully charge and discharge. One cycle is a full charge and discharge.  Different battery chemistry would degrade at different rates, with the capacity of the battery being ‘removed’ over time due to this digression.  The depth of discharge (DoD) available. This is the percentage of battery capacity useful from the nominal capacity.

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The three different types of battery chemistry for a domestic battery are; Lead Acid, Lithium-ion (Li-ion) and Lithium-titanate. The battery characteristics and price are considered in the table below. Lead Acid batteries are considered old technology and are large heavy units compared to lithium ion batteries. As a result of the short life span 2.3 years and their unsuitability for being placed in a house, Lead Acid batteries were not considered in detail however, they are included within the financial models as a reference. Agreement required with residents Unlike the central battery option, no additional property would be required to be purchased or rented by the community. However a property agreement would still be likely be required to tie to battery to the property and enable access as needed by technicians. These restrictions or obligations would be made in agreement with the community prior to installation Internet connection All of the decentralized batteries considered require internet connection to allow the batteries to be monitored controlled remotely. This is to ensure the battery is used in line with the warranty and to enable potential the battery to be used to access other grid services. Internet requirements are minimal and would not require any bandwidth than a traditional webpage. The connection would need to be maintained while the battery is connected. Any resident wishing to have a battery installed within their property would require an internet connection test to confirm the speed/suitability of their internet connection. A lack of internet or Wi-Fi within a resident’s property is considered a show stopper to allowing a decentralized battery to be installed in resident’s properties.

6.2. Decentralized Costs A primary influence over the costs is the chemical composition and technology, as shown in table 7.1 below. Table 6.1: Battery characteristics

Battery chemistry Cycles Life span* DoD Cost / cost per Kwh Lead Acid 1,700 cycles 2.3 years 50% of the capacity 3 kWh battery is Example - £1,400 or £467 per Powervault G200- KWh LA Lithium-ion 4,000 cycles. 5.5 years. 80% of capacity 4 kWh battery is batteries £2,550 or £638 per Example 1 - kWh Powervault G200- Li Example 2 – 7,000 cycles 9.5 years. 80% of capacity £2,000 for 2.7kw or Leclanche Li-ion £740 per kW battery unit Lithium Titanate 15,000 cycles 20+ years. 95% of capacity £6,400 for 3.2 kWh battery capacity or £2,000 Example – per kWh Leclanche Ti-box

*Based on two cycles a day, 2 x 365 days = 730 cycles per annum.

CAPEX In addition to the battery unit costs there are;

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 Inverter costs – estimated to £200 to £800 per unit. The invertor is required to convert the AC from the property grid supply to how the electricity is stored in the battery in DC. The required inverter is depended on the type of battery and IS specified by the battery supplier. A specific inverter costs have been included within the financial models prepared by Natural Power.  Installation costs – estimated to £250 to £500 per unit. This is dependant on the battery unit. Some units are considered ‘plug and play’, and others require wiring into the property’s electricity supply. The cost for installation would also vary depending of the property’s current wiring. Indicative installation costs have been included within the financial model. OPEX All of the domestic battery suppliers have advised that the battery would require no operational costs and are warranted for the number of cycles or designed operational life. The financial model has therefore included no operational costs.

6.3. Decentralized Revenue Three sources of revenue were explored, Time Shift Tariff & Time of Use tariff, where the battery would enable saving to residents electricity bills and other services and Grid Services which would return revenue, similar to central option considered above. The three potential sources are considered below. Time shift tariff The time shift tariff are based on charging the battery with cheap energy electricity during the night and then using the energy during the day when electricity prices are higher. The saving is the margin between the low electricity price and standard tariff price. This principle is similar to the traditional night storage heaters which have been common place within Scotland. However, for battery store the energy stored can be used for all electrical devices. Natural Power reviewed standard electricity prices for UK customers and estimated that a night prices of 6.6 pence per kWh was realistic and standard electricity price was 14 pence per Kwh. Therefore a full battery charge is a saving of 7.4 pence per kWh. This saving per kWh would then be multiplied by the capacity of the battery. For example, the Leclanche Ti–box has a capacity of 3.2kWh. 3.2kWh x 7.4 pence per kWh means one full cycle is worth 23.68 pence of saving. To enable this saving the battery would have to be used during the times the electricity price was 14 pence and filled during the lower price. Time of use tariffs Natural Power also considered Time of Use Tariffs for potential larger margins between low and high electricity price. It is expected that time of use tariff would become more common place in the UK2. As sources of electrical generation become increasingly diverse in terms of technology, intermittency and location generation cannot be easily controlled or managed to meet changing demand. For example solar generation would peak at 1 pm each day and the two peak demand would be between 8 am and 10 am and 4 pm and 6 pm weekdays. Where the power supply companies would offer a flat rate of price per kWh, it is expect that price per kWh paid by domestic customer will increasingly follow the whole sale price fluctuation in the future. This would mean potential savings are made through users managing their demand to hit lower price periods. An example of time of use tariff available in the UK is Green Energy UK Time of day tariff, TIDE3. This tariff provides a low tide tariff of 4.99 pence per kWh between 11 pm and 6 am and high tide tariff of 22.4 pence per kWh for sort period between 4pm and 7 pm weekdays. However, this tariff was not considered a representative

2 Source - https://www.theguardian.com/money/2017/jan/03/green-energy-uk-launches-first-time-of-day-electricity-tariff viewed 09/01/2017 3 Source - http://www.greenenergyuk.com/Tide viewed 09/01/2017

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tariff to base the models on and the penalty of using the high traffic of 22.4 pence per kWh would potentially put resident off entering. Grid Services Similar to the central battery, third parties would pay for the use of a domestic battery. This would mean sacrificing some of the capacity, for example using the candidate battery of 6 kW, the third party would likely reserve 3 kW for their exclusive use. The third party companies would aggregate the batteries in order to provide ancillary grid services to the National Grid. Based on discussions with battery suppliers and third party aggregators these grid services can return around £50 per KW per annum. One battery supplier quoted a considerable increase to £150 per KW per annum however this was not confirmed in writing. Natural Power therefore used £50 per kW in the financial model. Once the battery capacity was assigned to the third party, the property owner would not be able use that capacity for energy saving from time shift or time of use tariffs. These grid services are subject to contracts, which are time limited. A contact length of 2 years is possible subject to further to discussion with the provider. For the purposes of this assessment Natural Power assumed that grid services would be required throughout the life of the battery, this represents a best case scenario.

6.4. Decentralized with Solar Panels Installing solar panels would provide an alternative source of generation than charging from the battery from grid. The Feed in Tariff (FiT) was established by the UK government to incentivise renewable energy generation. Feed in Tariff Rates The feed in tariff rate is provided by ofgem and provides a subsidy rate for each kWh of electricity produced for small scale renewables. The FiT rate which the generation would qualify for would depend on the sources of generation, the amount of capacity installed and for solar panels the EPC of the associated property. Current FiT rates provided by ofgem are located in Appendix C. The FiT rate for domestic solar has been decreasing over the last few years. For example for higher rate qualifier, the rate was 12.92 pence if the solar panels were connected before 1st October 2015. For solar panels connected in January 2017, the price paid per kWh has dropped to 4.11 pence per kWh for the same higher rate tariff qualifier. The FiT rate is currently being reduced by ofgem every 3 months by on average 0.07 pence for both the higher and lower rate tariffs. It is assumed that any battery storage project in Carsphairn would not be installed until 2018 at the earliest which means the potential returns from solar panels would be further reduced. Note, the financial models consider current 1 Jan to 31 March 2017 FiT rates provided in Feed-in Tariff (FIT) Generation & Export Payment Rate Table, 1 April 2016 - 31 March 2019. 1 January 2017 Version in appendix C. Export Tarff Additional to the FiT rates, solar panels also benefit from export tariff for electricity which is exported to the grid. For properties that only have solar panels there is nominal 50% of generation which is considered to export to the gird and 50% used by the property. Therefore, the export tariff provides an additional 2.45 (4.9p/2 = 2.45p) pence per kWh generated. The current export tariff from Scottish Power is 4.9 pence per kWh. This nominal 50% has been factored into solar panel FiT payment due to a lack of meters being installed in the property to confirm the amount of electricity being use internally or exported to the gird. It is expected that smart meters would be installed in property in the future and actual recorded usage would be factored in. For this feasibly, as batteries would likely be installed behind the meter, the battery can simply be considered as demand. The smart meter would not inform the internal/export percentage so it is expected that solar panels would still receive 2.45p per kWh generated. This may not always be the case. Natural Power has included the 2.45p per kWh generated in the financial model as return from installing the solar panels.

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FiT rate dependent on EPC of the property As mention above, there is higher and lower FiT rate for solar projects. The higher or lower rate (there is a middle rate but this is for generators who have more than 25 installations at properties with D or above EPC) is dependent on the EPC of the property the solar panels are associated with. If the associated property has EPC of D or above the solar project would be able to claim for the higher rate. If the property has an EPC of E or less the property would only qualify for the lower rate. The January 2017 rate for higher rate qualify projects is 4.11 pence per kWh. The lower rate drops to 0.52 pence per kWh. Based on Energy Saving Trust, Solar Energy Calculator4* financial modelling, a lower rate FiT qualify property fails to cover the cost of the solar panels. Properties which qualify for higher rates can recover their costs of the solar panels through FiT and Export tariff. Therefore, the higher rate FiT rates have only been used for this study,as the lower rates solar panels would fail to recover their costs. The community questionnaire included a question on property EPC rating. Four EPC ratings were known, two properties would qualify for the higher rate and two properties would qualify for the lower rate. Generating Profile of Solar Panels Solar panels would only generate during the daylight hours and would be seasonal as light intensity is significantly reduced over winter. At this stage seasonality has not been included within the financial models. It is assumed the solar panels would provide one charge per day to allow the resident to use during the evening hours. The financial models represent the best case.

