PPA on a wind turbine

[Foregoneconclusion]

I have had sporadic contact with a company called Eocycle a Canadian based wind turbine company with a view to installing here..
My latest contact with them is below..

We are working towards the idea whereby Eocycle install the turbine free of charge (including planning and grid connection)


The landowner would sign a PPA (power purchase agreement) to purchase power produced by the turbine according to his need – no minimum amount

So when the turbine is producing power and the landowner needs the power he purchases it

If he does not need it the power just goes back to the grid

The PPA would be for 20 years – the design life of the turbine
The PPA would start at 8.5p kWh and increase the price of electric by 1.9% per annum which over 20 years gives a price increase of less than half the projected increase in the cost of power over the same period
The landowner would have no costs – maintenance and public liability insurance the responsibility of Eocycle
Eocycle would require a lease for the land the turbine stands on and reasonable rights of access for maintenance – the lease at a peppercorn rent £1 / year

How does this sound to you?
ends
SO.
They are looking for feedback on the principles and the terms plus the practical delivery of the PPA
Can you please provide some thoughts and critical analysis?

Thank you

 

[Old earwig]

I have had sporadic contact with a company called Eocycle a Canadian based wind turbine company with a view to installing here..
My latest contact with them is below..

We are working towards the idea whereby Eocycle install the turbine free of charge (including planning and grid connection)


The landowner would sign a PPA (power purchase agreement) to purchase power produced by the turbine according to his need – no minimum amount

So when the turbine is producing power and the landowner needs the power he purchases it

If he does not need it the power just goes back to the grid

The PPA would be for 20 years – the design life of the turbine
The PPA would start at 8.5p kWh and increase the price of electric by 1.9% per annum which over 20 years gives a price increase of less than half the projected increase in the cost of power over the same period
The landowner would have no costs – maintenance and public liability insurance the responsibility of Eocycle
Eocycle would require a lease for the land the turbine stands on and reasonable rights of access for maintenance – the lease at a peppercorn rent £1 / year

How does this sound to you?
ends
SO.
They are looking for feedback on the principles and the terms plus the practical delivery of the PPA
Can you please provide some thoughts and critical analysis?

Thank you

Interesting.... but...

Class 3 wind and shut off at 20m/sec so not good on a decent site. There is an long term issue relating to gust sizes being significantly higher in the UK than in the USA / Canada, hence a number of the problems with other turbines from there.
Who insures the set up wrt public liability etc and when they go bust who owns it and removes it and clears the site?

 

[GreenerGrass]

So the turbine is on your ground? Sounds terrible.

 

[Foregoneconclusion]

So the turbine is on your ground? Sounds terrible.

I guess if you don't like turbines then you wouldn't agree with one being on your land..? So the situation would not happen.

 

[multi power]

I think you would need to be getting the electric for half that price
And what about liability when they go bust?

 

[Princess Pooper]

I think you would need to be getting the electric for half that price
And what about liability when they go bust?

Make sure that they purchase a decommissioning bond or similar to cover site restoration. We had to do this as a condition of planning permission - and it's our bloody turbine!!!!!!

 

[Foregoneconclusion]

I think you would need to be getting the electric for half that price
And what about liability when they go bust?

Common theme here - going bust- good one . option to purchase? probably not much use if there are no spare parts i guess..

What's the rationale behind the lower price of leccy?

 

[Foregoneconclusion]

Make sure that they purchase a decommissioning bond or similar to cover site restoration. We had to do this as a condition of planning permission - and it's our bloody turbine!!!!!!

Good thinking..that becomes even more important if they go bust i suppose.

Presumably this model already exists in solar parks? The clear up and disposal costs when the panels reach the end of their lives would be significant.

 

[multi power]

Common theme here - going bust- good one . option to purchase? probably not much use if there are no spare parts i guess..

What's the rationale behind the lower price of leccy?

Well if they are putting their turbine in your field, basically rent free, you need to be properly compensated, and you are talking a fair bit of risk if they go bust, im not paying much more than 8.5 p kWh

 

[Foregoneconclusion]

Well if they are putting their turbine in your field, basically rent free, you need to be properly compensated, and you are talking a fair bit of risk if they go bust, im not paying much more than 8.5 p kWh

Fair point. I think they have taken a figure and just put it out there but it is roughly mid point between day rate and night rate on the open open market. I have no idea what they would get as feed in tarriff now but image it would be about 5p/kwh..

Good for you for getting such cheap leccy!

 

[GreenerGrass]

I guess if you don't like turbines then you wouldn't agree with one being on your land..? So the situation would not happen.

WRONG. We have a 250kw turbine and it returns us proper £. It's a terrible deal because they are offering you a pittance.

 

[Foregoneconclusion]

WRONG. We have a 250kw turbine and it returns us proper £. It's a terrible deal because they are offering you a pittance.

Oh I see where you are coming from.

Can you explain what the arrangement is that you have?

