Extraordinary circumstances
We’re sending this news update at a time of extreme uncertainty about just how serious the Corona-19 crisis will become.  We trust all on our mailing list are coping well with the extraordinary circumstances.

The objective of this newsletter is to provide a brief update of our own news, including a message to our shareholders about interest payments.  We are also taking the opportunity to mention some of the encouraging work being done by other nearby community energy groups.

Interest payments
We’re pleased to be making the fourth round of annual interest payments to shareholders in March or early April.  The payments include dividends at the 4% rate agreed at the AGM, plus capital repayments at 1/18^th of your original investment. Online payments will be made using the bank details you have provided previously. Those of you who received cheque payments last year will be getting a cheque again unless you quickly advise our Treasurer Nick Owens that you would prefer an online payment.  In this case, please advise your bank account number and sort code.  (WhatsApp is a more secure way of doing this than by email, as WhatsApp messages are encrypted.  Nick’s mobile number is 07817 081399, and email owens.nl@gmail.com.)

Email confirmation of payments, for evidence of the dividend receipt for your income tax records (for online dividend recipients) and letters likewise (for cheque dividend recipients) will follow over the next couple of weeks — they are labour intensive to produce and, for some, the volume of work-from-home has not paused because of COVID-19!

The future of HKD Energy
As explained at the AGM in October, in order to provide a more assured future for HKD Energy, we have been in discussions with OVESCo (based in Lewes) about a merger.  These discussions have been proceeding with goodwill on both sides, albeit rather slowly.  The pressure to resolve this has been alleviated considerably now that we have an additional director – Victoria Standfast. Victoria is a very welcome addition, being both a shareholder and also having the detail knowledge gained from submitting our regular VAT returns.

Downlands School solar systems
The two systems at Downlands continue to perform well and seem to have survived all the poor weather without problems.  The poor weather gives reduced solar generation, of course, but has the benefit of effectively cleaning most of the panels (the seagulls are still rather overly fond of a few panels).  A full inspection of the panels is due soon.

Solar Traction Project
Work is continuing on this project during 2020 and beyond.  Any development in our area will not take place for two to three years.  More information – https://www.ridingsunbeams.org

Other Community Energy news
In the Brighton area, Brighton Energy Co-op have completed an impressive number of projects that they managed to pre-book onto the Feed-In-Tariff scheme before it finally ended.  However, more recently, BHESCo have also been making impressive steps towards making community energy concepts work in the post-FIT environment, with their energy survey services, etc – their website tells the story – https://bhesco.co.uk

BHESCo have also recently announced a partnership with Co-op Energy/Octopus Energy and jointly launched a Community Power tariff.

HKD Energy are members of Community Energy South (CES), who are jointly organising (with Community Energy England) a conference titled “The Role of Community Energy in tackling the climate crisis & the race to net zero”.  This will now take place online as a virtual conference on 30th April. More details on CES website:  https://www.communityenergysouth.org

Juliet Merrifield, Chair            Nick Owens, Treasurer
Victoria Standfast, Director    John Willis, Secretary

Interest payments
We’re pleased to be making the third round of annual interest payments to shareholders this month.  If you are a shareholder and you haven’t received your payment, please get in touch to ensure we have your current contact details.

Solar Traction Project
Earlier this month we completed and submitted the report on our feasibility study looking at the potential of solar energy to power our south-east railway network. While solar PV is an increasingly important part of the energy system, there are no examples of solar systems directly supplying railways anywhere in the world.

The Riding Sunbeams project is led by 10:10, Community Energy South (CES) and other partners. In 2018 five local community energy groups including HKD Energy received funding through the government’s Rural Community Energy Fund for local feasibility studies. We commissioned Ricardo Energy and Environment to undertake the Hassocks study and CES led the commercial work.

As with any world firsts, there are issues to be resolved, especially on innovative aspects of the technical and commercial arrangements.  The potential for community investment rests on negotiating an agreement to buy renewable electricity over the lifespan of the solar panels. So an important focus of this initial work has been engagement with Network Rail, who are strongly supporting the project.

The report, a summary of which is on our website, sets out:

• Solar energy projects need to find new ways to offer an attractive investment, now that there are no government subsidies.
• Possible grid connection options, and the capacity of the network to connect new generation via the Network Rail power supply system.
• The search for a suitable site for a ground-mounted solar array close to the railway near Hassocks, focusing on a corridor along the railway line north of the village. Seven possible sites were assessed for suitable area, size of solar PV system and grid connection cost. Several showed potential for 3-5MW of solar PV capacity, but a number have high risk constraints that would be expensive or impossible to overcome. Two sites were identified as the least constrained.
• Commercial arrangements: a long-term Power Purchase Agreement (PPA) with the right pricing structure and a financially strong customer such as Network Rail is an essential component for achieving a ‘bankable’ or ‘investable’ project. Some key principles were identified to shape a PPA.
• Preliminary financial projections analysing costs, revenues and potential generation for a 3.8 MW scheme and a 0.77 MW scheme. One site shows indications of a potentially bankable solar PV project; in the next stages more accurate financial data will be gathered to improve the accuracy of the model.
• Potentially substantial benefits for the variety of ‘communities’ including both the local community where the solar installation is placed, and also rail-users, a community of interest, but not of geography.

