Agenda item

Gwent Crematorium Solar PV Lease Agreement


Carbon Reduction Assistant Manager – Mathew Preece


The Carbon Reduction Assistant Manager (MP) provided a presentation to the Committee in relation to the Welsh Community Energy Group (Egni Co-op) proposing to install solar panels on both flat and pitched  roofs at the Gwent Crematorium.


There is a requirement for the whole of the Welsh public sector to be de-carbonised by 2030. The installation of renewables such as solar panels is one of the best solutions to truly decarbonise any electricity that the site consumes.


Even though Gwent Crematorium is managed by the Joint Committee, Newport City Council are responsible for the carbon emissions from the building. Therefore, Newport City Council needs to come up with a strategy to decarbonise that site if the Council is to hit their target of becoming carbon neutral by 2030.


MP informed the Committee that Egni Co-op energy group approached Newport City Council back in 2018 with their proposal to install roof mounted solar panels on a number of their buildings. A business appraisal was carried out and this particular community ownership method was considered to be more effective than the Council doing it themselves internally.


Over the past 18 months, 27 sites have had roof mounted solar panel systems, increasing the energy generating capacity of Newport City Council, rising from 35kW to 2300kW. The Officer explained to give an idea of this scale; this would be 390 individual panels to 7000 panels. This was only possible by using this community energy model due to the lack of the Council’s internal resource to be able to manage that scale of work in such a short space of time.


The Arrangement

The Officer ran through the arrangement of the Community Energy Ownership Model and how it works.  Torfaen County Borough Council were the legal owners of the Crematorium and they would be required to grant a 21 year Lease for roof space to the energy community group. However, there would be a back-to-back agreement between Torfaen and Newport City Council, as the managers of the building, to comply with the landlord’s obligations in the lease and to indemnify Torfaen accordingly. A long-term Power Purchase Agreement would be put in place to sell power from the panels to Joint Committee at a favourable rate, which was guaranteed to be less that the current energy tariffs. Egni Co-op will undertake all maintenance for the 21-year period and cover the costs of all of the necessary insurances. If for some reason, the panels need to be removed for works during the 20-year period, Egni Co-op will pay for them to be taken down and re-instated during the term of the Lease. Once the 21-year Lease has finished, Egni Co-op can either transfer ownership of the installation to the Joint Committee or remove the installation at their cost. 


In doing so, the Joint Committee would receive the full benefit from the solar panels from that point.


There is an option to buy out the whole system during the Lease, if it is felt better value for money. It was noted that the Gwent Crematorium would be paying 10% below the day time tariff from the current energy provider for electricity generated by the solar panels.


The Project Team would oversee the installation of the roof solar panels at Gwent Crematorium as they have done with the 27 other Newport sites. The benefits would be carbon savings and financial savings, which would directly  benefit Newport City Council as they pay the bills for the Gwent Crematorium but that would reduce the operating costs to the Joint Committee and increase any profit share or distribution to the other authorities.


Egni Co-op – Community Organisation

Egni Co-op is a community organisation which funds and manages the installation of solar panels in Wales. Their main aim is to reduce carbon emissions, engage people in climate action and are not necessarily about making profit. They have over 3 megawatts on roofs  across Wales on a range of different buildings. That community group would manage the installation from a client’s perspective in terms of health and safety.


Proposal Design

MP presented the proposal design for the installation. It would be 99 solar panels with 50 power optimisers and 1 inverter. It would have a 36kWp array, the site could take more but they are restricted by the roof space. Two different roof types, which are flat and pitched so there will be a requirement for different mounting techniques.


Benefits of the Project

MP highlighted benefits from this project as the  Joint Committee could realise revenue savings for the site from year one, with guaranteed reduced electricity rates through the Power Purchase Agreement and at no cost to the joint committee for signing up.


It would class as permitted development as it is less than 0.5 hectares and would conform to the design requirements as listed in the Town and Country Planning Act.