6.5. Decentralized Financial Model Natural Power has prepared financial models for the different battery units available which factor in the range of battery characteristics with the potential saving and revenue the batteries and solar panels can achieve.

6.5.1. Financial model inputs assumptions All battery revenue has been subject to an expected 2% annual inflation rate and is discounted by 5% to provide a Net Present Value of the battery scheme. Battery using Time Shift Tariff Each battery Option connected to a time shift tariff would enable savings made through electricity margin between high and low electricity prices. The expected number of battery cycles is multiplied by the margin to produce an annual saving based on the number of cycles expected per day. Natural Power has produced models based on a use pattern of 2 cycles per day. Battery + 4kW Solar (Higher FiT) + Time Shift Tariff For the purposes of this assessment a 4kW solar panel installation is assumed. The 4kW solar panel system installed cost is estimated at £4,500 with a capacity factor of 8% in south west Scotland. Solar panels provide one charge (effectively free) whilst a night charge can be provided from grid at the low tariff price. Therefore the model has factored one ‘free’ charge and one charge at 6.6 pence. Therefore the cost to fill the battery at low times was dropped to 3.3 pence per kWh when modelling two charges per day. Additional to the free charge would be the revenue the higher rate feed in tariff would provide which was estimated to be £1,048 over the 20 year operational life of solar panels. A summary table of the cost and returns from solar panels per kWh located in Carsphairn are noted below. A full breakdown of the finical model is provided in the appendix.

4 Source - http://www.energysavingtrust.org.uk/scotland/tools-calculators/solar-energy-calculator viewed 10/01/2017

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Table 6.2: Solar Panel Summary

Per Total Revenue kWh Total number of kWh generated by the 4kW solar panels in Carsphairn. 51476 Low FiT Revenue £3,317.95 £0.06 High FiT Revenue £5,548.78 £0.11 Cost of solar panels generation £4,500 £0.09 Margin Low FiT -£1,182.05 -£0.02 High FiT £1,048.78 £0.02

Battery + Grid Services Each battery option was costed using grid services, providing a fixed price per kW per annum. The potential grid services have been estimated at £50 per Kw contacted to the third party company. The financial model has considered all the battery capacity has been contracted to the third party company and no capacity would be available for domestic use. Please note, Natural Power is not regulated by the Financial Conduct Authority and any information decision should be considered with input from professional financial advisers. Table 6.3: Summary of Financial Model into NPV

Battery + Time shift tariff Cost Revenue NPV Leclanche - Ti-box - 3.4Kw £6,400 £2,472 -£3,928 Leclanche - Apollion box - 2.7Kw £2,396 £1,206 -£1,190 Leclanche - Apollion Cube - 5.7Kw £3,696 £2,183 -£1,513 Powervault - Li-ion (G200s) - 3Kw £3,800 £957 -£2,843 Powervault - Li-ion (G200s) - 6Kw £4,800 £2,297 -£2,503 Battery + 4kW Solar (Higher FiT) + Time Shift tariff Cost Revenue NPV Leclenche - Ti-box - 3.4kW £10,900 £3,574 -£7,326 Leclanche - Apollion Box - 2.7kW £6,896 £2,793 -£4,103 Powervault - G200s - 3Kw £8,300 £2,433 -£5,867 Battery + Grid Services Cost Revenue NPV Leclanche - Ti-box - 3.4Kw £6,400 £2,491 -£3,909 Leclanche - Apollion Box - 2.7Kw £2,396 £931 -£1,465 Leclanche - Apollion Cube - 5.7Kw £3,696 £1,966 -£1,730 Powervault - Li-ion (G200s) - 3Kw £3,800 £1,138 -£2,662 Powervault - Li-ion (G200s) - 6Kw £4,800 £2,277 -£2,523

Summary of financial models inputs and outputs. A review of the finical models inputs suggested that the capital cost of the battery units were too high for the potential returns available from time shift tariffs or through gird service. The potential for change in the inputs and outputs is considered in the 6.7, Decentralized Recommendation, below. The financial models are included within Appendix D. A summary table of the Net Present Value (NPV) of the different battery and revenue streams is below.

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6.6. Decentralized Risks There are number of risks associated with a domestic battery project. Natural Power would consider these below;  The financial models are based on best case scenario for example, the battery are completely charged during low electricity times and completely discharged and used during high prices, thus maximising the potential margin the battery could bring to the property.  The solar panel generation is subject to climate conditions which were not factored into the financial models.  The FiT rates which each property would qualify for would be subject to the EPC of the property. This is considered above in more detail.  Grid services for domestic properties were limited to 2 years duration. This is no guarantee that potential revenue would be maintained at the level for the full lifetime of the battery. Natural Power has presumed that rate of £50 would increase at inflation at 2% per year.  The suitability of each house for battery installation costs would need to be assessed to confirm cost of installation.

6.7. Decentralized Recommendation The decentralized battery scheme feasibility and risks were presented to CCCM and LES in February 2017. The following recommendations were made to Carsphairn Community Council. The overall recommendation was to re-assess the decentralized battery option in 2020.  Consider batteries for a trial to help quantify benefits and provide the business case A small battery trail of a few batteries could help better qualify the real life returns of batters. Natural Power financial models are based on a best case for use. The reality is the use of the battery would not be uniformed and managed to return highest returns.  Wait for batteries to come down in price It is expected that domestic battery capital costs would drop in the next few years, as the domestic batteries become more common and the economies of scales results in the price drops from battery suppliers.  Electricity margin in time of use increases The electricity margins between low and standard prices from electricity provided could increase with changing electricity generation from renewables. If the margin from low to high price was to increase then the saving each battery charge could bring to the property will increase.  DSO provide a market Similar to central battery recommendation, if/once the DSO grid services market enters the grid service option this could provide additional revenue streams to the domestic battery. 7. Next Steps Further to the recommendations noted above for the central and decentralised battery options. Natural Power suggests that the community consider other energy efficiency measures which are available, for example loft or cavity wall installation or a community contribution scheme for replacement windows or electric boilers. These would bring benefits to the community as a whole and would reduce the energy consumption and bills of the community. This would also help properties to qualify for the higher rate FiT for solar panels, when/if the decentralised batteries & solar panels were installed. 8. Grant Application Natural Power presented the findings of the feasibility to CCCM and LES representatives in February 2017. Following discussion and a presentation from Natural Power outlining the results of the financial model and current

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project risks associated with either the central or decentralized energy storage project. It was agreed at the meeting with CCCM and LES, that the feasibility and business plan preparation project should be curtailed and results of the feasibility and recommendation into this report as the formal output of the awarded grant.

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Appendices A. Local Energy Scotland Grant Application

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COMMUNITY AND RENEWABLE ENERGY SCHEME (CARES)

Application Form - Infrastructure and Innovation Fund (IIF)

For more information on how to complete this form, please refer to the CARES IIF Guidance Notes www.localenergyscotland.org/iif . Funding for the next round of IIF is available for 6-month short term projects only from September 2016 to 31 March 2017. The maximum grant award available is £70,000. Applications should be submitted by noon Monday 18th July 2016.

Please note that if you do not contact Local Energy Scotland during the application period we are unable to support your application and this may result in your project not being submitted to panel for assessment. If you are considering submitting an application you must register an interest by completing the ‘Project enquiry’ form available via www.localenergyscotland.org/contact-us .

This application should be completed with help from your Local Energy Scotland Development Officer www.localenergyscotland.org/contact-us.

1.1 – Project title Carsphairn Community Energy Storage Scheme (CCESS) 1.2 – The Applicant

Registered Name: Carsphairn Community Council Legal Status: Community group Registered charity Community benefit society Community interest company Local authority Registered social landlord Academic institute Other, please specify and contact Local Energy Scotland asap to review eligibility:

Is your organisation able to Yes ……………………………………………………. reclaim VAT? No ……………………………………………..……… Organisations that cannot reclaim VAT on capital equipment through normal channels are allowed to count VAT in their total project costs. Address of registered office:

Address and postcode: Carnaval, Carsphairn, Castle Douglas, DG7 3TF

Contact details for correspondence Name of contact person Sylvia Sinclair – Vice Chairperson, Carsphairn Community Council (CCC) c/o. Address Carnaval, Carsphairn, Castle Douglas, DG7 3TF

Phone 01644 460 224 E-mail [email protected]

Alternative contact and email Scott Bennett, Natural Power, [email protected], 01644 430 address The Green House, Forrest Estate, Dalry, DG7 3XS 701

Page 1 of 15

Please describe any relevant  CCC was one of the first community councils to set up an experience that your organisation independent limited company to manage their community benefit has that will benefit the project income. Carsphairn Renewables Energy Fund Ltd (CREFL) began (max 250 words) in 1994 and operates today to provide a mechanism for the community to apply for grants/funding to achieve projects.  CREFL’s notable achievements to date are; o Purchase of the village shop premises and maintenance of the property ensuring that the only shop in the village continues to operate. o Improving television reception for the community via the installation of a television buster mast. See http://www.carsphairn.org/carsphairn-renewables-crefl/ for other notable CREFL achievements.  CCC constitution has been provided by Dumfries and Galloway Council and was adopted by the Community Council on 24/11/2014. CCC constitution is attached for consideration. CREFL constitution is also provided for reference. The legal requirement for the project may require a further separate legal entity to be created and this legal mechanism will form part of the feasibility.  CREFL’s first community benefit fund income came from Windy Standard 1 Wind Farm. Natural Power (NP) consented Windy Standard 1 on behalf of Fred. Olsen Renewables and RWE through which a strong relationship with CCC has developed since 1994. This relationship has grown throughout the development of a number of wind farms located within the Carsphairn area, where public consultation has occurred with the community.  Where CCC does not have the relevant experience, it has engaged Natural Power and Harper Macleod to assist with aspects of the project, as described later in this application.

