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Renewable Options Report Final (2)

J
Jacob Dent

The document analyzes the feasibility of installing wind turbines and solar panels at Puffin's new cold storage site to reduce energy costs and carbon footprint. It evaluates installing a 100kW Norvento wind turbine with a 36m tower and 24m blades. Simple cash flows show it would generate 258,717 kWh annually, saving over £46,000 per year in electricity costs. Over 20 years it would have a cumulative positive NPV of over £466,000. Solar options and payback periods are also analyzed for roof mounting.

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Renewable Options Report Final (2)
2 Contents List of Figures...........................................................................................................................................3 List of Graphs ...........................................................................................................................................3 List of Tables ............................................................................................................................................3 Acronyms .................................................................................................................................................3 Introduction.............................................................................................................................................4 Wind.........................................................................................................................................................4 Norvento nED 100 kW (24m blade diameter).....................................................................................6 Simple Cash flow for Norvento nED 100 .........................................................................................7 Discounted Cash flow – Scenario 1..................................................................................................8 Discounted Cash flow – Scenario 2..................................................................................................9 Endurance E3120 50 kW (19.2m blade diameter).............................................................................10 Simple Cash flow for Endurance E3120.........................................................................................11 Discounted Cash flow – Scenario 1................................................................................................12 Discounted Cash flow – Scenario 2................................................................................................13 Summary............................................................................................................................................14 Solar Photovoltaics ................................................................................................................................15 Maximising roof area 123kW nominal power – Monocrystalline cells.............................................15 Simple Cash flow for 123kW Monocrystalline PV array................................................................18 Discounted Cash flow – Scenario 1................................................................................................19 Discounted Cash flow – Scenario 2................................................................................................20 50kW nominal power – Monocrystalline cells ..................................................................................21 Simple Cash flow for 50kW Monocrystalline PV array ..................................................................23 Discounted Cash flow – Scenario 1................................................................................................24 Discounted Cash flow – Scenario 2................................................................................................25 Summary............................................................................................................................................26 CHP / Heat Recovery..............................................................................................................................27 Conclusion..............................................................................................................................................27 Appendix................................................................................................................................................28
3 List of Figures Figure 1. Proposed site location ..............................................................................................................5 Figure 2. Left, Norvento 100kW. Right, Endurance 50kW.....................................................................14 Figure 3. Warehouse rooftop PV ...........................................................................................................26 List of Graphs Graph 1. Power Curve of Norvento nED 100 Wind Turbine....................................................................6 Graph 2. Power Curve of Endurance E3120 Wind Turbine ...................................................................10 Graph 3. System Outputs & Incomes (123kW Array)............................................................................17 Graph 4. System Outputs & Incomes (50kW Array)..............................................................................22 List of Tables Table 1. Wind turbine tariffs (April 2016)................................................................................................5 Table 2. PV tariffs (April 2016)...............................................................................................................15 Table 3. 123kW system output..............................................................................................................16 Table 4. 50 kW System...........................................................................................................................21 Table 5. Best cases for Wind and PV .....................................................................................................28 Acronyms FiT – Feed-in tariff ROI – Return on investment RHI – Renewable heat incentive IRR – Internal rate of return AMSL – Above mean sea level CHP – Combined heat and power AGL – Above ground level DNO – Distribution Network Operator PV – Photovoltaics ROC’s – Renewable Obligation Certificates NPV – Net present value
4 Introduction With Puffin expanding year on year, it’s inevitable the energy consumptions will rise. Finding technologies that help reduce energy demand and increase efficiency is important for the company. This is true in terms of saving money but also to reduce the overall carbon footprint because the value of having a green image is becoming increasingly significant. Both from the retail and consumer point of view. The lack of committed government policy plans for renewable energy has meant incentives such as the feed in tariff (FiT) and renewable heat incentive (RHI) have been drastically cut recently. However projects may still be viable if a large proportion of energy can be consumed on site. The main and new cold store sites both have good grid connections and accessibility with 11 KVA substations. According to the Western Power distribution generation map, the main site has about 1 MW of spare capacity and the new cold store site 1.8 MW. In order to connect to the grid, a formal application has to be made. The Distribution Network Operator (DNO) will then be in touch to find the most cost effective grid connection method. It can take up to 65 working days to get a formal offer from a DNO, though some are quicker. Wind The new cold store site identified below in Figure 1 is under the Inner Horizontal Surface for the Haverfordwest Aerodrome which means the height can’t exceed 86m above mean sea level (AMSL). Since the ground level in this area is around 35m AMSL (according to OS data), a wind turbine of under 50m above ground level (AGL) to tip should be ok. Typical tower heights for turbines ranging from 50 to 800 kW are around 24m, 30m, 36m, 40m, 50m, 60m and 75m. This means the maximum possible hub height for the area is 36m with 28m diameter blades. The Norvento 100 kW turbine falls into this category, having available tower heights of 24.5m, 29.5m and 36m with either 22 or 24m diameter blades and could suit well. Going for the tallest tower permissible is advantageous since wind speed increases with distance from the ground. Roughly for each 1m increase in hub height of a farm wind turbine the annual energy production increases by 0.5%. Therefore it is always financially better to opt for the highest tower available, provided you can get planning consent. Interpolating wind speeds from the NOABL wind database between 25 and 45m AGL has shown the site has a wind speed of roughly 5.92 m/s at 36m AGL.