More information:  See the Riding Sunbeams progress report on the CES website – here

Next steps: The Riding Sunbeams consortium (which includes 10:10, Community Energy South and others) has received a First of a Kind (FOAK) grant from the Department of Transport and Innovate UK to test technical solutions, and finalise the commercial delivery model and PPA. Meanwhile, HKD Energy will continue to explore site options identified in this study. We will share information via our website as it becomes available.

Bec Hanley, Co-Chair          Juliet Merrifield, Co-Chair
Nick Owens, Treasurer        John Willis, Secretary

Feasibility study on ground source heat

Our feasibility study of a ground source heat pump system for Downlands and Windmills schools is now complete and has been approved by the funders, the Rural Community Energy Fund.  You can download the full report or executive summary from our website, https://www.hkdenergy.org.uk/projects/heat-from-the-ground/
If you don’t have internet access and would like a hard copy of the report please get in touch.

We are disappointed that the study’s conclusion is that none of the options reviewed is financially viable at the moment, although some are technically feasible.  The combination of historically low gas prices (the alternative fuel) and substantial capital costs (including modifications needed to existing heat systems in the two schools) means the project cannot go ahead in the short term.  We will keep a close eye on gas prices over the next few years, and hope we can revisit the project later.

Meanwhile a lot of the detailed information collected for the project can be put to other use.  We’ll be working with the two schools on energy efficiency measures that can improve the way their existing heat systems work.

Online survey

Thanks to all of you who contributed to our online survey (or who came to our public meeting and contributed your views).  You told us that addressing climate change was your top priority in supporting HKD Energy (over 80% gave this as priority 1 or 2), closely followed by supporting the local community.  As someone at the public meeting told us, a good financial return ‘is an extra bonus’.

You also had good ideas for projects we should be exploring next.  77% were interested in exploring electricity storage options at the community level, 45% said don’t give up on renewable heat, and 36% said both wind and solar projects should be looked at. You also had lots of specific ideas including low-carbon community transport (HKD electric bikes anyone?) and electric car charging points in local car parks. We’ll be studying the survey results carefully as we discuss future opportunities.

Renewable Traction scheme

HKD Energy is one of several community energy groups hoping to get involved with an exciting and innovative project being developed by campaigning group 10:10, Community Energy South, and Imperial College London.  The project is exploring how solar energy could be plugged directly into the ‘third rail’ power supply system of the railways in the south east.  This is currently powered from the national grid via substations at intervals along the railway line, which convert the AC power of the national grid to the DC electricity required for the railway.  Solar panels generate DC power, so if they could be connected directly there is the potential to avoid the ‘logjam’ on the national grid in our region.

The first phase of the project, a detailed study of the technical requirements of connection, will be completed soon.  In the second phase HKD Energy and other members of Community Energy South are looking for potential sites to pilot small ground-mounted solar arrays that would be close to the railway substations.  We’re hoping to find at least one site that has enough potential to be worth a more detailed feasibility study. You can read more about the project so far on http://www.railtechnologymagazine.com/Comment/plugging-solar-power-into-our-railways

And the sun keeps on shining

The fine weather earlier in the summer was great news for solar power.  From a solar powered bus in Brighton to an electric-powered passenger ferry in Finland, from growing numbers of electric cars on the road to Google’s data centres and offices becoming entirely powered by renewables, we’re beginning to see change happening.  This summer for the first time, renewable sources generated more electricity than coal and oil and gas combined.  These, and many more, stories of ‘climate hope’ are collected by 10:10 on https://1010uk.org/climatehope

And if you’ve been thinking about getting an electric car, our neighbours in Steyning have put together a very useful beginner’s guide on http://www.1010steyning.org/electric-cars/

Closer to home, the panels on Downlands School and sports centre have had a good year, with particularly good outputs in the second quarter (Q2) offsetting the poor figures in Q1.  The total Q2 output (30,090 kWh) was 5.5% higher than 2016 and 2.6% higher than 2015.  More recently, we have lost approximately seven days of generation on the main school system during August due to the system outage necessary to connect the updated power supply required for the new buildings, however we believe the contractor was successful in keeping the outage time as short as possible.