(Word count 250) (We have been informed that clarifications will be allowed a reasonable exceedance to the word counts)

2.1 - Information for evaluation Please note word count. Bullet point lists are often easier to understand and please be brief and concise in your response.

Project Summary  The IIF funding will be used to conduct a feasibility study and produce a business plan for CCC to implement CCESS. The Please provide a brief summary of the benefits which CCESS will bring to Carsphairn are outlined in the proposed project. Project Beneficiaries section below CCESS aims to install and (max 350 words) manage energy storage (battery/ies) within the community.  The feasibility study will consider whether storage at individual properties or a central electrical storage scheme located in the village, or a combination of the two, would work best for the community requirements/risk model. See attached project plan for decision pathway.  As requested by local residents at the first community consultation meeting for CCESS, roof mounted solar installed onto residents properties could provide a potential source of energy generation and this will also be examined in the feasibility study.  CCESS will provide a process to establish relationships with electricity suppliers, energy arbitrage, demand managers and frequency response service providers to consider what electricity tariff and services could fit the community.  Examination of energy arbitrage, demand management and

Page 2 of 15 frequency response services to energy suppliers, through the potential use of smart meters and/or a central system control centre will inform where the more advanced services can be offered from the cumulative storage and what value can be secured from these services. (See attached Storage sheet provide by RenewableUK to provide details on the opportunities Storage project can bring).  CCESS is also keen to establish relationships with suppliers of residential battery storage systems and solar panels to ensure value for money to the community.  The scheme will seek to include future proofing of the installed equipment to allow electric cars to be charged from the battery(ies) and also enable the electric car battery(ies) to become a second battery store.  Once the various aspects above are considered, a business plan will be prepared that CCC can take forward into to project. The business plan will include recommendations to whether a central storage bank and/or individual properties battery storage is the preferred option for Carsphairn.  The business plan will also provide a financial model including CAPEX and OPEX, along with a cash flow schedule for the project. CCC intends to undertake the project through a separate body corporate ("NewCo"), which is likely to be a wholly owned subsidiary of CCC. NewCo will be incorporated if the feasibility study indicates that the project is viable. CCC may require to transfer any IIF grant funds received to NewCo.

(Word count 400)

How does your project align with the  A community scale storage scheme connected to the wider grid fund themes and aims? is innovative for Scotland. Battery storage is an emerging (max 250 words) market, being backed by traditional energy developers. However, a community led energy storage scheme has not yet occurred.  CCESS is keen to learn the process and establish relationships with electricity suppliers, energy arbitrage demand management and frequency response service providers to consider what electricity traffic and services could fit the community.  CCESS is also keen to establish relationships with suppliers of battery storage systems and solar panels to ensure value for money.  The scheme will provide opportunities to link the community’s energy demand with the significant existing and proposed supply of renewable energy generation within the surrounding area. Storage will enable the community to purchase electricity at times of low prices or excess generation. Therefore, the community will be able to associate times when the surrounding wind farms and other renewables in the local area are generating, with their storage capabilities. The energy storage can then be used when the price from the supplier is high.  The feasibility study will focus on the storage scheme but will also consider the potential for individual property solar generation and other power purchasing options being included within the project.  The commercial, legal and regulatory barriers will be examined as part of the feasibility study, to provide a pathway for the community.  The opportunity to feed CCESS into the new community led Local Plan will be examined.

Page 3 of 15 (Word Count 242)

Project Status and history  Carsphairn Community Trust, associated to CCC completed a Future Plan (FP) (attached) review in early 2016. The report Please describe the current status of considered the priorities for community and making the most of the project (i.e. Consortia formed, their community benefit funds. planning permission in place,  A specific priority for CCC was a Renewable Energy Scheme continuation of a previous project) and CCESS would fulfil this community priority. (max 250 words)  A meeting between key representatives of CCC and NP was held discussions on CCESS, and this funding application. It was agreed wider community consultation was required to consider if an application for CCESS should be prepared and submitted.  A wider community meeting was held where around 30 people attended from the community, where NP presented the idea of CCESS and the possible benefits it would bring. A debate and vote occurred, were a motion was passed to apply for the funding to allow a detailed feasibility to explore the to consider CCESS further. The community members expressed an interest in being party of the scheme.  The application has been drafted by NP (in kind), CCC reviewed, providing their input.  Harper Macleod LLP was also engaged, as they have the required commercial, legal and regulatory knowledge and expertise for energy and community schemes.  Scottish Power Energy Network (SPEN) has also been engaged and is keen to consider the project, if a new grid connection is required. NB. Individual property storage would not likely require a new specific grid connection. See correspondent attached from Euan Norris @ SPEN.  CCC has collaborated with renewable energy providers since 1994, utilising community benefit funds to support local services as described above. (Word Count 255) Project Type Overcoming barriers relating to grid capacity issues x

Existing grid is at capacity. Upgrades are in process Please tick all relevant categories that but additional storage close to sources of generation apply for your project will help to overcome these barriers as well as overcoming problems during power cuts in bad weather.

Energy Storage x

Demand side and active network management. x

Storage is primary demand side / network management. Smart meters will also be integral to this

Linking local energy demand with local renewable x energy generation.

Although generation options will be considered, the focus of the project will be on storage. There are 82 properties with potential for c5kW of storage per house amounting to around 400kW if we go for this option. A

Page 4 of 15 single central storage option could be larger.

Delivering renewable heat and electricity to local x customers.

There is potential for stored electricity to be used in off peak heating systems but the focus is on electricity.

Addressing commercial and legal barriers to support x the delivery of local energy

Energy masterplans to support a local planned energy system.

The proposal aims to address this as a single community co-operative in order to provide the maximum benefit to the community through combined buying power. There may be potential for solar to be developed on an individual basis but storage is intended to be for the benefit of the whole community.

Co-location/combining technologies for example wind x and solar

The community is in an area with several large wind farms. The proposal will also examine the potential for roof top solar to be combined with storage. The inclusion of arbitrage and smart metering options provides opportunities to combine these and other generating options as sources of stored power. There may also be an opportunity to link community based storage into proposed windfarms through community ownership options.

Business development and feasibility activity to support x subsidy free role out of renewable energy

Development of projects to maximize impact from x larger funding programmes,

The delivery of the CCESS after the Feasibility Study and Business Plan are complete will require substantial capital investment by the community. This could mainly come from Community Benefit Funding but other sources will also be examined. There may also be an opportunity to link community based storage into proposed windfarms through community ownership options.

Linking local energy demand to local renewable energy x generation.

Examination of these matters will be part of the feasibility study and will feed into the proposed business plan. There may also be an opportunity to link community based storage into proposed windfarms through community ownership options.

Knowledge transfer x

By involving Local Energy Scotland and applying for CARES funding for feasibility work it is hoped that the

Page 5 of 15 community will benefit from the experience of LES and that in return our findings can be used by LES to support other communities with similar projects. Local people will also gain from the experience of new technology.

Other ( Please specify below)

Sustainable community energy management that as x well as providing energy security could also provide community income stream

Potential to facilitate transformation to electric transport x

3.1 – Detailed Project Planning and Objectives  This fund would allow a detailed feasibility, which identifies a pathway and Project activities legal requirements for CCESS. Activities to be delivered  A community survey would be undertaken to establish preferences for either if funded (please list- max centralised or distributed domestic storage. 250 words)  The review of individual properties would consider suitability for storage and solar panels and possible locations for a central storage system.  HM will prepare a report for CCC which identifies the key legal issues relative to the project, including the different options available for the new project vehicle, recommendations on choice of vehicle and overall project structure and advantages/disadvantages of different forms of ownership/leasing of batteries and solar panels.  Electrical design for distributed domestic storage or central storage will be undertaken and liaisons with DNO to consider the feasibility of a central storage and grid options.  If central storage is favourable, then opinions from Dumfries and Galloway Planning Authority (D&GPA), SNH and SEPA will be sought to establish what inputs they required to permit central storage.  Liaison with energy arbitragers, grid services and frequency response providers to consider electricity tariff and identify what options are available.  Identify and establish relationships with storage and smart meter provider, along with solar panel supplier.  Liaison with D&GPA to ensure the forthcoming local development plan is favourable for central storage and/or new housing built within the Carsphairn community is built with storage / panels already installed.  A business plan for the CCESS will be provided.  Provide two monthly status reports and budget tracks to Local Energy Scotland (LES) and CCC.