5 Wind Installation Size Feed-in Tariff (from April 2016) Export Tariff 0-50 kW 8.46 p/kWh 4.91 p/kWh 50-100 kW 7.61 p/kWh 4.91 p/kWh 100-1500 kW 4.89 p/kWh 4.91 p/kWh > 1500 kW 0.85 p/kWh 4.91 p/kWh Table 1. Wind turbine tariffs (April 2016) Figure 1. Proposed site location
6 Norvento nED 100 kW (24m blade diameter) Assumptions Net annual power output (kWh) 258,717 Electricity Price (£/kWh) £ 0.1045 Annual O+M Costs £ 4,800 Capital Cost £ 330,000 Fit Tariff (£/kWh) £ 0.0761 Export Tariff (£/kWh) £ 0.0491 Electricity Consumed on site Est (kWh) 1,021,488 Electricity to export (kWh) 0 Electrical losses expressed as efficiency 0.95 Turbine availability factor 0.95 Capacity factor 29.5% Mean Wind speed @ 36m agl (m/s) 5.92 Graph 1. Power Curve of Norvento nED 100 Wind Turbine
7 Simple Cash flow for Norvento nED 100 Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £ 330,000 £ 0 -£ 330,000 -£330,000 1 £ 4,800 £ 46,724 £ 41,924 -£288,076 2 £ 4,800 £ 46,724 £ 41,924 -£246,151 3 £ 4,800 £ 46,724 £ 41,924 -£204,227 4 £ 4,800 £ 46,724 £ 41,924 -£162,303 5 £ 4,800 £ 46,724 £ 41,924 -£120,379 6 £ 4,800 £ 46,724 £ 41,924 -£78,454 7 £ 4,800 £ 46,724 £ 41,924 -£36,530 8 £ 4,800 £ 46,724 £ 41,924 £5,394 9 £ 4,800 £ 46,724 £ 41,924 £47,319 10 £ 4,800 £ 46,724 £ 41,924 £89,243 11 £ 4,800 £ 46,724 £ 41,924 £131,167 12 £ 4,800 £ 46,724 £ 41,924 £173,091 13 £ 4,800 £ 46,724 £ 41,924 £215,016 14 £ 4,800 £ 46,724 £ 41,924 £256,940 15 £ 4,800 £ 46,724 £ 41,924 £298,864 16 £ 4,800 £ 46,724 £ 41,924 £340,789 17 £ 4,800 £ 46,724 £ 41,924 £382,713 18 £ 4,800 £ 46,724 £ 41,924 £424,637 19 £ 4,800 £ 46,724 £ 41,924 £466,562 20 £ 4,800 £ 46,724 £ 41,924 £508,486 Payback 8 Years ROI 54.1% Profit after 20 years £ 508,486 IRR 11.2%
8 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Payback 9 Years ROI 54.1% Profit after 20 years £ 323,565 IRR 8.5% Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £330,000 £0 -£330,000 1.000 -£330,000 -£330,000 1 £4,800 £46,724 £41,924 0.976 £40,902 -£289,098 2 £4,800 £46,724 £41,924 0.952 £39,904 -£249,194 3 £4,800 £46,724 £41,924 0.929 £38,931 -£210,263 4 £4,800 £46,724 £41,924 0.906 £37,981 -£172,282 5 £4,800 £46,724 £41,924 0.884 £37,055 -£135,227 6 £4,800 £46,724 £41,924 0.862 £36,151 -£99,076 7 £4,800 £46,724 £41,924 0.841 £35,269 -£63,806 8 £4,800 £46,724 £41,924 0.821 £34,409 -£29,397 9 £4,800 £46,724 £41,924 0.801 £33,570 £4,173 10 £4,800 £46,724 £41,924 0.781 £32,751 £36,924 11 £4,800 £46,724 £41,924 0.762 £31,952 £68,876 12 £4,800 £46,724 £41,924 0.744 £31,173 £100,049 13 £4,800 £46,724 £41,924 0.725 £30,413 £130,462 14 £4,800 £46,724 £41,924 0.708 £29,671 £160,133 15 £4,800 £46,724 £41,924 0.690 £28,947 £189,080 16 £4,800 £46,724 £41,924 0.674 £28,241 £217,322 17 £4,800 £46,724 £41,924 0.657 £27,552 £244,874 18 £4,800 £46,724 £41,924 0.641 £26,880 £271,755 19 £4,800 £46,724 £41,924 0.626 £26,225 £297,979 20 £4,800 £46,724 £41,924 0.610 £25,585 £323,565
9 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £330,000 £0 -£330,000 1.000 -£330,000 -£330,000 1 £4,800 £46,724 £41,924 0.962 £40,312 -£289,688 2 £4,800 £46,724 £41,924 0.925 £38,761 -£250,927 3 £4,800 £46,724 £41,924 0.889 £37,271 -£213,656 4 £4,800 £46,724 £41,924 0.855 £35,837 -£177,819 5 £4,800 £46,724 £41,924 0.822 £34,459 -£143,361 6 £4,800 £46,724 £41,924 0.790 £33,133 -£110,227 7 £4,800 £46,724 £41,924 0.760 £31,859 -£78,368 8 £4,800 £46,724 £41,924 0.731 £30,634 -£47,734 9 £4,800 £46,724 £41,924 0.703 £29,455 -£18,279 10 £4,800 £46,724 £41,924 0.676 £28,323 £10,044 11 £4,800 £46,724 £41,924 0.650 £27,233 £37,277 12 £4,800 £46,724 £41,924 0.625 £26,186 £63,463 13 £4,800 £46,724 £41,924 0.601 £25,179 £88,641 14 £4,800 £46,724 £41,924 0.577 £24,210 £112,851 15 £4,800 £46,724 £41,924 0.555 £23,279 £136,131 16 £4,800 £46,724 £41,924 0.534 £22,384 £158,514 17 £4,800 £46,724 £41,924 0.513 £21,523 £180,037 18 £4,800 £46,724 £41,924 0.494 £20,695 £200,732 19 £4,800 £46,724 £41,924 0.475 £19,899 £220,631 20 £4,800 £46,724 £41,924 0.456 £19,134 £239,765 Payback 10 Years ROI 54.1% Profit after 20 years £ 239,765 IRR 6.9%
10 Endurance E3120 50 kW (19.2m blade diameter) Assumptions Net annual power output (kWh) 150,545 Electricity Price (£/kWh) £ 0.1045 Annual O+M Costs £ 3,500 Capital Cost £ 320,000 Fit Tariff (£/kWh) £ 0.0846 Export Tariff (£/kWh) £ 0.0491 Electricity Consumed on site Est (kWh) 1,021,488 Electricity to export (kWh) 0 Electrical losses expressed as efficiency 0.95 Turbine availability factor 0.95 Capacity factor 34.4% Mean Wind speed @ 36m agl (m/s) 5.92 0 10 20 30 40 50 60 70 0 5 10 15 20 25 30 PowerOutput(kW) Wind Speed (m/s) Endurance E3120 Graph 2. Power Curve of Endurance E3120 Wind Turbine
11 Simple Cash flow for Endurance E3120 Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £320,000 £0 -£320,000 -£320,000 1 £3,500 £28,468 £24,968 -£295,032 2 £3,500 £28,468 £24,968 -£270,064 3 £3,500 £28,468 £24,968 -£245,096 4 £3,500 £28,468 £24,968 -£220,128 5 £3,500 £28,468 £24,968 -£195,160 6 £3,500 £28,468 £24,968 -£170,192 7 £3,500 £28,468 £24,968 -£145,224 8 £3,500 £28,468 £24,968 -£120,256 9 £3,500 £28,468 £24,968 -£95,287 10 £3,500 £28,468 £24,968 -£70,319 11 £3,500 £28,468 £24,968 -£45,351 12 £3,500 £28,468 £24,968 -£20,383 13 £3,500 £28,468 £24,968 £4,585 14 £3,500 £28,468 £24,968 £29,553 15 £3,500 £28,468 £24,968 £54,521 16 £3,500 £28,468 £24,968 £79,489 17 £3,500 £28,468 £24,968 £104,457 18 £3,500 £28,468 £24,968 £129,425 19 £3,500 £28,468 £24,968 £154,393 20 £3,500 £28,468 £24,968 £179,361 Payback 13 Years ROI - 43.9% Profit after 20 years £ 179,361 IRR 4.7%
12 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Payback 16 Years ROI -43.9% Profit after 20 years £ 69,231 IRR 2.1% Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £320,000 £0 -£320,000 1.000 -£320,000 -£320,000 1 £3,500 £28,468 £24,968 0.976 £24,359 -£295,641 2 £3,500 £28,468 £24,968 0.952 £23,765 -£271,876 3 £3,500 £28,468 £24,968 0.929 £23,185 -£248,691 4 £3,500 £28,468 £24,968 0.906 £22,620 -£226,071 5 £3,500 £28,468 £24,968 0.884 £22,068 -£204,003 6 £3,500 £28,468 £24,968 0.862 £21,530 -£182,473 7 £3,500 £28,468 £24,968 0.841 £21,005 -£161,468 8 £3,500 £28,468 £24,968 0.821 £20,492 -£140,976 9 £3,500 £28,468 £24,968 0.801 £19,993 -£120,983 10 £3,500 £28,468 £24,968 0.781 £19,505 -£101,478 11 £3,500 £28,468 £24,968 0.762 £19,029 -£82,449 12 £3,500 £28,468 £24,968 0.744 £18,565 -£63,884 13 £3,500 £28,468 £24,968 0.725 £18,112 -£45,771 14 £3,500 £28,468 £24,968 0.708 £17,671 -£28,101 15 £3,500 £28,468 £24,968 0.690 £17,240 -£10,861 16 £3,500 £28,468 £24,968 0.674 £16,819 £5,958 17 £3,500 £28,468 £24,968 0.657 £16,409 £22,367 18 £3,500 £28,468 £24,968 0.641 £16,009 £38,376 19 £3,500 £28,468 £24,968 0.626 £15,618 £53,994 20 £3,500 £28,468 £24,968 0.610 £15,237 £69,231
