Opportunities for Local Energy Andrew Morton - Local Energy Scotland

Introduction The implications of 2045? Asset Lifespan (20 years) All installations should have the potential for zero carbon from 2025 All regulation and legislation change has to happen before 2025 All incentives (and disincentives) need to be in place by 2025 The future of the gas grid must be determined by 2025 It should be socially unacceptable not to plan for zero carbon from 2025 now “Transition” needs to be renamed “Switch” New Asset Design & Manufacture Likely to require an additional 2 to 5 years Route Map definition / clarity required by 2020 Existing Zero Carbon Options Those that already exist can be implemented next Those that provide benefits should be implemented immediately On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services.

Introduction Immediate opportunities? Heat Generation Renewable Heat Incentive (RHI) still in operation RHI likely to close in April 2021 (the terms of closure may impact timescales for pre-accreditation, pre-registration &/or tariff guarantees) Energy for Transport Electricity generation for EVs - dependent on access to vehicles Hydrogen production - not yet commercial, but improving Biodiesel & Biomethane - beyond the scope of this presentation Electricity Generation Feed in Tariff (FiT) closed to new customers from the end of March 2019 Grid constraints continue to limit implementation in many areas Some technology costs continue to fall Significant potential remains as part of a local energy system On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services.

Subsidy free electricity generation Benefits Keep in mind Gives a ball park indication of viability Keeps inputs consistent Uses an audited financial model with reliable output Every project differs in some (or all) ways to a generic template The parameters used are also time specific, as markets will change Regulations, legislation, technical viability, etc. all remain just as critical Wind 50kW 500kW 1500kW Capacity Factor 20% 31% Project cost per kW £4,400 £1,950 £1,350 O&M cost per kW £92 £59 £35 Hydro 37% £6,800 £3,300 £3,200 £125 £84 £50 PV 10% £1,000 £935 £800 £15 £13 £10 On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services. Asset Life 25 years Rent 5% (gross revenue) Low export value (SEG) 4.192p/kWh Higher export (PPA) 5.24p/kWh Interest rates used at 0% & 5% Long term debt of 15 & 20 years used No corporate tax (assumed gifted) No business rates (relief available)

Project IRR at 100% export On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services.

Project IRR with increasing use on site Small Scale PV 10p/kWh offset 4.19p/kWh export PV 15p/kWh offset 4.19p/kWh export PV 10p/kWh offset 5.24p/kWh export PV 15p/kWh offset 5.24p/kWh export Wind 10p/kWh offset 4.19p/kWh export Wind 15p/kWh offset 4.19p/kWh export Wind 10p/kWh offset 5.24p/kWh export Wind 15p/kWh offset 5.24p/kWh export Hydro 10p/kWh offset 4.19p/kWh export Hydro 15p/kWh offset 4.19p/kWh export Hydro 10p/kWh offset 5.24p/kWh export Hydro 15p/kWh offset 5.24p/kWh export   On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services.

Income per kWh required On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services.

Reducing Project Costs On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services. Collective Purchase - example: Farm Scale Solar Framework Tender Typical single installation 10 - 50kW PV on farm buildings ~ £900 / kWp As part of a procured cluster indicative tenders averaged ~ £700 / kWp Still individual contracts, but a potentially a significant project cost reduction

Income from generation Benefit of local offset On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services. Benefit from export

Offsetting Non-Domestic Import Tariffs On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services. The way some elements of a bill are charged is under review. Some costs charged per unit (p/kWh) may be removed & additional standing charges added

Time of Use Examples of time of use & per unit charges on non-domestic bills Distribution Use of System (DUoS) (example below) Balancing Services Use of System (BSUoS) Renewables Obligation Charge Feed in Tariff Charge EMR CfD Payments Climate Change Levy Weekdays 00:00 00:30 01:00 01:30 02:00 02:30 03:00 03:30 04:00 04:30 05:00 05:30 06:00 06:30 07:00 07:30 08:00 08:30 09:00 09:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00 13:30 14:00 14:30 15:00 15:30 16:00 16:30 17:00 17:30 18:00 18:30 19:00 19:30 20:00 20:30 21:00 21:30 22:00 22:30 23:00 23:30 Weekends On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services. (SSE) Time Band Typical cost difference % of green DUoS (Red) 5.397 p/kWh 3.995 p/kWh 385% DUoS (Amber) 2.349 p/kWh 0.947 p/kWh 168% DUoS (Green) 1.402 p/kWh 0.000 p/kWh 100%

Income per kWh required On our website, you will find the CARES toolkit that will take you through the step by step process of developing a renewable project. Within the tool kit there are technology specific and project development modules and the finance model which is a tool to help you assess the financial viability of your proposed project. We have cases studies where you can explore and find out how communities are already benefitting from installing renewable energy technologies. The Partnership Portal is an easy way to find potential project partners. From this, commercial developers can use the portal to seek a community partner and likewise community groups can use this to seek funds for a project. You can use the mini competition template to help your group tender and appoint a contractor for legal, financial or project management services.