(Word Count 248) Project Management  CCC was one of the first community councils to set up an independent limited company to manage their incoming community benefit fund from renewables. Please provide details of CREFL began in 1994 and operates to provide a mechanism for the local any project management community to apply for grants / funding to achieve projects. or development  NP is an independent renewable energy consultancy with over twenty years of experience, or other in-house project experience. NP provides expertise at every stage of the relevant skills within the project lifecycle: from feasibility, development, pre-construction, grid design group/consortium and application, construction, operations to re-powering, and through all (max 250 words)

Page 6 of 15 elements of due diligence.  NP planning and development team specialises in providing coordinated project management with community engagement. NP has consented over 500Kw of FIT scale projects.  NP has attended meetings with CCC and drafted this application ‘in kind’, demonstrating NP’s involvement in its local communities.  Harper Macleod (HM) will provide legal advice to CCC in relation to the project. HM is one of Scotland’s leading energy practices and have advised on more than 40 community energy projects within Scotland, including advising communities on establishing project vehicles and advising Forestry Commission Scotland on community benefit and participation arrangements for its renewable energy development programme. They have also advised both Knowes Housing Association and Berwickshire Housing Association on projects involving the installation of solar panels on over 500 social housing projects and the legal issues connected with ownership/leasing of those panels.

(Word count – 227) Project Beneficiaries  Carsphairn Future Plan 2016 noted that encouraging inward migration of Who will be the direct younger people is a key priority of the community. The Future Plan notes beneficiaries of the power failures and remoteness as discouraging inward migration. project  Savings made on electricity bills through CCESS would draw people to (max 250 words) Carsphairn.  CCESS would help overcome the remoteness of the village and the wider community, as CCESS would allow them to respond to local power cuts.  CCESS will also seek to design the storage scheme with the ability for electric cars to be charged using the system.  The community of Carsphairn is proposed to benefit from CCESS by; o Being able to generate and store their own electricity. o Managing their demand and supply to play the electricity tariff market. o System would seek to be designed to allow electric cars to hook up with the energy storage. o It providing a significant contribution towards meeting the objectives set out in the Future Plan  Help meet the renewable energy target for Scotland and wider UK.  Add to the 500+ megawatts of community and locally-owned renewable energy in Scotland.  Promote the decentralisation of energy production and storage.  Development of expertise in front line technology, with a view of advising other communities across Scotland on their possible energy storage scheme.  The project could provide a potential mechanism for renewables energy projects to fulfil the Scottish Government manifesto comment to community ownership. Battery storage could be provided to communities as part of the new community ownerships.  CCESS will help tackle climate change.

(Word count 250) Project Objectives 1 Provide a business plan to the community to achieve community storage Please list all Project cost scheme. element objectives. 2 Provide a robust financial model for the community. For example, if a 3 Provide a legal mechanism to community ownership of storage / solar panel Feasibility Study is scheme and draft the key legal document/agreement which the community planned clearly list the would enter to allow the chosen scheme to be implemented. aims of the study. 4 Establish connections with electricity providers, demand side management and frequency response providers to enable roll out to other communities. 5 Establish connections with supplier of storage / solar panels to enable best value for money to Carsphairn and wider roll out to other communities. Outcomes  Provide the survey results from community opinion on a central battery or

Page 7 of 15 What change/progress decentralised battery(ies) store. will be made with the  Identify the wider initial drivers (technical, legal, regulatory) to a central storage successful completion of and/or individual store within Carsphairn village. Highlighting the risk your project. associated with these scenarios for the community council members. The (max 250 words) council members would then make a decision on the direction (central or decentralised or combination of the both) of the CCESS.  Once the direction with the community council members was confirmed, then more detail work to allow the business plan would be completed and delivered to the community.  The business plan would; o Provide/draft the key legal documents/agreements which the community would need to enter into to allow the chosen scheme to be implemented in line with the financial model. This would allow the community to consider what legal rights/obligations the community or individual property owners were entering into to achieve the CCESS. o Establish relationships with energy storage, smart meters and solar panel providers to enable best possible price for equipment. The potential for economy of scale for buying and installing storage/solar panels will be a key part of the community scale implementation. o Establish relationships with energy arbitrage, demand management and frequency response service providers to enable similar schemes to be rolled out amongst other communities within Scotland. o Provide a robust financial model for the project which the community to rely on  Establish a project that, if interest dictates, could be rolled out across other communities.

(Word Count 245) Additionality  The feasibility could not go ahead this year without funding from Local Energy Scotland / CARES Fund. Clarify reason for  Whilst elements of this could go ahead on an adhoc basis,the purpose of this additionality. project is bring additionality (see aims) by bringing all of the community (max 250 words) together and address energy management at a community level, where the more complex issues surrounding community ownership, income and storage can be worked through.  Carsphairn Community has access to community benefit funding (CBF) from surrounding renewables energy projects. It is envisioned that the CBF would be safeguarded to implement the scheme. The feasibility and business plan will get the project off the ground for Carsphairn as a united community rather on an adhoc individual basis.  The CBF may also need to be match funded to ensure the implementation of the project to the whole community, and a detailed feasibility and business plan will likely be a requirement of any match funding.  By involving Local Energy Scotland and applying for CARES funding for feasibility work it is hoped that the community will benefit from the experience of LES and that in return our findings can be used by LES to support other communities with similar projects. (See knowledge transfer above).

(Word Count202) Innovation  We believe that community battery storage connected to the grid (or via frequency control with smart meters), has never been achieved at a How does the project community level within the UK or Scotland. demonstrate innovation?  Community ownership, at a local level, which provides a direct link between (max 250 words) generation, energy security and individual householder’s will be established

through the project.  The legal framework / structure required for setting up a community storage scheme will be identified. Once the particular project is chosen, then the key legal documents and agreement will be prepared and included within the business plan to identify the key components that the community would need

Page 8 of 15 to agree to allow the project to be a success.  Historically rural communities have been fairly behind their urban counterparts for technology innovation. The proposed scheme will enable the rural community to become leaders in their energy management, sustainability and future technologies. Thus, hopefully promoting the community to enable inward migration, a key priority of the community.  The project will bring smart technology with smart meters, energy storage, energy security and electric car charging facilities on a community level.  The install system will consider electric cars, allowing this technology to be integrated into the system in the future. This will be a key innovation for the community and will reduce the requirement for the community, currently located circa 9 miles from the nearest petrol station. This will promote and enable the community to become more sustainable and more resilient and flexible.

(Word count 243) Procurement  CCC is keen to use a local company where established connections exist through the development of a number of local wind farms and planning Please describe your consultation. tendering process and  NP has provided advice, attended community meetings and drafted this rationale for your final application on behalf of CCC in kind, demonstrating its role within, and choice relationship with, the local community. Moving forward, whilst NP will require costs to be covered, many elements will be carried out at reduced rates to Detail the responsibilities ensure success of the project for the benefit of the wider community. NP will regarding warranties strive to make savings where possible and will only charge on time incurred, associated with procured with the fees quoted are capped amounts. services (if appropriate). (max 150 words)  NP and HM have an established relationship through the successful development of a number of nearby renewable energy projects and the delivery of community benefit agreements.

(Word count 132) Land Building Tenure  One key idea of the project is that individual storage or solar panels will not Details require additional property/land agreements from a local farm or estate. Installing storage and panels into local residents who are going to directly Please include details benefit from the scheme, other than just receiving a ground rent, should be an and evidence of land use easier path. Clearly, identifying the legal issues surrounding community permissions (where ownership within individual properties will need to be considered. applicable)  If the central store is progressed then a more substantial property/land (max 150 words) agreement will be considered within the feasibility, with the potential locations, market rents and potential costs associated with a central storage being explored. The community has identified possible locations for the central storage scheme. These will be examined further as part of the feasibility study.  NP has expertise in planning and HM has expertise in property matters. The purpose of the feasibility and business plan is to establish mechanisms and structures between property owners, communities and energy arbitrager.  Other properties in the community will be considered for decentralized storage. Possibilities are the church, school, community shop and community hall. Ownership of these properties will be considered in the legal review, to consider if specific legal agreements are required for non-residential properties. Another consideration could be the permitted development rights for non-residential developments, which could restrict the installation equipment without further planning consents.