13 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £320,000 £0 -£320,000 1.000 -£320,000 -£320,000 1 £3,500 £28,468 £24,968 0.962 £24,008 -£295,992 2 £3,500 £28,468 £24,968 0.925 £23,084 -£272,908 3 £3,500 £28,468 £24,968 0.889 £22,197 -£250,711 4 £3,500 £28,468 £24,968 0.855 £21,343 -£229,369 5 £3,500 £28,468 £24,968 0.822 £20,522 -£208,847 6 £3,500 £28,468 £24,968 0.790 £19,733 -£189,114 7 £3,500 £28,468 £24,968 0.760 £18,974 -£170,140 8 £3,500 £28,468 £24,968 0.731 £18,244 -£151,896 9 £3,500 £28,468 £24,968 0.703 £17,542 -£134,354 10 £3,500 £28,468 £24,968 0.676 £16,868 -£117,487 11 £3,500 £28,468 £24,968 0.650 £16,219 -£101,268 12 £3,500 £28,468 £24,968 0.625 £15,595 -£85,673 13 £3,500 £28,468 £24,968 0.601 £14,995 -£70,678 14 £3,500 £28,468 £24,968 0.577 £14,418 -£56,259 15 £3,500 £28,468 £24,968 0.555 £13,864 -£42,395 16 £3,500 £28,468 £24,968 0.534 £13,331 -£29,065 17 £3,500 £28,468 £24,968 0.513 £12,818 -£16,247 18 £3,500 £28,468 £24,968 0.494 £12,325 -£3,922 19 £3,500 £28,468 £24,968 0.475 £11,851 £7,929 20 £3,500 £28,468 £24,968 0.456 £11,395 £19,324 Payback 19 Years ROI -43.9% Profit after 20 years £ 19,324 IRR 0.6%
14 Summary As seen above it would be best to go for the 100kW turbine if planning permits since the masts of both turbines are 36m and hence capital costs incurred are similar. Yet the nED 100 has an annual energy production of about 1.7 times that of the Endurance. This makes it significantly more economically viable. Measures Norvento nED 100 Endurance E3120 Payback (simple) 8 Years 13 Years ROI (simple) 54.1% -43.9% IRR (simple) 11.2% 4.7% Profit after 20 years £ 508,486 £ 179,361 Figure 2. Left, Norvento 100kW. Right, Endurance 50kW
15 Solar Photovoltaics The new cold store site has roofs facing nearly directly south (azimuth 177°) and have no shading on them, making it ideal for PV. Each cold store has roughly 760 m² of south facing roof area. The 3 most common types of PV cells on the market are monocrystalline, polycrystalline and thin film. Monocrystalline cells are most efficient and therefore most space efficient. Although they are more expensive compared to polycrystalline because of the purer silicon. In addition they last the longest – up to 25 years. Polycrystalline is cheaper but less efficient than monocrystalline and so will require more cells for the same given power output. Thin film is an emerging technology so are quite expensive and not that efficient but their flexible nature is leading to many new applications. Calculations have been based of power outputs from monocrystalline cells. Maximising roof area 123kW nominal power – Monocrystalline cells PV Installation Size Feed-in Tariff (from April 2016) Export Tariff 0-10 kW 4.32 p/kWh 4.91 p/kWh 10-50 kW 4.53 p/kWh 4.91 p/kWh 50-250 kW 2.38 p/kWh 4.91 p/kWh 250-1000 kW 1.99 p/kWh 4.91 p/kWh Table 2. PV tariffs (April 2016) Assumptions Store Length (m) 71.4 Store Width (m) 21.4 Pitch (°) 25 Area (m²) 760 Nominal power (kW) 123 Cost/ kW installed (50-250 kW) £ 1,100 O&M Cost/ kW £ 12 Inverter Cost (3x50 kW) £ 11,064
16 Month New Cold store Consumption (2015) (kWh) System Output (kWh) Generation Tariff Electric Savings January 34649 5123 £ 122 £ 535 February 25343 7345 £ 175 £ 768 March 24429 13289 £ 316 £ 1,389 April 29381 16960 £ 404 £ 1,772 May 31014 18592 £ 442 £ 1,943 June 32310 18645 £ 444 £ 1,948 July 33644 18081 £ 430 £ 1,889 August 32974 16048 £ 382 £ 1,677 September 47535 13921 £ 331 £ 1,455 October 102383 9178 £ 218 £ 959 November 31922 6052 £ 144 £ 632 December 85160 4215 £ 100 £ 440 Total 510744 147449 £ 3,509 £ 15,408 Table 3. 123kW system output
17 As seen above, summer months May, June and July produce the most energy as expected. Graph 3 also highlights that most of the total income generated comes from the electricity savings and not the FiT income. £- £500.00 £1,000.00 £1,500.00 £2,000.00 £2,500.00 £3,000.00 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 Inccome SystemOutput(kWh) Monthly System Output & Income of 123kW Monocrystalline Array System Output (kWh) Electricity Savings FiT Generation Income Total Income Graph 3. System Outputs & Incomes (123kW Array)
18 Simple Cash flow for 123kW Monocrystalline PV array Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £146,364 £0 -£146,364 -£146,364 1 £1,476 £18,918 £17,442 -£128,922 2 £1,476 £18,918 £17,442 -£111,481 3 £1,476 £18,918 £17,442 -£94,039 4 £1,476 £18,918 £17,442 -£76,597 5 £1,476 £18,918 £17,442 -£59,155 6 £1,476 £18,918 £17,442 -£41,714 7 £1,476 £18,918 £17,442 -£24,272 8 £1,476 £18,918 £17,442 -£6,830 9 £1,476 £18,918 £17,442 £10,611 10 £1,476 £18,918 £17,442 £28,053 11 £1,476 £18,918 £17,442 £45,495 12 £1,476 £18,918 £17,442 £62,936 13 £1,476 £18,918 £17,442 £80,378 14 £1,476 £18,918 £17,442 £97,820 15 £1,476 £18,918 £17,442 £115,262 16 £1,476 £18,918 £17,442 £132,703 17 £1,476 £18,918 £17,442 £150,145 18 £1,476 £18,918 £17,442 £167,587 19 £1,476 £18,918 £17,442 £185,028 20 £1,476 £18,918 £17,442 £202,470 Payback 9 Years ROI 38.3% Profit after 20 years £ 202,470 IRR 10.2%
19 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £146,364 £0 -£146,364 1.000 -£146,364 -£146,364 1 £1,476 £18,918 £17,442 0.976 £17,016 -£129,348 2 £1,476 £18,918 £17,442 0.952 £16,601 -£112,746 3 £1,476 £18,918 £17,442 0.929 £16,196 -£96,550 4 £1,476 £18,918 £17,442 0.906 £15,801 -£80,749 5 £1,476 £18,918 £17,442 0.884 £15,416 -£65,333 6 £1,476 £18,918 £17,442 0.862 £15,040 -£50,293 7 £1,476 £18,918 £17,442 0.841 £14,673 -£35,620 8 £1,476 £18,918 £17,442 0.821 £14,315 -£21,305 9 £1,476 £18,918 £17,442 0.801 £13,966 -£7,339 10 £1,476 £18,918 £17,442 0.781 £13,625 £6,287 11 £1,476 £18,918 £17,442 0.762 £13,293 £19,580 12 £1,476 £18,918 £17,442 0.744 £12,969 £32,549 13 £1,476 £18,918 £17,442 0.725 £12,653 £45,201 14 £1,476 £18,918 £17,442 0.708 £12,344 £57,545 15 £1,476 £18,918 £17,442 0.690 £12,043 £69,588 16 £1,476 £18,918 £17,442 0.674 £11,749 £81,338 17 £1,476 £18,918 £17,442 0.657 £11,463 £92,800 18 £1,476 £18,918 £17,442 0.641 £11,183 £103,983 19 £1,476 £18,918 £17,442 0.626 £10,910 £114,893 20 £1,476 £18,918 £17,442 0.610 £10,644 £125,538 Payback 10 Years ROI 38.3% Profit after 20 years £ 125,538 IRR 7.5%
