The largest local authority owned solar farm in the UK, acquired for nearly £14.5 million, will be used to help protect the future of council services in Forest Heath.
The District Council has announced that after months of negotiations it has bought Greenheath Energy Ltd and with it the 12.4MW solar farm at Toggam Farm in Lakenheath.
The purchase has been made using capital – under local Government finance rules, councils are not allowed to use capital to plug annual funding gaps as eventually the money would simply disappear. Instead they can use the money to invest in projects which generate an annual income.
The solar farm will mean that even after the capital outlay has been recouped, based on current assumptions, the Council will still generate an additional income of at least £300,000 in the first year eventually rising to just over £700,000 per annum by around year 10 (of the 25 year project) in part through selling on the electricity generated to the National Grid.
The Council assessed the project on the basis of borrowing the finance – however based on current five year spending plans, this is unlikely in the short to medium term.
Cllr Stephen Edwards, Forest Heath’s Cabinet Member for Resources and Performance said: “This is not the first, but it is the biggest publically owned solar farm in the UK and it will produce enough electricity to power 3000 homes, plus cut the carbon footprint by the equivalent of 2000 cars.
“The way councils are financed is changing – our main Government grant will be scrapped by around 2020 and Council Tax doesn’t cover as much as people think. This means we have to look at new ways of investing to make money to pay for services.
“In the future, the solar farm could provide energy to West Suffolk councils’ offices and our leisure centres, helping us and our partners to save money on energy costs on top of the income it will bring in, while further down the line there may also be opportunities to benefit our communities as well, although this is dependent on the energy market.
“We plan to lobby the Government to relax charges over the generation and supply of energy to local markets. If successful that could allow us to offer our own branded tariffs to local businesses, providing them for the first time with stable energy supply costs, which in turn would help support local economic growth.
“We would also like to be able to offer something similar to the vulnerable members of our community and will continue to explore how we can overcome the barriers in the market, in order to make this a reality.”
The solar farm stands on 17.5 hectares and is made up of 47,748 panels, each measuring 1.6 by 1m and weighing 20kg.
Thomas Clayton, developer and director of Greenheath Ltd said: “We are delighted to announce the completion of the purchase of Greenheath Energy Ltd by Forest Heath District Council. The solar farm is up and running, producing renewable energy and will now be generating income to assist the council in continuing to provide excellent services.”
Lawyers from the Eversheds Clean Energy Group, one of the leading specialist international clean energy and sustainability teams, advised Forest Heath District Council in relation to its conditional acquisition of the 12.4MW solar farm. This involved detailed grid, regulatory and procurement advice in addition to deploying construction, real estate and corporate specialists. The Eversheds team advises developers in both the public and private sectors and advises across all technologies from solar, onshore and offshore wind to biomass, hydro, waste to energy and geothermal. Eversheds specialise in covering the full project lifecycle from securing bankable and marketable development assets to construction, financing, M&A and capital market exit solutions.
The Eversheds’ team was led by Corporate partner Charles Reynard with support from associate Philip Barratt (Corporate), senior associates James Shawe (Real Estate) and Clare Keates (Commercial), legal director Ross Campbell (Construction), principal associate Tim London (Public Sector) and associate Helen A’Bear (Corporate).
Charles Reynard commented: “It has been a real pleasure seeing the successful conclusion of a renewable energy project that Rachael Mann and her colleagues at Forest Heath District Council had the vision to decide to implement some 14 months ago. We have developed a close working relationship with Rachael and her team and we are delighted to have contributed to this successful outcome.”