(Word count 223) Awareness-raising,  NP and CCC can present the final feasibility report and business plan to LES Education and Publicity and at required events or further interested communities.  NP marketing team will provide expertise to ensure a strong brand is Please list any ongoing or maintained. planned awareness-  Specific project branding will be considered on the feasibility report and

Page 9 of 15 raising measures business plan along with CARES and LES branding, where applicable. including displays,  National and regional press will be engaged to demonstrate the project publicity or specific success, were applicable. educational links. (max 150 words) (Word count 70) Scope for Replication /  Scope for rolling out community based energy storage across communities in Learning and Scotland. Documentation  Supply chains will be established with storage and solar panels supplier.  Relationships with electricity suppliers, demand side managers and frequency Please evaluate the response providers to enable roll out across communities in Scotland. potential scope for  The feasibility report will establish a business plan for the community to replication of the implement their project. Although the feasibility study will be specific to approach taken in this Carsphairn community, the method to setting up a legal entity and community project to be used structure would be useful for other communities around Scotland. elsewhere.  NP can present the final feasibility report and business plan to LES and at What are the plans for required national events. documenting and sharing  CCC has advised regional community councils on the set up of Community the knowledge obtained benefit fund management companies. from this project? (max 250 words) (Word count 119) Next steps  Once a business plan for a storage scheme is provided to the community, CCC could use their own community benefit fund which they receive from What’s next for your surrounding wind farms to implement there the project. project after IIF? Is it  The business plan and feasibility report could be used to apply for match complete, will it need funding/ grants to implement. capital funding, further  If a centralised storage option was favoured, then community ownership of research etc. property would be progressed to secure the properties rights. (max 150 words)  (Word count 73) 4.1 – Risk Assessment

Project Risk Assessment  Possibility of a lack of grid capacity to enable a centralised storage option in the village. – Proposed Mitigation, if central storage is not a viable Please describe any risks option without expensive/challenging grid upgrades, then the project will associated with this project only focus on storage within individual properties. Cost savings will be and how these risks will be maximised, as detailed below. Scottish Power Energy Network has not managed been engaged in detail at the stage. The central storage scheme would be designed around the grid capacity available at a manageable grid connection cost. The lack of grid will not stop the project. It may however mean the CCESS will look into decentralized storage options.  It should also be noted that the amount of grid available, only governs the maximum output which could be delivered at one time. If the grid availability was small, the battery capacity could be much larger, to allow a smaller output to be delivered for an extended period. i.e. the grid capacity available was 1MW, the battery installed could be 5MW capacity. A 5MW battery would deliver 1MW of capacity for 5 hours or delivery 100kWs for 50 hours. Therefore the grid capacity is not fundamental to the project.  The properties of the community being below the requirements for energy efficiency (EPC), band D or better, to allow the standard Feed-in Tariff (FiT) rate. Applications for FiTs are permitted for band E, F or G properties but the applicant will receive a lower price per KWh for the lifetime of the installation. Proposed Mitigation – EPC and likely FIT rates will be considered in the business plan for the potential solar generation. A valid EPC assessment will also be factored into the business model if solar generation is recommended along with the energy storage. Energy efficiency improvements could also be considered, potentially using community benefit funds to implement.  A reduction in the FiTs rate for small solar is also a possibility between the business plan creation and project implementation – Proposed

Page 10 of 15 Mitigation – The FiTs rate will be highlighted within the business plan as key criteria .  Lack of connectivity of the community, smart meters will likely require either an internet connection or mobile phone signal to allow communication. Both will need to be considered in the business plan. However, it is noted that Digital Scotland Superfast Broadband currently have Carsphairn village as being recipient to fibre optic broadband by the end of 2016.  Battery technology and life cycle will be a key factor of the project. Understanding the capacity and limitation of the batteries will be an input to the business model and financial model. Battery technology is rapidly advancing and sourcing the correct batteries to meet the communities’ needs will be key. 

5.1 – Project Cost Breakdown (costs excluding VAT) Other IIF Grant Item Estimated match Total project cost Expenditure item/activity requested No: or fixed* funds (£s) (£s) (£s) 1 Carry out of community survey to establish preferences for either centralized or distributed storage with the suitability of properties. This will Fixed £4,182 £4,182 include an assessment of properties for roof mounted solar to consider what generation could be included. . 2 Large storage detailed feasibility- review of possible location, engaging Fixed £3,366 £3,366 with planning, SNH, SEPA 3 Legal input into community ownership of the storage and solar panel scheme or land owner agreements for large storage option. Provide the Estimated £10,000 £10,000 legal mechanism and proposed structure. Drafting of the key legal documents/agreement for community considerations. 4 Consideration of the electrical design aspect for domestic and central store and liaison with DNO. The available Estimated £3,430 £3,430 grid will inform whether a central storage within the village is an option. 5 Liaison with energy arbitragers, grid services and frequency response to Fixed £3,842 £3,842 consider tariff and option for community scheme. 6 Identify and establish a relationship with a storage and/or smart meter Fixed £2,228 £2,228 provider, along with solar panel supplier if applicable. 7 Technical advice from wider Natural Estimated £4,743 £4,743 Power directors on the scheme. 8 Liaison with Dumfries and Galloway Council to ensure local plan Fixed £1,683 £1,683 considers energy storage for Carsphairn is included within the local

Page 11 of 15 plan. 9 Creation of a business plan for the CCESS. Production of financial model. CAPEX and OPEX Fixed £4,528 £4,528 considered. Consider if any further grants are available to the community. 10 Production of final report for delivery Fixed £3,842 £3,842 to Carsphairn 11 Project management & liaison with the community. Based on 2 reports per month to Carsphairn CC and Fixed £5,802 £5,802 Local Energy Scotland. A budget tracker will also be provided. 12 GIS resource (production of maps, Fixed £2,354 £2,354 diagrams and plans etc.) 13 Marketing input and branding (polishing the final report). This Fixed £0 £0 element of the work will be provided in kind from Natural Power. 14 Natural Power presenting report to community and Local Energy Scotland. This element of the work Fixed £0 £0 will be provided in kind from Natural Power. 15 Printing costs considered to be zero or minimal. Natural Power promotes paperless business operation. If printing is a requirement, costs can Estimated £0 £0 be included depending on the requirements from Carsphairn & Local Energy Scotland. 16 Expenses to be limited with meeting held at Natural Power offices. Estimated £0 £0

17 Hiring of the village hall for Estimated £0 £0 community meetings. Total £50,000 £ £50,000 * Please confirm whether costs listed are estimated or fixed by entering ‘estimated’ or ’fixed’.

5.2 - Details of breakpoints Please provide details of breakpoints you plan to implement to help control project expenditure. These are key milestones where information/milestones are met allowing decisions to be taken on whether to continue your project. We would suggest between 2-4 breakpoints for most projects. What needs to happen before Approx cost to Detail of project work to be actioned Breakpoint projects progress beyond reach breakpoint prior to breakpoint breakpoint £ ex. VAT 1 Community engagement has occurred Community engaged. Approx. spend to prior to applying for this grant and date £5,000. community has expressed a general Item 1 in the section 5.1 above, desire to have CCESS. Saving £50,000.

However, if following the detailed The project would community survey the wider community not deliver a were unwilling to consider either detailed feasibility scheme, then the project would be or business plan in stopped. this scenario.

Page 12 of 15 We do not expect this scenario to occur as community engagement occurred both directly by Natural Power and the Carsphairn Future Plan shows a desire for CCESS.

2 The community survey will be Community engaged. Approx. spent to conducted to establish preference for date £10,000 to either centralised or distributed storage Item 1 in the section 5.1 above allow community suitability. If one option is clearly survey and unfavourable, savings would be Aspects of the central storage reporting on achieved as discussions on the un- feasibility (item 2 and legal input results. favoured route would be curtailed. (item 3) Saving from the Whilst the study will focus on storage, at project budget will the same time consideration will be be utilised as only given to potential opportunities for roof one route mounted solar and community feelings (centralised or about this as a possible source of decentralised energy. battery/ies) will be progressed from an early stage and from the detailed business plan.

Approx. overall saving will be £15,000. 3 Legal pathway is unfavourable or Legal team to be given brief Will stop the impractical for community council to about the proposed project and project with a operate a community storage scheme. undertake work to establish a pencil down legal pathway for creating a scenario for either community scale energy the central or storage. decentralisation storage options. Item 3 above. (Approx. spent of legal option to be considered is £3,000)

Community Survey and initial feasibility with suppliers/providers and legal review would have occurred. Approx. cost to this point would be £15,000.

The project would not deliver a detailed feasibility or business plan in this scenario. 4 Central Storage Option – If a central Local DNO is to be engaged to Remove Large store is not available to the community provide an outline of grid storage detailed

Page 13 of 15 because of, for example grid connection availability and potential feasibility issues then the central storage upgrade costs. expenses (Items discussions will be curtailed and 4, 8 and parts of 3, individual storage option will be 10 and 11 will be progressed. curtailed with cost savings made.)

Approx. saving £7,500 but difficult to quantify due to level of work required to reach this unknown point is difficult. Total (should equal IIF grant request in 5.3) Various scenarios where £ breakpoints indicating where costs for subsequent phases may or may not be incurred.

5.3 – Project and grant cost (should match with table 5.1 – project cost breakdown) £50,000 IIF grant requested:

Payment in kind through time contribution from Natural Power approx. Other match funds: £15,000 Total project cost: £50,000 (IIF grant + other match funds): Grant offered - 31st August 2016 Estimated completion – 1st February 2017 Planned completion date:

(5 months project)

5.4 – Proposed Grant Payment Schedule (equal IIF grant request in table 5.3) Payment instalments Estimated payment date Estimated payment amount (£) number 1 Monthly invoices with first raised 1st £5,000 October 2016 2 1st November 2016 £10,000 3 1st December 2016 £10,000

4 7th January 2017 £10,000

5 1st February 2017 £10,000

6 1st March 2017 £5,000

Page 14 of 15 Section 6 – Important Information

State Aid Please be aware that all IIF Grants are awarded under the European Commission's De Minimis Regulation. This allows organisations to receive up to €200,000 of de minimis state aid over any three year fiscal period. Please speak with your Local Energy Scotland Development Officer for more information or if you are worried about reaching your State Aid levels.