20 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £146,364 £0 -£146,364 1.000 -£146,364 -£146,364 1 £1,476 £18,918 £17,442 0.962 £16,771 -£129,593 2 £1,476 £18,918 £17,442 0.925 £16,126 -£113,467 3 £1,476 £18,918 £17,442 0.889 £15,506 -£97,962 4 £1,476 £18,918 £17,442 0.855 £14,909 -£83,052 5 £1,476 £18,918 £17,442 0.822 £14,336 -£68,717 6 £1,476 £18,918 £17,442 0.790 £13,784 -£54,932 7 £1,476 £18,918 £17,442 0.760 £13,254 -£41,678 8 £1,476 £18,918 £17,442 0.731 £12,744 -£28,933 9 £1,476 £18,918 £17,442 0.703 £12,254 -£16,679 10 £1,476 £18,918 £17,442 0.676 £11,783 -£4,896 11 £1,476 £18,918 £17,442 0.650 £11,330 £6,434 12 £1,476 £18,918 £17,442 0.625 £10,894 £17,328 13 £1,476 £18,918 £17,442 0.601 £10,475 £27,803 14 £1,476 £18,918 £17,442 0.577 £10,072 £37,875 15 £1,476 £18,918 £17,442 0.555 £9,685 £47,560 16 £1,476 £18,918 £17,442 0.534 £9,312 £56,872 17 £1,476 £18,918 £17,442 0.513 £8,954 £65,826 18 £1,476 £18,918 £17,442 0.494 £8,610 £74,436 19 £1,476 £18,918 £17,442 0.475 £8,279 £82,714 20 £1,476 £18,918 £17,442 0.456 £7,960 £90,674 Payback 11 Years ROI 38.3% Profit after 20 years £ 90,674 IRR 6.0%
21 50kW nominal power – Monocrystalline cells Capping the nominal power at 50 kW means you can receive the higher FiT rate. Assumptions Nominal power (kW) 50 Cost/ kW installed (10-50 kW) £ 1,134 O&M Cost/ kW £ 12 Inverter Cost (50 kW) £ 3,688 Month New Cold store Consumption (2015) (kWh) System Output (kWh) Generation Tariff Electric Savings January 34649 1934 £ 88 £ 202 February 25343 2825 £ 128 £ 295 March 24429 5207 £ 236 £ 544 April 29381 6786 £ 307 £ 709 May 31014 7576 £ 343 £ 792 June 32310 7639 £ 346 £ 798 July 33644 7399 £ 335 £ 773 August 32974 6484 £ 294 £ 678 September 47535 5504 £ 249 £ 575 October 102383 3561 £ 161 £ 372 November 31922 2289 £ 104 £ 239 December 85160 1588 £ 72 £ 166 Total 510744 58792 £ 2,663 £ 6,144 Table 4. 50 kW System
22 £- £200.00 £400.00 £600.00 £800.00 £1,000.00 £1,200.00 £1,400.00 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Inccome SystemOutput(kWh) Monthly System Output & Income of 50kW Monocrystalline Array System Output (kWh) Electricity Savings FiT Generation Income Total Income Graph 4. System Outputs & Incomes (50kW Array)
23 Simple Cash flow for 50kW Monocrystalline PV array Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £60,388 £0 -£60,388 -£60,388 1 £600 £8,807 £8,207 -£52,181 2 £600 £8,807 £8,207 -£43,974 3 £600 £8,807 £8,207 -£35,767 4 £600 £8,807 £8,207 -£27,560 5 £600 £8,807 £8,207 -£19,353 6 £600 £8,807 £8,207 -£11,146 7 £600 £8,807 £8,207 -£2,939 8 £600 £8,807 £8,207 £5,268 9 £600 £8,807 £8,207 £13,475 10 £600 £8,807 £8,207 £21,682 11 £600 £8,807 £8,207 £29,889 12 £600 £8,807 £8,207 £38,096 13 £600 £8,807 £8,207 £46,304 14 £600 £8,807 £8,207 £54,511 15 £600 £8,807 £8,207 £62,718 16 £600 £8,807 £8,207 £70,925 17 £600 £8,807 £8,207 £79,132 18 £600 £8,807 £8,207 £87,339 19 £600 £8,807 £8,207 £95,546 20 £600 £8,807 £8,207 £103,753 Payback 8 Years ROI 71.8% Profit after 20 years £ 103,753 IRR 12.2%
24 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £60,388 £0 -£60,388 1.000 -£60,388 -£60,388 1 £600 £8,807 £8,207 0.976 £8,007 -£52,381 2 £600 £8,807 £8,207 0.952 £7,812 -£44,570 3 £600 £8,807 £8,207 0.929 £7,621 -£36,948 4 £600 £8,807 £8,207 0.906 £7,435 -£29,513 5 £600 £8,807 £8,207 0.884 £7,254 -£22,259 6 £600 £8,807 £8,207 0.862 £7,077 -£15,183 7 £600 £8,807 £8,207 0.841 £6,904 -£8,278 8 £600 £8,807 £8,207 0.821 £6,736 -£1,542 9 £600 £8,807 £8,207 0.801 £6,572 £5,029 10 £600 £8,807 £8,207 0.781 £6,411 £11,441 11 £600 £8,807 £8,207 0.762 £6,255 £17,696 12 £600 £8,807 £8,207 0.744 £6,102 £23,798 13 £600 £8,807 £8,207 0.725 £5,954 £29,751 14 £600 £8,807 £8,207 0.708 £5,808 £35,560 15 £600 £8,807 £8,207 0.690 £5,667 £41,226 16 £600 £8,807 £8,207 0.674 £5,528 £46,755 17 £600 £8,807 £8,207 0.657 £5,394 £52,149 18 £600 £8,807 £8,207 0.641 £5,262 £57,411 19 £600 £8,807 £8,207 0.626 £5,134 £62,544 20 £600 £8,807 £8,207 0.610 £5,009 £67,553 Payback 9 Years ROI 71.8% Profit after 20 years £ 67,553 IRR 9.5%
25 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £60,388 £0 -£60,388 1.000 -£60,388 -£60,388 1 £600 £8,807 £8,207 0.962 £7,891 -£52,497 2 £600 £8,807 £8,207 0.925 £7,588 -£44,909 3 £600 £8,807 £8,207 0.889 £7,296 -£37,613 4 £600 £8,807 £8,207 0.855 £7,015 -£30,597 5 £600 £8,807 £8,207 0.822 £6,746 -£23,852 6 £600 £8,807 £8,207 0.790 £6,486 -£17,366 7 £600 £8,807 £8,207 0.760 £6,237 -£11,129 8 £600 £8,807 £8,207 0.731 £5,997 -£5,132 9 £600 £8,807 £8,207 0.703 £5,766 £634 10 £600 £8,807 £8,207 0.676 £5,544 £6,178 11 £600 £8,807 £8,207 0.650 £5,331 £11,510 12 £600 £8,807 £8,207 0.625 £5,126 £16,636 13 £600 £8,807 £8,207 0.601 £4,929 £21,565 14 £600 £8,807 £8,207 0.577 £4,739 £26,304 15 £600 £8,807 £8,207 0.555 £4,557 £30,861 16 £600 £8,807 £8,207 0.534 £4,382 £35,243 17 £600 £8,807 £8,207 0.513 £4,213 £39,456 18 £600 £8,807 £8,207 0.494 £4,051 £43,507 19 £600 £8,807 £8,207 0.475 £3,895 £47,403 20 £600 £8,807 £8,207 0.456 £3,746 £51,148 Payback 9 Years ROI 71.8% Profit after 20 years £ 51,148 IRR 7.9%
26 Summary As seen above the 123 kW system returns the greatest profit after 20 years but it’s the 50 kW system that has a significantly higher return on investment and a shorter payback period due to the higher FiT rate. However further investigation is needed to obtain more accurate figures for capital and O&M costs. Measures 123 kW System 50 kW System Payback (simple) 9 Years 8 Years ROI (simple) 38.3% 71.8% IRR (simple) 10.2% 12.2% Profit after 20 years £ 202,470 £ 103,753 Figure 3. Warehouse rooftop PV