Chris Handel, Chair             John Willis, Secretary
Nick Owens, Treasurer        Juliet Merrifield, Director
Bec Hanley, Director

HKD Energy Annual General Meeting

You are warmly invited to our AGM on Monday 5 December 2016.  Our main speaker after the business meeting will be Mark Kenber, Managing Director – Energy Supply for Mongoose Energy.  Mongoose Energy is a co-operative company whose goal is to change the nature of energy ownership, generation and supply. It works with community groups, commercial developers and investors to identify, develop, finance, build and manage community owned, clean energy projects.  Mark will talk about the new energy supply company that Mongoose will launch soon, to be the UK’s first energy supply company that is majority owned by community energy groups.  Unlike other suppliers, the majority of the profits will be invested in the communities that help generate it, being used to run environmental and social initiatives. Full details of the AGM will be provided in our November newsletter.

Renewable Heat Project
We are delighted to say that we have just been awarded a grant from the Rural Community Energy Fund (RCEF) to conduct a feasibility study of a project using ground source heat to provide heating for two schools and a sports centre.  RCEF is a £15 million programme, delivered by WRAP and jointly funded by the Department for Environment, Food and Rural Affairs (Defra) and the Department for Business, Energy and Industrial Strategy (DBEIS).  It supports rural communities in England to develop renewable energy projects which provide economic and social benefits to the community.  For more information on RCEF, visit www.wrap.org.uk/renewables.

What is renewable heat?
Renewable heat is important because almost half the total energy consumed in the UK is used to heat buildings.  Gas and oil are the main fossil fuels in use for heat.  Replacing these with renewable sources of heat will significantly reduce carbon emissions.  Renewable heat sources in the UK include biomass (mainly wood, burned in boilers), solar thermal panels (which heat water rather than generating electricity), air source heat pumps and ground source heat pumps.  Heat pumps work like refrigerators in reverse, capturing heat from the environment for our homes and buildings.
The system we are exploring for the schools is a ground source heat pump.  This makes use of the warmer temperatures (in winter) found underneath the ground – the temperature in the ground at a depth of 6 metres is roughly equal to the mean annual air temperature.  A pipe circulates water in a closed loop system underground, and a heat pump extracts the warmth from it to provide heat for the building.  For every unit of electricity used to operate the ground source heat pump, 3 to 4 units of heat are delivered to the building, making it very efficient.

The feasibility study
The project will explore the technical and financial feasibility, and community support for a ground source heat pump system to provide heat to Downlands secondary school, Windmills junior school and Hassocks sports centre (located at Downlands).

If the feasibility study demonstrates its financial and technical viability, we expect that the scheme would be funded by a public subscription for shares in HKD Energy Ltd to cover the cost of the initial capital works and commissioning.  We anticipate that to attract sufficient interest from shareholders the scheme would need to give subscribers a rate of interest of 4-6% per annum.  Income to repay capital and pay interest to shareholders would come from charges to the schools and sports centre for heat provided, and from the government’s Renewable Heat Incentive.

The renewable heat incentive
The RHI is the world’s first long-term financial support programme for renewable heat. The scheme is designed to bridge the gap between the cost of fossil fuel heat sources and renewable heat alternatives, through financial support for owners of participating installations, both domestic and non-domestic. Scheme participants are paid a tariff per kilowatt hour of heat generated, with payments made quarterly for either seven years (domestic) or 20 years (non-domestic).  The level of tariff support varies according to the technology used, with ground source heat pumps receiving good support since a significant increase in 2014, currently at 8.95 p/kWh.

Update on Downlands solar project
The solar panels at Downlands have continued to generate well, particularly with the good weather we had during May and August, and despite some long periods of poor weather. The comparison of last year’s generation with this year’s is interesting, with the total generation for each of the two years being almost equal, but with some months showing big variations.  For example August 2016 achieved 21.5% more generation than in 2015, whereas for June the 2016 generation was 24.1% lower than in 2015.

As explained in previous newsletters, we do have an on-going problem with the fouling of some of the panels by seagulls.  Fortunately the seagulls do tend to congregate in particular places, which means that only a small number of panels have a significantly reduced output.  The TiGo optimisers on each panel are effective in limiting the problem to just those panels with the fouling and consequently the overall effect on generation is not of great concern.

To add to the concerns about the seagulls, the spinning bird deterrent on the sports centre roof was damaged in the gales at Easter and had to be repaired (a new ‘high wind’ vane was supplied at no cost).  Also we decided to move the deterrent on the main school to be nearer the location favoured by the seagulls.  This work was carried out in June, along with a complete clean of all the panels.

We have consulted other groups who have similar problems with bird fouling and the general consensus is that it is difficult to justify the relatively high cost of having the panels cleaned frequently, so that for most of the time the natural cleaning effect of rain and wind is judged to be adequate.  For the time being we have decided on a similar policy, although we will continue to monitor the panels regularly.

Chris Handel, Chair             John Willis, Secretary
Nick Owens, Treasurer        Juliet Merrifield, Director
Bec Hanley, Director            Darren Berman, Director