The Officer also went into detail with regard to procurement and delivery of the installation, there would be an agreed contract variation on the existing contract between Newport City Council and Egni Co-op, Newport City Council would act as the contract manager and the have already vetted the installation partner. They have successfully delivered on other sites with Newport alongside other Welsh authorities. Lessons have also been learnt from previous installations to be utilised for this installation and also live data would be provided from the metering system to see how much carbon and financial savings have been made through the installation.


Risk Mitigations

In relation to the business case that was circulated to the committee, the officer discussed the risk mitigations.


Newport City Council has drafted the Lease to protect the landlord at all times, even to the point where there is a need for a roof repair/replacement. If this would be needed for the crematorium, the solar panel community energy group would pay for the removal and reinstatement of the panels in full for the repair to go ahead.


Another risk could be that if the site is demolished or sold, there is a requirement to buy out those panels as the energy group has no guarantee to sell the electricity back to the site if changed hands. The Committee was informed that this would be deemed a fairly small risk as there is no immediate plan to sell the Gwent Crematorium.


MP had previously discussed the risk of procurement challenge with senior officers and the Head of Law and Regulation. The consensus was that they do not feel there is a risk and that this can be dealt with as an extension and variation to the current contract.


Newport would effectively act on behalf of the Landlord and do the works required to allow the solar panel installation to go ahead. As it can be appreciated that Torfaen may not have the same access to the building if required. Newport would indemnify Torfaen against all liabilities under the Lease.


Environmental and Financial Perspectives

In summary, from an environmental perspective; allowing the solar panel installation would move the Joint Committee toward the target set by the Welsh Government in terms of renewable energy sectors, with renewable energy being in community ownership and in line for the 2030 public sector target both organisationally and nationally.


From a financial perspective, there is no cost to the joint committee for signing up as the system is owned and operated by the community energy group. The only cost to the committee would be by purchasing the renewable energy from the company, but this will be cheaper than the provider’s energy.


The officer explained that revenue savings would be seen from year 1 with guaranteed lower rates through the Power Purchase Agreement. Over twenty years this could come to circa £30,000. From year one they estimate the savings to be around £1800.


Due to the agreed contract variation, there would be a streamlined exercise for delivery for the end of this financial year.


The Chair opened up questions from the Committee for the Carbon Reduction Assistant Manager to answer on the matter.


The Committee asked the following:


·        Councillor Jeavons queried if there has been an assessment to determine if the roof is strong enough to take these panels.

The Carbon Reduction Assistant Manager confirmed there will be a structural survey done prior to the panels being installed. They are working in line with Newport Norse to ensure that no major repair work needs to be done before the installation. As this would be counter-productive for the initial repairs needed.


·      Councillor Evans asked if they are looking to charge the council on how much energy they use; how would the team know it would be competitive in the market, given the current situation with energy bill prices.


MP responded stating that there would be a guaranteed reduction on what the joint committee or site would be paying the regular electricity provider. For example, instead of paying EDF Energy 15 pence per unit of electricity usually from national grid, the council would be using the energy from the solar panels at a reduced rate, so they would be paying 14 pence, making a saving of 1 pence. That gets extrapolated throughout the year which could be a £2000 saving.


·        Councillor Evans commented that energy bill costs usually rise quarterly and unit costs. Would they stay fixed or go up?


MP explained that it would track what the unit rate is from the start of the financial year. For instance, if EDF would go up to 16p the following year due to inflation; there would be a saving of 0.6p.


Karl Donovan (Newport Norse) commented that they have commissioned a contractor to undertake investigative work on the repair of the roof. It will involve a scaffolding on each side of the crematorium. They will not know the full scale of what is wrong with the roof until inspected.



The Committee understood the importance of carbon reduction, and agreed to option 3 of the report.


They agreed to allow the solar panels installation and allow Newport City Council and Egni-co-op to deliver the scheme by the end of this financial year subject to the inspection of the roof being done beforehand.



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