27 CHP / Heat Recovery Since 19,350 litres of oil were used at 39 p/litre in 2015 for heating, it may be worth looking into combined heat and power (CHP) or getting a biomass boiler for space heating the offices and factory/ warming room. CHP is the simultaneous generation of heat and power from the combustion of a single fuel e.g. gas. CHP generally makes sense on sites with a heat demand of over 4,500 hours a year which equates to about 12.5 hours a day for 7 days a week throughout the year. It can typically cut costs by 20% compared to on site boilers and the use of grid electricity. They also have short payback periods of around 3 to 5 years although the specific site requirements, technology, fuel and level of heat demand will vary this. There are no direct grants or funding available but some government incentives include;  Enhanced Capital Allowances  Renewable Obligation Certificates (ROC’s)  RHI  FiT for the first 30,000 gas fired micro CHP units installed Note the FiT’s are only available for micro CHP (capacity of 2kW or less) at 13.45p/kWh and the RHI has only been proposed for the useful heat of CHP fueled by qualifying renewable sources. Another key area of interest is the warming room. If and when the Airedale unit for the blast chiller needs replacing, heat recovery should be incorporated and perhaps warm air is ducted into the warming room to offset the oil fired heater. Furthermore the air compressor in between the wash room and the holding room could easily be retrofitted to duct the warm air into a useful space rather than going to atmosphere, saving on heating requirements and therefore money. Conclusion As seen below, both wind and PV have potential to save and generate money for Puffin, with payback periods between 8 and 10 years for different scenarios. It’s worth noting the wind turbine calculations have been based on actual quotes whereas the PV has been based more on estimations. PV will be quicker to install and easier in terms of planning permission. Wind turbines typically take 19 months from feasibility to commissioning stage. There may be other planning constraints with a wind turbine but an in depth feasibility study would be needed to highlight any possible further issues. According to OFGEM the future price of FiT rates for PV and wind is set to steadily drop each year to 3.78 p/kWh and 6.96 p/kWh respectively by 2019 so could be worth doing something sooner rather than later.
28 Furthermore the National Grid have said the UK is almost certain to miss its EU 2020 targets for renewable energy. However it’s also recently announced an ambitious carbon target of reducing carbon emissions 57% by 2030 on 1990 levels. It’s hard to say how this along with government change could affect the future of renewable energy incentives. Currently there are no grants available but there are various financing options such as self- financing, bank (loan) finance and leasing the site to a third-party developer, each with their own advantages and disadvantages. I think CHP is definitely worth investigating especially as Puffin is expanding. It’s best to consider installing at the design stage for a new building as it can be fully integrated into the design, but it can also be successful retrofitting to existing sites. Furthermore heat recovery from air compressors and chiller units could help reduce heating demand and save money. Appendix Company names… Forward emails from pembs council/companys Measures Wind nED 100 PV 50 kW Payback Simple 8 Years 8 Years Discounted (2.5%) 9 Years 9 Years Discounted (4%) 10 Years 9 Years ROI Simple 54.1% 71.8% Discounted (2.5%) 54.1% 71.8% Discounted (4%) 54.1% 71.8% IRR Simple 11.2% 12.2% Discounted (2.5%) 8.5% 9.5% Discounted (4%) 6.9% 7.9% Profit after 20 years Simple £ 508,486 £ 103,753 Discounted (2.5%) £ 323,565 £ 67,553 Discounted (4%) £ 239,765 £ 51,148 Table 5. Best cases for Wind and PV

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Renewable Options Report Final (2)

  • 2. 2 Contents List of Figures...........................................................................................................................................3 List of Graphs ...........................................................................................................................................3 List of Tables ............................................................................................................................................3 Acronyms .................................................................................................................................................3 Introduction.............................................................................................................................................4 Wind.........................................................................................................................................................4 Norvento nED 100 kW (24m blade diameter).....................................................................................6 Simple Cash flow for Norvento nED 100 .........................................................................................7 Discounted Cash flow – Scenario 1..................................................................................................8 Discounted Cash flow – Scenario 2..................................................................................................9 Endurance E3120 50 kW (19.2m blade diameter).............................................................................10 Simple Cash flow for Endurance E3120.........................................................................................11 Discounted Cash flow – Scenario 1................................................................................................12 Discounted Cash flow – Scenario 2................................................................................................13 Summary............................................................................................................................................14 Solar Photovoltaics ................................................................................................................................15 Maximising roof area 123kW nominal power – Monocrystalline cells.............................................15 Simple Cash flow for 123kW Monocrystalline PV array................................................................18 Discounted Cash flow – Scenario 1................................................................................................19 Discounted Cash flow – Scenario 2................................................................................................20 50kW nominal power – Monocrystalline cells ..................................................................................21 Simple Cash flow for 50kW Monocrystalline PV array ..................................................................23 Discounted Cash flow – Scenario 1................................................................................................24 Discounted Cash flow – Scenario 2................................................................................................25 Summary............................................................................................................................................26 CHP / Heat Recovery..............................................................................................................................27 Conclusion..............................................................................................................................................27 Appendix................................................................................................................................................28