Did you pay for the turbine or was it installed by another, are you paying for the maintenance, end of life clear up and insurance?

I agree its not much in return but this is the beginning of the process of discussion as to how the PPA should be drawn up, it's not final atall; from that perspective Eocycle are looking for feedback and analysis of what they are cooking up.

I don't rate my chances of being able to put a turbine here in Lawrenny because of the National Park .. but it's a discussion worth having in my view simply from a cost and energy security perspective.

Thanks for the feedback

 

[GreenerGrass]

How much electricity are you using and how big is the turbine? Our deal isn't comparable as we built ourself and I wasn't trying to compare, but but from where I'm sitting I really can't see that they are offering much at all. We export our electricity for 5.5p/unit so even on them selling it to you they are making a margin. If I were you I would want some form of fixed income any electricity is on top.

 

[Foregoneconclusion]

Oh these are small turbines..22kw or 25kw

We could use all the output locally eventually but at least 50%. Our site isn't brilliant as we would have to keep blade tip below 25 metres ..but estimated yield is between 60,000 and 75,000kwh

I would expect all up cost would be about 100k but don't really know cost of planning or footings.

I'm looking at it from the perspective of keeping leccy costs down but i suppose eocyle investors are looking at it from a perspective of getting a better investment return than putting loot in the bank.

But yes. A fixed income as an "opportunity fee" would be a good idea.

 

[Princess Pooper]

re: energy security, whilst it is nice to know you have it available, if the turbines are connected to the grid then they automatically shut down if there is a local grid fault. So if there is a power outage they are not allowed to operate. If they are off grid then they can.

 

[Foregoneconclusion]

re: energy security, whilst it is nice to know you have it available, if the turbines are connected to the grid then they automatically shut down if there is a local grid fault. So if there is a power outage they are not allowed to operate. If they are off grid then they can.

Yes. Thats true I didn't really explain myself properly there.. I guess what I meant by security of supply was more a case of securing supply from sustainable resources..

 

[Exfarmer]

I am really staggered you have not grabbed at the chance, NOT!
What is in it for you?
Plenty of people are buying there electric for this price today and you are tied into a never ending increase in power cost, which the market may not reflect.
You will have no option of declining their power unless you put in a second meter.
The very least I would want is to pay the max they can sell it into the grid for currently 4-5.5p
Secondly a rent reflecting the value of the land the turbine sits on and thirdly a buyers option to purchase the turbine at the end of the lease for £1.00 or they are to clear site at their cost

 

[Foregoneconclusion]

Hi Ex..

This isn't an offer being made to me , it is a wind turbine company coming up with a deal that they think may gain some traction in the market place and asking my opinion of it. You guys are doing exactly what i hoped you would do and rip into it. I am a complete newbie to this but have expressed an interest in having a turbine at some point..

Thankyou for the comments

 

[DaveGrohl]

I'm late to the party but if you'll excuse my French, wtf? I nearly spat my supper out when you said 25kW.

I'm surprised there's a company still looking at putting up small turbines like these. Ther's no room for profit at all and it sounds like they are trying it on with whoever will bite. 8.5p is worthless as an enticement, and as already pointed out they are using you or whoever as a margin generator to try to make their project viable. The absolute minimum that anyone should even start from considering it is for there to be a decent rent every year.

Sounds like they've come up with this scheme because they think someone will just say yeah go right ahead because they can't be bothered to actually do some research. Just tell them politely to do one.

 

[Foregoneconclusion]

D

I'm late to the party but if you'll excuse my French, wtf? I nearly spat my supper out when you said 25kW.

I'm surprised there's a company still looking at putting up small turbines like these. Ther's no room for profit at all and it sounds like they are trying it on with whoever will bite. 8.5p is worthless as an enticement, and as already pointed out they are using you or whoever as a margin generator to try to make their project viable. The absolute minimum that anyone should even start from considering it is for there to be a decent rent every year.

Sounds like they've come up with this scheme because they think someone will just say yeah go right ahead because they can't be bothered to actually do some research. Just tell them politely to do one.

Hi DG.
Apologies for inducing an involuntary supper ejection.
Site rent is clearly a priority here that this embryonic Ppa has not allowed for.
Judging by the discussion on another thread this too is a challenging area of debate.
I think the p/kW needs some work as does the escalator mechanism. it is worth noting that there is no insistence in their draft proposal to buy the leccy from the turbine.
I believe that the size of the turbine offered is ideal for our situation as for me it's not so much about FIT harvesting and more about generating power locally and sustainably. Others may also take this view..Also we are in a national park where turbine heights are severely restricted. This despite the fact that I can see well over a dozen hewge turbines in every direction from my farm.
That said it's not a commentary on the profitability of the exercise. Which is also a consideration.
Important matters of access roads, grid connection site, liability for every occasion need costing clearly.

Great feedback so far. Many thanks. Eocycle, if you are watching this thread is think you can see there's a bit of work to do!