Data Protection The Energy Saving Trust is collecting your details for the purpose of assessing and administering your funding application, and for the purposes set out in our Privacy and Cookies Policy. The Energy Saving Trust may need to contact you for further information to support your application. We will retain your information for monitoring, analysis and targeting, and may contact you, by email and telephone, in the future to assess customer satisfaction. We may share your details with the Scottish Government (excluding bank account information) who fund the scheme. The Energy Saving Trust will also share details with other funding bodies to ensure that no double funding occurs. The Energy Saving Trust’s Privacy and Cookies Policy is available at http://www.energysavingtrust.org.uk/Energy-Saving-Trust/Privacy-and-cookies or you can request a paper copy from the Data Protection Officer at The Energy Saving Trust’s registered office address.

Authorised Signatory for Organisation: Witness signature Signature: Signature:

Print Full Name: Print Full Name: Position in Position in Organisation: Organisation:

Date: Date: Place of Signing:

By signing this form, you will be confirming that the information provided in this application form is accurate and that you meet the conditions and criteria included in the Infrastructure and Innovation Fund Guidance Notes.

Please email a word version of your final application to [email protected] (copying in your Local Development officer) by noon Monday 18th July 2016.

Page 15 of 15

Ref: 1123716

B. Residents Letter and Questionnaire

Carsphairn Community Energy Storage Scheme March 2017 19 October 2016

Ref:1125434

Carsphairn Resident Local Office Registered Office Carsphairn The Green House, Forrest Estate The Natural Power Consultants Limited Dalry, Castle Douglas, DG7 3XS The Green House SCOTLAND, UK Forrest Estate, Dalry, Tel: +44 (0) 1644 430 008 Castle Douglas, Kirkcudbrightshire, DG7 3XS

www.naturalpower.com Registered No. SC177881 [email protected] VAT No: GB 243 6926 48

Carsphairn Community Energy Storage Scheme Dear Carsphairn Resident, You may be aware that Natural Power submitted a grant application to Local Energy Scotland Innovation and infrastructure fund on behalf of Carsphairn Community Council in July. The application was successful. The Community Council was awarded grant funding to conduct a feasibility study and business plan for the Carsphairn Community Energy Storage Scheme. Natural Power and the wider energy industry consider energy storage as a key part of the future energy market. Managing demand and being able to store energy should enable consumers to benefit from cheaper energy bills, along with providing other wider benefits. One example of a wider benefit would be the energy store being able to supply energy during wider grid outages (blackouts). Domestic energy storage is a new idea within the industry and Natural Power will seek to identify and quantify the benefits of domestic energy storage on a community scale through a feasibility study and business plan. The feasibility study could consider one of the following three options: 1. Decentralised Battery Storage – domestic scale battery in resident’s properties. 2. Centralised – a centralised battery located in the village. 3. A combination of the decentralised and centralised systems. 1. Decentralised Option The decentralised project would likely require a smart meter (a small box, no larger than a toaster) and battery storage unit (around the size of a standard washing machine unit) installed somewhere in your property. Where these items are located on your property will be agreed with you before installation. The opportunity to co-locate roof mounted solar panels will also be considered for the decentralised option. 2. Centralised Option This is a larger scale battery store that would require a dedicated housing somewhere in the village. This will be potentially connected to interested properties and managed to maximise savings on energy bills. 3. Combination of both Options The feasibility study will investigate a combination of both schemes to identify whether a combination of the project would bring benefit to the community. Feasibility If there is support from the community, discussions will take place at future Community Council meetings to investigate funding for the implementation of the energy storage scheme, at potentially no cost to Carsphairn residents. The questionnaire accompanying this letter seeks your views on the project. To inform the feasibility study, we (Carsphairn Community Council and Natural Power) need to know how many of Carsphairn’s residents and business owners would like to be part of the project and which storage option is favoured by them. Once the community appetite for a storage scheme is identified, Natural Power will consult with the grid operator, equipment suppliers & installers and property solicitors to identify the method and viability of implementing the desired storage scheme. Business Plan

Page 1 of 3

October 2016

Ref:1125434

If/once a possible scheme is identified, Natural Power will prepare a business plan which the Community can take forward to implement the desired scheme. The business plan will include; aims/objectives, an outline of the feasibility study results, an overview of the questionnaire (no names or property address will be included), an outline of the suggested project, financial model (CAPEX & OPEX), risk log, example of any agreements between the community council & residents and recommendations/next steps. A further presentation/survey on the project will be provided by Natural Power to allow the Community Council to confirm the wider community appetite for the chosen scheme. We would be grateful if you would complete the questionnaire and drop the response in at Carsphairn shop (a letter box located inside the shop) or email responses to [email protected] by 21st October 2016. Natural Power will retain the responses and a summary of the results will be provided to Community Council to inform future decisions. Should you have any questions regarding the scheme please feel free to email me.

As the feasibility progresses, further information will be provided to Carsphairn residents. Thank you for your time and consideration. Yours sincerely

Scott Bennett For and behalf of Carsphairn Community Council Assistant Land Agent [email protected]

Page 2 of 3

October 2016

Ref:1125434

Carsphairn Community Energy Storage Scheme

Questionnaire - 1) Resident Name:

2) Property Address:

3) I wish the community council to consider, (Circle one option) a. Decentralised battery option only. b. Central battery option only. c. A combination of the above. d. Another project – please provide details

4) I am happy for my property to be included in the decentralised feasibility study. (Yes / No)

5) My property is connected to the electricity grid. (Yes / No)

6) My property has electric central heating. (Yes / No)

7) My property has a smart meter installed. (Yes / No)

8) I have solar panels installed on/at my property? (Yes / No)

9) Property occupier (Circle one option) a. I am owner of the property b. I am the tenant of the property

10) I am aware of my property’s Energy Performance Certificate (EPC) (Yes / No). If yes, please provide the rating (Rating range from A - G).

Comment / Questions -

Page 3 of 3

Ref: 1123716

C. Ofgem – Feed In Tariff Domestic Solar

Carsphairn Community Energy Storage Scheme March 2017 20 Feed-in Tariff (FIT) Generation & Export Payment Rate Table 1 April 2016 - 31 March 2019 1 January 2017 Version

2016/17 2017/18 2018/19

1 Apr to 30 1 Jul to 30 1 Oct to 31 1 Jan to 31 1 Apr to 30 1 Jul to 30 1 Oct to 31 1 Jan to 31 1 Apr to 30 1 Jul to 30 1 Oct to 31 1 Jan to 31 Description Jun 2016 Sep 2016 Dec 2016 Mar 2017 Jun 2017 Sep 2017 Dec 2017 Mar 2018 Jun 2018 Sep 2018 Dec 2018 Mar 2019

Higher 4.32 4.25 4.18 4.11 4.04 3.97 3.90 3.83 3.76 3.69 3.62 3.55 Solar photovoltaic (other than stand-alone) with Middle 3.89 3.83 3.76 3.70 3.64 3.57 3.51 3.45 3.38 3.32 3.26 3.20 total installed capacity of 10 kW or less Lower 0.74 0.61 0.57 0.52 0.47 0.42 0.37 0.33 0.29 0.23 0.19 0.14

Solar photovoltaic (other than stand-alone) with Higher 4.53 4.46 4.39 4.32 4.25 4.19 4.12 4.05 3.98 3.91 3.85 3.78 total installed capacity greater than 10 kW but not Middle 4.08 4.01 3.95 3.89 3.83 3.77 3.71 3.65 3.58 3.52 3.47 3.40 exceeding 50kW Lower 0.74 0.61 0.57 0.52 0.47 0.42 0.37 0.33 0.29 0.23 0.19 0.14

Solar photovoltaic (other than stand-alone) with Higher 2.38 2.09 2.03 1.99 1.94 1.89 1.84 1.78 1.74 1.68 1.64 1.58 total installed capacity greater than 50 kW but not Middle 2.14 1.88 1.83 1.79 1.75 1.70 1.66 1.60 1.57 1.51 1.48 1.42 exceeding 250kW Lower 0.74 0.61 0.57 0.52 0.47 0.42 0.37 0.33 0.29 0.23 0.19 0.14

Solar photovoltaic (other than stand-alone) with total installed capacity greater than 250 kW but 1.99 1.75 1.69 1.65 1.59 1.55 1.50 1.44 1.40 1.34 1.30 1.25 not exceeding 1 MW

Solar photovoltaic (other than stand-alone) with 0.74 0.61 0.57 0.52 0.47 0.42 0.37 0.33 0.29 0.23 0.19 0.14 total installed capacity greater than 1 MW

Stand-alone solar photovoltaic 0.74 0.61 0.51 0.42 0.38 0.34 0.30 0.27 0.23 0.19 0.15 0.12

Higher, Middle and Lower tariff rates in brief:

Higher tariff rate will be applied if an EPC of level D or above is achieved before commissioning Middle tariff rate will be applied if an EPC of level D or above has been achieved but the Generator owns 25 or more installations Lower tariff rate will be applied if an EPC of level D or above is not achieved before commissioning

For more information on the requirements of PV installation please refer to section 5 of our guidance: https://www.ofgem.gov.uk/publications-and-updates/feed-tariff-guidance-licensed-electricity-suppliers-version-8-1 Page 1