  • 3. 3 List of Figures Figure 1. Proposed site location ..............................................................................................................5 Figure 2. Left, Norvento 100kW. Right, Endurance 50kW.....................................................................14 Figure 3. Warehouse rooftop PV ...........................................................................................................26 List of Graphs Graph 1. Power Curve of Norvento nED 100 Wind Turbine....................................................................6 Graph 2. Power Curve of Endurance E3120 Wind Turbine ...................................................................10 Graph 3. System Outputs & Incomes (123kW Array)............................................................................17 Graph 4. System Outputs & Incomes (50kW Array)..............................................................................22 List of Tables Table 1. Wind turbine tariffs (April 2016)................................................................................................5 Table 2. PV tariffs (April 2016)...............................................................................................................15 Table 3. 123kW system output..............................................................................................................16 Table 4. 50 kW System...........................................................................................................................21 Table 5. Best cases for Wind and PV .....................................................................................................28 Acronyms FiT – Feed-in tariff ROI – Return on investment RHI – Renewable heat incentive IRR – Internal rate of return AMSL – Above mean sea level CHP – Combined heat and power AGL – Above ground level DNO – Distribution Network Operator PV – Photovoltaics ROC’s – Renewable Obligation Certificates NPV – Net present value
  • 4. 4 Introduction With Puffin expanding year on year, it’s inevitable the energy consumptions will rise. Finding technologies that help reduce energy demand and increase efficiency is important for the company. This is true in terms of saving money but also to reduce the overall carbon footprint because the value of having a green image is becoming increasingly significant. Both from the retail and consumer point of view. The lack of committed government policy plans for renewable energy has meant incentives such as the feed in tariff (FiT) and renewable heat incentive (RHI) have been drastically cut recently. However projects may still be viable if a large proportion of energy can be consumed on site. The main and new cold store sites both have good grid connections and accessibility with 11 KVA substations. According to the Western Power distribution generation map, the main site has about 1 MW of spare capacity and the new cold store site 1.8 MW. In order to connect to the grid, a formal application has to be made. The Distribution Network Operator (DNO) will then be in touch to find the most cost effective grid connection method. It can take up to 65 working days to get a formal offer from a DNO, though some are quicker. Wind The new cold store site identified below in Figure 1 is under the Inner Horizontal Surface for the Haverfordwest Aerodrome which means the height can’t exceed 86m above mean sea level (AMSL). Since the ground level in this area is around 35m AMSL (according to OS data), a wind turbine of under 50m above ground level (AGL) to tip should be ok. Typical tower heights for turbines ranging from 50 to 800 kW are around 24m, 30m, 36m, 40m, 50m, 60m and 75m. This means the maximum possible hub height for the area is 36m with 28m diameter blades. The Norvento 100 kW turbine falls into this category, having available tower heights of 24.5m, 29.5m and 36m with either 22 or 24m diameter blades and could suit well. Going for the tallest tower permissible is advantageous since wind speed increases with distance from the ground. Roughly for each 1m increase in hub height of a farm wind turbine the annual energy production increases by 0.5%. Therefore it is always financially better to opt for the highest tower available, provided you can get planning consent. Interpolating wind speeds from the NOABL wind database between 25 and 45m AGL has shown the site has a wind speed of roughly 5.92 m/s at 36m AGL.
  • 5. 5 Wind Installation Size Feed-in Tariff (from April 2016) Export Tariff 0-50 kW 8.46 p/kWh 4.91 p/kWh 50-100 kW 7.61 p/kWh 4.91 p/kWh 100-1500 kW 4.89 p/kWh 4.91 p/kWh > 1500 kW 0.85 p/kWh 4.91 p/kWh Table 1. Wind turbine tariffs (April 2016) Figure 1. Proposed site location
  • 6. 6 Norvento nED 100 kW (24m blade diameter) Assumptions Net annual power output (kWh) 258,717 Electricity Price (£/kWh) £ 0.1045 Annual O+M Costs £ 4,800 Capital Cost £ 330,000 Fit Tariff (£/kWh) £ 0.0761 Export Tariff (£/kWh) £ 0.0491 Electricity Consumed on site Est (kWh) 1,021,488 Electricity to export (kWh) 0 Electrical losses expressed as efficiency 0.95 Turbine availability factor 0.95 Capacity factor 29.5% Mean Wind speed @ 36m agl (m/s) 5.92 Graph 1. Power Curve of Norvento nED 100 Wind Turbine
  • 7. 7 Simple Cash flow for Norvento nED 100 Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £ 330,000 £ 0 -£ 330,000 -£330,000 1 £ 4,800 £ 46,724 £ 41,924 -£288,076 2 £ 4,800 £ 46,724 £ 41,924 -£246,151 3 £ 4,800 £ 46,724 £ 41,924 -£204,227 4 £ 4,800 £ 46,724 £ 41,924 -£162,303 5 £ 4,800 £ 46,724 £ 41,924 -£120,379 6 £ 4,800 £ 46,724 £ 41,924 -£78,454 7 £ 4,800 £ 46,724 £ 41,924 -£36,530 8 £ 4,800 £ 46,724 £ 41,924 £5,394 9 £ 4,800 £ 46,724 £ 41,924 £47,319 10 £ 4,800 £ 46,724 £ 41,924 £89,243 11 £ 4,800 £ 46,724 £ 41,924 £131,167 12 £ 4,800 £ 46,724 £ 41,924 £173,091 13 £ 4,800 £ 46,724 £ 41,924 £215,016 14 £ 4,800 £ 46,724 £ 41,924 £256,940 15 £ 4,800 £ 46,724 £ 41,924 £298,864 16 £ 4,800 £ 46,724 £ 41,924 £340,789 17 £ 4,800 £ 46,724 £ 41,924 £382,713 18 £ 4,800 £ 46,724 £ 41,924 £424,637 19 £ 4,800 £ 46,724 £ 41,924 £466,562 20 £ 4,800 £ 46,724 £ 41,924 £508,486 Payback 8 Years ROI 54.1% Profit after 20 years £ 508,486 IRR 11.2%
