Developing Mid-scale Solar for Council Heading one Heading two Date Developing Mid-scale Solar for Council Energy and Resource Management May 2017 Adam Clarke – Newcastle City Council Document prepared by Insert service unit

2020 Carbon and Water MAP 30% Reduction in Council’s electricity usage By 2020 Newcastle City Council will achieve: 30% Reduction in Council’s electricity usage 30% of NCC electricity supplied from low carbon sources Like most Council’s we have a number of carbon reduction targets and objectives and for Newcastle Council the 2020 Carbon and Water management action plan which was developed in 2011 sets out goals such as a 30% reduction in electricity usage and a 30% renewable energy target. Having had a strong focus on energy efficiency in the intervening years we are well on track with electricity reduction and our now turning our efforts towards increasing renewable energy generation. Newcastle City Council scope 1 emissions breakdown baseline year 2008/09

Reaching Our Renewable Targets Annually we use around 14.1GWh and half of this is from streetlighting. Excluding street lighting our large sites account for around 2/3 of electricity use and that’s where we started our renewable energy push, with our first rooftop PV system of just over 90kW installed in 2012 at the Council depot.

Renewable Energy Systems LOCATION System size (kW) Electricity generated (kWh) pa War Memorial Cultural Centre 44.28 64,000 Regional Art Gallery 86.25 124,000 Wallsend Library 80.08 115,000 No.1 Sportsground 10.2 14,800 No.2 Sportsground 20.16 30,000 New Lambton Library 9.9 14,300 City Works Depot 91.26 132,600 Newcastle Regional Museum 99.75 146,200 Summerhill Small Wind Turbine 2.5 1400 TOTAL 444.38kW 642,300kWh Since then we continued with a further 7 installations of rooftop systems to total around 450kW of installed PV. With the exception of a few more large sites and some smaller rooftop systems, we've essentially reached capacity for large Roof-top PV and it quickly became clear that if we were to achieve anywhere near our renewable energy targets it would require looking at megawatt scale systems

Newcastle Council Summerhill Landfill Having assessed a number of locations we settled on an area of closed landfill at our waste facility and undertook a detailed feasibility study to investigate ground conditions, concept layout designs and network connection studies. Landfill solar makes sense to us for a numberr of reasons: It is close to existing electrical infrastructure and road networks It is a secure operational site, out of public view with open, unshaded areas It generates revenue from land that has very little re-use options and supports a longer term closure plan for the site And while this particular cell is not methanegenic, it supports the development and creation of a renewable energy hub where we already have a 2.2MW landfill gas to electricity plant operating. While there are some technical challenges to overcome in terms of the footing design, we found that the advantages well and truly outweighed any potential downsides.

Council is Committed to Electricity Spend By necessity Council is a big electricity user Key to providing core service offering Committed to electricity spend of $Xm over 30 years Solar is an alternative option in spending that capital Plan to offset equivalent amount of Council load The question is not if, but how Council choose to use Capital Therefore a cost replacement Project In starting to introduce the project within the organisation, it became important to distinguish that this was not an investment project for Council.

Very different to a Commercial Project Council would be it’s own customer Removes margin and credit risk Council owns the site Not a selective use of capital Council is committed to spend $Xm - not a choice Council has: Sub commercial borrowing costs No excess return requirement A longer term view than a commercial player Council values economic, social and environmental benefits Net saving on annual electricity cost from year 1 Self financing with zero rate payer impact Scope to be cashflow positive from year 1 Even allowing for debt cost Drive a number of policy aims Leverage the environmental and social positives Strong land re-use story Engage schools/community on the environmental positives Stronger academic ties with on-site research

Range of Capital Costs and cost of Electricity On the strength of the Feasibility study we moved to an Expression of Interest stage to market test our assumptions and from that received 18 proposal. The process really confirmed that we were well within the range on the modelling we’d undertaken and also provided some pretty hard to ignore facts around just how much the levelised cost of renewable energy had dropped. It’s something that requires constant revision to the keep the business case

Lifetime project savings above repayment costs The information from the EOI also allowed us to further refine our business case and undertake detailed simluations of the potential financial returns, revealing very little downside risk

Tipping Point well and truly reached NSW Electricity prices more than doubled in last 12 months When we started developing the project, I could count on one hand the number of Megawatt scale solar systems in Australia. This year there are now 20 under construction or at financial commitment, equating to something like 2GW of extra capacity. With huge declines not just in equipment but also EPC costs, and the phenomenal increase in wholesale electricity prices, its no wonder the investment wave has finally broken and the gold rush is underway

Impact of Summerhill Project towards targets  Returning to the initial drivers of environmental targets, they’ve really become an added benefit to some significant ongoing budgetary savings that can be achieved through generating renewable energy. The Summerhill landfill project in particular will get us to over a 50% renewable energy offset and when combined with an upgrade of Council-wide streetlighting to LED we start to achieve:  increases in renewable energy (up to 81.43%); reduction in Council carbon emissions (up to 68.73% ; reduction in Council electricity usage (up to 38.39%), and; With millions in ongoing budgetary savings (up to $2m annually) And all achievable within an 18 month timeframe.