Ref: 1123716

D. Domestic Financial Models

Financial Models Index

1. Summary Page – Page 1

2. Ti-Box & Time Shift Tariff – Page 2

3. Various Lithium Ion batteries & Time Shift Tariff – Page 3 & 4

4. Various Batteries & Solar & Time Shift Tariff – Page 5 & 6

5. Various Batteries & Grid Services – Page 7

Carsphairn Community Energy Storage Scheme March 2017 21 Battery - Time Shift Tariff Cost Revenue NPV Leclanche - Ti-box - 3.4Kw £6,400 £2,472 -£3,928 Leclanche - Apollion box - 2.7Kw £2,396 £1,206 -£1,190 Leclanche - Apollion Cube - 5.7Kw £3,696 £2,183 -£1,513 Powervault - Li-ion (G200s) - 3Kw £3,800 £957 -£2,843 Powervault - Li-ion (G200s) - 6Kw £4,800 £2,297 -£2,503

Battery + 4kW Solar (Higher FiT) + Time Shift Tariff Cost Revenue NPV Leclenche - Ti-box 3.4kW £10,900 £3,574 -£7,326 Leclanche - Apollion Box 2.7kW £6,896 £2,793 -£4,103 Powervault - G200s - 3Kw £8,300 £2,433 -£5,867

Grid Services Cost Revenue NPV Leclanche - Ti-box - 3.4Kw £6,400 £2,491 -£3,909 Leclanche - Apollion Box - 2.7Kw £2,396 £931 -£1,465 Leclanche - Apollion Cube - 5.7Kw £3,696 £1,966 -£1,730 Powervault - Li-ion (G200s) - 3Kw £3,800 £1,138 -£2,662 Powervault - Li-ion (G200s) - 6Kw £4,800 £2,277 -£2,523 TiBox + Imeon Hybrid inverter +Time Shift Tariff Battery Size 3.4Kw Battery and Inverter Total Cost € 8,000 Exchange Rate EU/GBP 1.25 € 6,400

Annual Inflation Rate %} 2 2016 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16 Yr 17 Yr 18 Yr 19 Yr 20 Discount Rate [%] 5.00%

Standard Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 0.164 0.167 0.171 0.174 0.178 0.181 0.185 0.188 0.192 0.196 0.200 0.204 Off-Peak Time of Use £0.066 £0.066 0.067 0.069 0.070 0.071 0.073 0.074 0.076 0.077 0.079 0.080 0.082 0.084 0.085 0.087 0.089 0.091 0.092 0.094 0.096 Marginal Price Difference offpeak/Standard £0.074 £0.074 0.075 0.077 0.079 0.080 0.082 0.083 0.085 0.087 0.088 0.090 0.092 0.094 0.096 0.098 0.100 0.102 0.104 0.106 0.108

Cycles per day 2.05 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Energy Throughput at 15,000 cycles 45,394 kWh £2,348 £2,340 £2,331 £2,323 £2,315 £2,307 £2,298 £2,290 £2,282 £2,274 £2,266 £2,257 £2,249 £2,241 £2,233 £2,224 £2,216 £2,208 £2,200 £2,191 Annual Saving on offpeak versus Standard £173.74 £176.60 £179.50 £182.44 £185.43 £188.46 £191.55 £194.68 £197.86 £201.09 £204.37 £207.70 £211.08 £214.51 £218.00 £221.54 £225.13 £228.78 £232.49 £236.25 Total Saving £4,071 £165.47 £160.18 £155.05 £150.09 £145.29 £140.63 £136.13 £131.77 £127.54 £123.45 £119.49 £115.65 £111.94 £108.34 £104.86 £101.49 £98.22 £95.06 £92.00 £89.04 NPV of Total Savings £2,472 Cycles per day 2.47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Energy Throughput at 18,000 cycles 54,077 kWh 2816 2805 2793 2781 2769 2757 2745 2733 2722 2710 2698 2686 2674 2662 2651 2639 2627 2615 2603 2591 Annual Saving on offpeak versus Standard £208.42 £211.69 £215.01 £218.38 £221.80 £225.27 £228.79 £232.35 £235.97 £239.64 £243.37 £247.15 £250.98 £254.86 £258.80 £262.80 £266.85 £270.96 £275.12 £279.35 Total Saving £4,848

Cycles per day 3.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Energy Throughput at 21,900 cycles 65,169 kWh 3425 3408 3390 3373 3355 3337 3320 3302 3285 3267 3250 3232 3215 3197 3179 3162 3144 3127 3109 3092 Annual Saving on offpeak versus Standard 3 cycles £253.46 £257.21 £261.00 £264.84 £268.73 £272.67 £276.66 £280.71 £284.80 £288.94 £293.14 £297.39 £301.69 £306.04 £310.45 £314.91 £319.43 £324.00 £328.62 £333.30 Total Saving £5,838

Battery Net Present Value -£3,928 APOLLION BOX 2.7kW

Exchange Rate EU/GBP 1.25 Costs of battery € 2,370 Inverter and installtion cost (Estimated) £500 Total Cost £2,396 Annual Inflation Rate % 2.00 Discount Rate [%] 5.00% 2016 Time Shift Tariff Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Standard Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 Off-Peak Time of Use £0.066 £0.066 0.067 0.069 0.070 0.071 0.073 0.074 0.076 Marginal Price Difference offpeak/Standard £0.074 £0.074 0.075 0.077 0.079 0.080 0.082 0.083 0.085

Battery Size (kWh) 2.7 Cycles Energy Throughput at 7,000 18900 KW 1 2 3 4 5 6 7 8 Enery use per year 2362.5 2362.5 2362.5 2362.5 2362.5 2362.5 2362.5 2362.5 Annual Saving £174.83 £178.32 £181.89 £185.53 £189.24 £193.02 £196.88 £200.82 Total Saving £1,501 NPV of Total Savings £1,206 £166.50 £161.74 £157.12 £152.63 £148.27 £144.04 £139.92 £135.92

Battery Net Present Value -£1,190

APOLLION CUBE 5.7 kwh

Exchange Rate EU/GBP 1.25 Costs of battery € 3,995.00 Inverter and installtion cost (Estimated) £500 Total Cost £3,696.00 Annual Inflation Rate % 2.00 Discount Rate [%] 5.00% 2016

Time Shift Tariff Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Standard Tariff £0.140 £0.140 0.840 0.857 0.874 0.891 0.909 0.927 0.946 Off-Peak Time of Use £0.066 £0.066 0.067 0.069 0.070 0.071 0.073 0.074 0.076 Marginal Price Difference E10 offpeak/Standard £0.074 £0.074 0.075 0.077 0.079 0.080 0.082 0.083 0.085

Battery Size (kWh) 5.7 Cycles Energy Throughput at 6,000 34200 KW 1 2 3 4 5 6 7 8 Enery use per year 4275 4275 4275 4275 4275 4275 4275 4275 Annual Saving £316.35 £322.68 £329.13 £335.71 £342.43 £349.28 £356.26 £363.39 Total Saving £2,715 NPV of Total Savings £2,183 £301.29 £292.68 £284.32 £276.19 £268.30 £260.64 £253.19 £245.95

Battery Net Present Value -£1,513 Powervault G200s 3.3KW

Costs of battery £3,300 Inverter and installtion cost (Estimated) £500 Total Cost £3,800 Annual Inflation Rate % 2.00 2016 Discount Rate [%] 5.00%

Time Shift Tariff Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Standard Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 Off-Peak Time of Use £0.066 £0.066 0.067 0.069 0.070 0.071 0.073 0.074 0.076 Marginal Price Difference offpeak/Standard £0.074 £0.074 0.075 0.077 0.079 0.080 0.082 0.083 0.085 Battery Size (kWh) 3 Cycles Energy Throughput at 5,000 15000 KW 1 2 3 4 5 6 7 8 Enery use per year 1875 1875 1875 1875 1875 1875 1875 1875 Annual Saving £138.75 £141.53 £144.36 £147.24 £150.19 £153.19 £156.26 £159.38 Total Saving £1,191 NPV of Total Savings £957 £132.14 £128.37 £124.70 £121.14 £117.68 £114.31 £111.05 £107.87

Battery Net Present Value -£2,843

Powervault G200s 6.6kwh

Costs of battery £4,300 Inverter and installtion cost (Estimated) £500 Total Cost £4,800 Annual Inflation Rate % 2.00 2016 Discount Rate [%] 5.00%

Time Shift Tariff Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Standard Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 Off-Peak Time of Use £0.066 £0.066 0.067 0.069 0.070 0.071 0.073 0.074 0.076 Marginal Price Difference E10 offpeak/Standard £0.074 £0.074 0.075 0.077 0.079 0.080 0.082 0.083 0.085 Battery Size (kWh) 6 Cycles Energy Throughput at 6,000 36000 KW 1 2 3 4 5 6 7 8 Enery use per year 4500 4500 4500 4500 4500 4500 4500 4500 Annual Saving on offpeak versus Standard £333.00 £339.66 £346.45 £353.38 £360.45 £367.66 £375.01 £382.51 Total Saving £2,858 NPV of Total Savings £2,297 £317.14 £308.08 £299.28 £290.73 £282.42 £274.35 £266.51 £258.90