  • 8. 8 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Payback 9 Years ROI 54.1% Profit after 20 years £ 323,565 IRR 8.5% Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £330,000 £0 -£330,000 1.000 -£330,000 -£330,000 1 £4,800 £46,724 £41,924 0.976 £40,902 -£289,098 2 £4,800 £46,724 £41,924 0.952 £39,904 -£249,194 3 £4,800 £46,724 £41,924 0.929 £38,931 -£210,263 4 £4,800 £46,724 £41,924 0.906 £37,981 -£172,282 5 £4,800 £46,724 £41,924 0.884 £37,055 -£135,227 6 £4,800 £46,724 £41,924 0.862 £36,151 -£99,076 7 £4,800 £46,724 £41,924 0.841 £35,269 -£63,806 8 £4,800 £46,724 £41,924 0.821 £34,409 -£29,397 9 £4,800 £46,724 £41,924 0.801 £33,570 £4,173 10 £4,800 £46,724 £41,924 0.781 £32,751 £36,924 11 £4,800 £46,724 £41,924 0.762 £31,952 £68,876 12 £4,800 £46,724 £41,924 0.744 £31,173 £100,049 13 £4,800 £46,724 £41,924 0.725 £30,413 £130,462 14 £4,800 £46,724 £41,924 0.708 £29,671 £160,133 15 £4,800 £46,724 £41,924 0.690 £28,947 £189,080 16 £4,800 £46,724 £41,924 0.674 £28,241 £217,322 17 £4,800 £46,724 £41,924 0.657 £27,552 £244,874 18 £4,800 £46,724 £41,924 0.641 £26,880 £271,755 19 £4,800 £46,724 £41,924 0.626 £26,225 £297,979 20 £4,800 £46,724 £41,924 0.610 £25,585 £323,565
  • 9. 9 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £330,000 £0 -£330,000 1.000 -£330,000 -£330,000 1 £4,800 £46,724 £41,924 0.962 £40,312 -£289,688 2 £4,800 £46,724 £41,924 0.925 £38,761 -£250,927 3 £4,800 £46,724 £41,924 0.889 £37,271 -£213,656 4 £4,800 £46,724 £41,924 0.855 £35,837 -£177,819 5 £4,800 £46,724 £41,924 0.822 £34,459 -£143,361 6 £4,800 £46,724 £41,924 0.790 £33,133 -£110,227 7 £4,800 £46,724 £41,924 0.760 £31,859 -£78,368 8 £4,800 £46,724 £41,924 0.731 £30,634 -£47,734 9 £4,800 £46,724 £41,924 0.703 £29,455 -£18,279 10 £4,800 £46,724 £41,924 0.676 £28,323 £10,044 11 £4,800 £46,724 £41,924 0.650 £27,233 £37,277 12 £4,800 £46,724 £41,924 0.625 £26,186 £63,463 13 £4,800 £46,724 £41,924 0.601 £25,179 £88,641 14 £4,800 £46,724 £41,924 0.577 £24,210 £112,851 15 £4,800 £46,724 £41,924 0.555 £23,279 £136,131 16 £4,800 £46,724 £41,924 0.534 £22,384 £158,514 17 £4,800 £46,724 £41,924 0.513 £21,523 £180,037 18 £4,800 £46,724 £41,924 0.494 £20,695 £200,732 19 £4,800 £46,724 £41,924 0.475 £19,899 £220,631 20 £4,800 £46,724 £41,924 0.456 £19,134 £239,765 Payback 10 Years ROI 54.1% Profit after 20 years £ 239,765 IRR 6.9%
  • 10. 10 Endurance E3120 50 kW (19.2m blade diameter) Assumptions Net annual power output (kWh) 150,545 Electricity Price (£/kWh) £ 0.1045 Annual O+M Costs £ 3,500 Capital Cost £ 320,000 Fit Tariff (£/kWh) £ 0.0846 Export Tariff (£/kWh) £ 0.0491 Electricity Consumed on site Est (kWh) 1,021,488 Electricity to export (kWh) 0 Electrical losses expressed as efficiency 0.95 Turbine availability factor 0.95 Capacity factor 34.4% Mean Wind speed @ 36m agl (m/s) 5.92 0 10 20 30 40 50 60 70 0 5 10 15 20 25 30 PowerOutput(kW) Wind Speed (m/s) Endurance E3120 Graph 2. Power Curve of Endurance E3120 Wind Turbine
  • 11. 11 Simple Cash flow for Endurance E3120 Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £320,000 £0 -£320,000 -£320,000 1 £3,500 £28,468 £24,968 -£295,032 2 £3,500 £28,468 £24,968 -£270,064 3 £3,500 £28,468 £24,968 -£245,096 4 £3,500 £28,468 £24,968 -£220,128 5 £3,500 £28,468 £24,968 -£195,160 6 £3,500 £28,468 £24,968 -£170,192 7 £3,500 £28,468 £24,968 -£145,224 8 £3,500 £28,468 £24,968 -£120,256 9 £3,500 £28,468 £24,968 -£95,287 10 £3,500 £28,468 £24,968 -£70,319 11 £3,500 £28,468 £24,968 -£45,351 12 £3,500 £28,468 £24,968 -£20,383 13 £3,500 £28,468 £24,968 £4,585 14 £3,500 £28,468 £24,968 £29,553 15 £3,500 £28,468 £24,968 £54,521 16 £3,500 £28,468 £24,968 £79,489 17 £3,500 £28,468 £24,968 £104,457 18 £3,500 £28,468 £24,968 £129,425 19 £3,500 £28,468 £24,968 £154,393 20 £3,500 £28,468 £24,968 £179,361 Payback 13 Years ROI - 43.9% Profit after 20 years £ 179,361 IRR 4.7%
  • 12. 12 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Payback 16 Years ROI -43.9% Profit after 20 years £ 69,231 IRR 2.1% Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £320,000 £0 -£320,000 1.000 -£320,000 -£320,000 1 £3,500 £28,468 £24,968 0.976 £24,359 -£295,641 2 £3,500 £28,468 £24,968 0.952 £23,765 -£271,876 3 £3,500 £28,468 £24,968 0.929 £23,185 -£248,691 4 £3,500 £28,468 £24,968 0.906 £22,620 -£226,071 5 £3,500 £28,468 £24,968 0.884 £22,068 -£204,003 6 £3,500 £28,468 £24,968 0.862 £21,530 -£182,473 7 £3,500 £28,468 £24,968 0.841 £21,005 -£161,468 8 £3,500 £28,468 £24,968 0.821 £20,492 -£140,976 9 £3,500 £28,468 £24,968 0.801 £19,993 -£120,983 10 £3,500 £28,468 £24,968 0.781 £19,505 -£101,478 11 £3,500 £28,468 £24,968 0.762 £19,029 -£82,449 12 £3,500 £28,468 £24,968 0.744 £18,565 -£63,884 13 £3,500 £28,468 £24,968 0.725 £18,112 -£45,771 14 £3,500 £28,468 £24,968 0.708 £17,671 -£28,101 15 £3,500 £28,468 £24,968 0.690 £17,240 -£10,861 16 £3,500 £28,468 £24,968 0.674 £16,819 £5,958 17 £3,500 £28,468 £24,968 0.657 £16,409 £22,367 18 £3,500 £28,468 £24,968 0.641 £16,009 £38,376 19 £3,500 £28,468 £24,968 0.626 £15,618 £53,994 20 £3,500 £28,468 £24,968 0.610 £15,237 £69,231
  • 13. 13 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £320,000 £0 -£320,000 1.000 -£320,000 -£320,000 1 £3,500 £28,468 £24,968 0.962 £24,008 -£295,992 2 £3,500 £28,468 £24,968 0.925 £23,084 -£272,908 3 £3,500 £28,468 £24,968 0.889 £22,197 -£250,711 4 £3,500 £28,468 £24,968 0.855 £21,343 -£229,369 5 £3,500 £28,468 £24,968 0.822 £20,522 -£208,847 6 £3,500 £28,468 £24,968 0.790 £19,733 -£189,114 7 £3,500 £28,468 £24,968 0.760 £18,974 -£170,140 8 £3,500 £28,468 £24,968 0.731 £18,244 -£151,896 9 £3,500 £28,468 £24,968 0.703 £17,542 -£134,354 10 £3,500 £28,468 £24,968 0.676 £16,868 -£117,487 11 £3,500 £28,468 £24,968 0.650 £16,219 -£101,268 12 £3,500 £28,468 £24,968 0.625 £15,595 -£85,673 13 £3,500 £28,468 £24,968 0.601 £14,995 -£70,678 14 £3,500 £28,468 £24,968 0.577 £14,418 -£56,259 15 £3,500 £28,468 £24,968 0.555 £13,864 -£42,395 16 £3,500 £28,468 £24,968 0.534 £13,331 -£29,065 17 £3,500 £28,468 £24,968 0.513 £12,818 -£16,247 18 £3,500 £28,468 £24,968 0.494 £12,325 -£3,922 19 £3,500 £28,468 £24,968 0.475 £11,851 £7,929 20 £3,500 £28,468 £24,968 0.456 £11,395 £19,324 Payback 19 Years ROI -43.9% Profit after 20 years £ 19,324 IRR 0.6%