Battery Net Present Value -£2,503 TiBox + Imeon Hybrid inverter + 4kW Solar Solar Battery Total Cost Exchange rate 1.25 € 8,000 Price £4,500 £6,400 £10,900

Annual Inflation Rate % 2.00 2016 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16 Yr 17 Yr 18 Yr 19 Yr 20 Discount Rate [%] 5.00% Time Shift Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 0.164 0.167 0.171 0.174 0.178 0.181 0.185 0.188 0.192 0.196 0.200 0.204 Off-Peak Time of Use Half the 6p - one (free) charge from Solar £0.033 £0.033 0.034 0.034 0.035 0.036 0.036 0.037 0.038 0.039 0.039 0.040 0.041 0.042 0.043 0.044 0.044 0.045 0.046 0.047 0.048 Marginal Price Difference offpeak/Standard £0.107 £0.107 0.109 0.111 0.114 0.116 0.118 0.120 0.123 0.125 0.128 0.130 0.133 0.136 0.138 0.141 0.144 0.147 0.150 0.153 0.156

Cycles per day 2.05 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Energy Throughput at 15,000 cycles 45,394 kWh 2348 2340 2331 2323 2315 2307 2298 2290 2282 2274 2266 2257 2249 2241 2233 2224 2216 2208 2200 2191 Annual Saving on offpeak versus Standard £5,887 £251.22 £255.35 £259.54 £263.80 £268.12 £272.51 £276.97 £281.49 £286.09 £290.76 £295.50 £300.32 £305.21 £310.17 £315.21 £320.33 £325.53 £330.81 £336.16 £341.60 Plus Revenue from Solar (Higher FIT) £1,049 Total Saving £6,935 NPV of Total Savings plus solar revenue £3,574 £239.26 £231.61 £224.20 £217.03 £210.08 £203.35 £196.84 £190.53 £184.42 £178.50 £172.77 £167.23 £161.86 £156.66 £151.62 £146.75 £142.03 £137.46 £133.03 £128.75

Cycles per day 2.47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Energy Throughput at 18,000 cycles 54,077 kWh 2816 2805 2793 2781 2769 2757 2745 2733 2722 2710 2698 2686 2674 2662 2651 2639 2627 2615 2603 2591 Annual Saving on offpeak versus Standard £301.36 £306.10 £310.90 £315.77 £320.71 £325.73 £330.81 £335.97 £341.21 £346.51 £351.90 £357.36 £362.90 £368.51 £374.21 £379.99 £385.85 £391.79 £397.81 £403.92 Plus Revenue from Solar (Higher FIT) £1,049 Total Saving £8,058

Cycles per day 3.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Energy Throughput at 21,900 cycles 65,169 kWh 3425 3408 3390 3373 3355 3337 3320 3302 3285 3267 3250 3232 3215 3197 3179 3162 3144 3127 3109 3092 Annual Saving on offpeak versus Standard £8,441 £366.49 £371.91 £377.39 £382.95 £388.57 £394.27 £400.04 £405.89 £411.80 £417.80 £423.86 £430.01 £436.22 £442.52 £448.89 £455.34 £461.87 £468.48 £475.17 £481.94 Plus Revenue from Solar (Higher FIT) £1,049 Total Saving £9,490

Battery Net Present Value -£7,326

Powervault 3.3KW + 4kw Solar Solar Battery Total Cost £4,500 £3,800 £8,300 Annual Inflation Rate % 2.00 Discount Rate [%] 5.00% 2016 Time Shift Tariff Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Standard Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 Off-Peak Time of Use Half the 6p - one (free) charge from Solar £0.033 £0.033 0.034 0.034 0.035 0.036 0.036 0.037 0.038 Marginal Price Difference offpeak/Standard £0.107 £0.107 0.109 0.111 0.114 0.116 0.118 0.120 0.123

Battery Size (kWh) 3 Cycles Energy Throughput at 5,000 15000 KW 1 2 3 4 5 6 7 8 Enery use per year 1875 1875 1875 1875 1875 1875 1875 1875 Annual Saving £200.63 £204.64 £208.73 £212.90 £217.16 £221.51 £225.94 £230.46 Total Saving on E10 offpeak versus Standard £1,722 Plus Revenue from Solar (Higher FIT) £1,049 Total Saving £2,771 NPV of Total Savings plus solar revenue £2,433 £191.07 £185.61 £180.31 £175.16 £170.15 £165.29 £160.57 £155.98 Battery Net Present Value -£5,867 Powervault 6.6kW + 4kW Solar

Solar Battery Total Cost £4,500 £4,800 £9,300 Annual Inflation Rate % 2.00 Discount Rate [%] 5.00% 2016 Time Shift Tariff Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Standard Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 Off-Peak Time of Use Half the 6.6p - one (free) charge from Solar £0.033 £0.033 0.034 0.034 0.035 0.036 0.036 0.037 0.038 Marginal Price Difference E10 offpeak/Standard £0.107 £0.107 0.109 0.111 0.114 0.116 0.118 0.120 0.123

Battery Size (kWh) 6 Cycles Energy Throughput at 6,000 36000 KW 1 2 3 4 5 6 7 8 Enery use per year 4500 4500 4500 4500 4500 4500 4500 4500 Annual Saving on offpeak versus Standard £481.50 £491.13 £500.95 £510.97 £521.19 £531.61 £542.25 £553.09 Total Saving from £4,132.70 Plus Revenue from Solar (Higher FIT) £1,048.78 Total Saving £5,181.48 NPV of Total Savings plus solar revenue £4,371 £458.57 £445.47 £432.74 £420.38 £408.37 £396.70 £385.36 £374.35 Battery Net Present Value -£4,929

APOLLION BOX 2.7kW + 4kW Solar Solar Battery Total Cost 4,500 2,396 £6,896 Annual Inflation Rate % 2.00 Discount Rate [%] 5.00% 2016 Time Shift Tariff Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Standard Tariff £0.140 £0.140 0.143 0.146 0.149 0.152 0.155 0.158 0.161 Off-Peak Time of Use Half the 6.6p - one (free) charge from Solar £0.033 £0.033 0.034 0.034 0.035 0.036 0.036 0.037 0.038 Marginal Price Difference offpeak/Standard £0.107 £0.107 0.109 0.111 0.114 0.116 0.118 0.120 0.123

Battery Size (kWh) 2.7 Cycles Energy Throughput at 7,000 18900 KW 1 2 3 4 5 6 7 8 Enery use per year 2362.5 2362.5 2362.5 2362.5 2362.5 2362.5 2362.5 2362.5 Annual Saving £252.79 £257.84 £263.00 £268.26 £273.63 £279.10 £284.68 £290.37 Total Saving £2,170 Annual Saving on E10 offpeak versus Standard Plus Revenue from Solar (Higher FIT) £1,049 Total Saving £3,218 NPV of Total Savings plus solar revenue £2,793 £240.75 £233.87 £227.19 £220.70 £214.39 £208.27 £202.32 £196.54 Battery Net Present Value -£4,103 Grid Services

Annual Inflation Rate % 2.00 2016 Discount Rate [%] 5.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Revenue per Kwh £50 £50.00 £51.00 £52.02 £53.06 £54.12 £55.20 £56.31 £57.43 £58.56 £59.69 £60.88 £62.10 £63.34 £64.61 £65.90 £67.22 £68.56 £69.93 £71.06 £72.48

Battery Size Total Cost Revenue Value Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16 Yr 17 Yr 18 Yr 19 Yr 20 Ti-Box 3.4 £6,400 £4,126 -£2,274 £170.00 £173.40 £176.87 £180.41 £184.01 £187.69 £191.45 £195.28 £199.11 £202.93 £206.99 £211.13 £215.36 £219.66 £224.06 £228.54 £233.11 £237.77 £241.60 £246.43 Battery Net Present Value £6,400 £2,491 -£3,909 £161.90 £157.28 £152.79 £148.42 £144.18 £140.06 £136.06 £132.17 £128.35 £124.58 £121.02 £117.57 £114.21 £110.94 £107.77 £104.70 £101.70 £98.80 £95.61 £92.88

Apollion Box 2.7 £2,396 £1,004 -£1,392 £135.00 £137.70 £140.45 £143.26 £146.13 £149.05 £152.03 £155.07 Battery Net Present Value £2,396 £931 -£1,465 £128.57 £124.90 £121.33 £117.86 £114.50 £111.22 £108.05 £104.96

Apollion Cue 5.7 £3,696 £2,119 -£1,577 £285.00 £290.70 £296.51 £302.44 £308.49 £314.66 £320.96 £327.38 Battery Net Present Value £3,696 £1,966 -£1,730 £271.43 £263.67 £256.14 £248.82 £241.71 £234.81 £228.10 £221.58

Powervault G200s 3.3 £3,800 £1,227 -£2,573 £165.00 £168.30 £171.67 £175.10 £178.60 £182.17 £185.82 £189.53 Battery Net Present Value £3,800 £1,138 -£2,662 £157.14 £152.65 £148.29 £144.05 £139.94 £135.94 £132.06 £128.28

Powervault G200s 6.6 £4,800 £2,453 -£2,347 £330.00 £336.60 £343.33 £350.20 £357.20 £364.35 £371.63 £379.07 Battery Net Present Value £4,800 £2,277 -£2,523 £314.29 £305.31 £296.58 £288.11 £279.88 £271.88 £264.11 £256.57

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