  • 14. 14 Summary As seen above it would be best to go for the 100kW turbine if planning permits since the masts of both turbines are 36m and hence capital costs incurred are similar. Yet the nED 100 has an annual energy production of about 1.7 times that of the Endurance. This makes it significantly more economically viable. Measures Norvento nED 100 Endurance E3120 Payback (simple) 8 Years 13 Years ROI (simple) 54.1% -43.9% IRR (simple) 11.2% 4.7% Profit after 20 years £ 508,486 £ 179,361 Figure 2. Left, Norvento 100kW. Right, Endurance 50kW
  • 15. 15 Solar Photovoltaics The new cold store site has roofs facing nearly directly south (azimuth 177°) and have no shading on them, making it ideal for PV. Each cold store has roughly 760 m² of south facing roof area. The 3 most common types of PV cells on the market are monocrystalline, polycrystalline and thin film. Monocrystalline cells are most efficient and therefore most space efficient. Although they are more expensive compared to polycrystalline because of the purer silicon. In addition they last the longest – up to 25 years. Polycrystalline is cheaper but less efficient than monocrystalline and so will require more cells for the same given power output. Thin film is an emerging technology so are quite expensive and not that efficient but their flexible nature is leading to many new applications. Calculations have been based of power outputs from monocrystalline cells. Maximising roof area 123kW nominal power – Monocrystalline cells PV Installation Size Feed-in Tariff (from April 2016) Export Tariff 0-10 kW 4.32 p/kWh 4.91 p/kWh 10-50 kW 4.53 p/kWh 4.91 p/kWh 50-250 kW 2.38 p/kWh 4.91 p/kWh 250-1000 kW 1.99 p/kWh 4.91 p/kWh Table 2. PV tariffs (April 2016) Assumptions Store Length (m) 71.4 Store Width (m) 21.4 Pitch (°) 25 Area (m²) 760 Nominal power (kW) 123 Cost/ kW installed (50-250 kW) £ 1,100 O&M Cost/ kW £ 12 Inverter Cost (3x50 kW) £ 11,064
  • 16. 16 Month New Cold store Consumption (2015) (kWh) System Output (kWh) Generation Tariff Electric Savings January 34649 5123 £ 122 £ 535 February 25343 7345 £ 175 £ 768 March 24429 13289 £ 316 £ 1,389 April 29381 16960 £ 404 £ 1,772 May 31014 18592 £ 442 £ 1,943 June 32310 18645 £ 444 £ 1,948 July 33644 18081 £ 430 £ 1,889 August 32974 16048 £ 382 £ 1,677 September 47535 13921 £ 331 £ 1,455 October 102383 9178 £ 218 £ 959 November 31922 6052 £ 144 £ 632 December 85160 4215 £ 100 £ 440 Total 510744 147449 £ 3,509 £ 15,408 Table 3. 123kW system output
  • 17. 17 As seen above, summer months May, June and July produce the most energy as expected. Graph 3 also highlights that most of the total income generated comes from the electricity savings and not the FiT income. £- £500.00 £1,000.00 £1,500.00 £2,000.00 £2,500.00 £3,000.00 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 Inccome SystemOutput(kWh) Monthly System Output & Income of 123kW Monocrystalline Array System Output (kWh) Electricity Savings FiT Generation Income Total Income Graph 3. System Outputs & Incomes (123kW Array)
  • 18. 18 Simple Cash flow for 123kW Monocrystalline PV array Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £146,364 £0 -£146,364 -£146,364 1 £1,476 £18,918 £17,442 -£128,922 2 £1,476 £18,918 £17,442 -£111,481 3 £1,476 £18,918 £17,442 -£94,039 4 £1,476 £18,918 £17,442 -£76,597 5 £1,476 £18,918 £17,442 -£59,155 6 £1,476 £18,918 £17,442 -£41,714 7 £1,476 £18,918 £17,442 -£24,272 8 £1,476 £18,918 £17,442 -£6,830 9 £1,476 £18,918 £17,442 £10,611 10 £1,476 £18,918 £17,442 £28,053 11 £1,476 £18,918 £17,442 £45,495 12 £1,476 £18,918 £17,442 £62,936 13 £1,476 £18,918 £17,442 £80,378 14 £1,476 £18,918 £17,442 £97,820 15 £1,476 £18,918 £17,442 £115,262 16 £1,476 £18,918 £17,442 £132,703 17 £1,476 £18,918 £17,442 £150,145 18 £1,476 £18,918 £17,442 £167,587 19 £1,476 £18,918 £17,442 £185,028 20 £1,476 £18,918 £17,442 £202,470 Payback 9 Years ROI 38.3% Profit after 20 years £ 202,470 IRR 10.2%
  • 19. 19 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £146,364 £0 -£146,364 1.000 -£146,364 -£146,364 1 £1,476 £18,918 £17,442 0.976 £17,016 -£129,348 2 £1,476 £18,918 £17,442 0.952 £16,601 -£112,746 3 £1,476 £18,918 £17,442 0.929 £16,196 -£96,550 4 £1,476 £18,918 £17,442 0.906 £15,801 -£80,749 5 £1,476 £18,918 £17,442 0.884 £15,416 -£65,333 6 £1,476 £18,918 £17,442 0.862 £15,040 -£50,293 7 £1,476 £18,918 £17,442 0.841 £14,673 -£35,620 8 £1,476 £18,918 £17,442 0.821 £14,315 -£21,305 9 £1,476 £18,918 £17,442 0.801 £13,966 -£7,339 10 £1,476 £18,918 £17,442 0.781 £13,625 £6,287 11 £1,476 £18,918 £17,442 0.762 £13,293 £19,580 12 £1,476 £18,918 £17,442 0.744 £12,969 £32,549 13 £1,476 £18,918 £17,442 0.725 £12,653 £45,201 14 £1,476 £18,918 £17,442 0.708 £12,344 £57,545 15 £1,476 £18,918 £17,442 0.690 £12,043 £69,588 16 £1,476 £18,918 £17,442 0.674 £11,749 £81,338 17 £1,476 £18,918 £17,442 0.657 £11,463 £92,800 18 £1,476 £18,918 £17,442 0.641 £11,183 £103,983 19 £1,476 £18,918 £17,442 0.626 £10,910 £114,893 20 £1,476 £18,918 £17,442 0.610 £10,644 £125,538 Payback 10 Years ROI 38.3% Profit after 20 years £ 125,538 IRR 7.5%
  • 20. 20 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £146,364 £0 -£146,364 1.000 -£146,364 -£146,364 1 £1,476 £18,918 £17,442 0.962 £16,771 -£129,593 2 £1,476 £18,918 £17,442 0.925 £16,126 -£113,467 3 £1,476 £18,918 £17,442 0.889 £15,506 -£97,962 4 £1,476 £18,918 £17,442 0.855 £14,909 -£83,052 5 £1,476 £18,918 £17,442 0.822 £14,336 -£68,717 6 £1,476 £18,918 £17,442 0.790 £13,784 -£54,932 7 £1,476 £18,918 £17,442 0.760 £13,254 -£41,678 8 £1,476 £18,918 £17,442 0.731 £12,744 -£28,933 9 £1,476 £18,918 £17,442 0.703 £12,254 -£16,679 10 £1,476 £18,918 £17,442 0.676 £11,783 -£4,896 11 £1,476 £18,918 £17,442 0.650 £11,330 £6,434 12 £1,476 £18,918 £17,442 0.625 £10,894 £17,328 13 £1,476 £18,918 £17,442 0.601 £10,475 £27,803 14 £1,476 £18,918 £17,442 0.577 £10,072 £37,875 15 £1,476 £18,918 £17,442 0.555 £9,685 £47,560 16 £1,476 £18,918 £17,442 0.534 £9,312 £56,872 17 £1,476 £18,918 £17,442 0.513 £8,954 £65,826 18 £1,476 £18,918 £17,442 0.494 £8,610 £74,436 19 £1,476 £18,918 £17,442 0.475 £8,279 £82,714 20 £1,476 £18,918 £17,442 0.456 £7,960 £90,674 Payback 11 Years ROI 38.3% Profit after 20 years £ 90,674 IRR 6.0%
  • 21. 21 50kW nominal power – Monocrystalline cells Capping the nominal power at 50 kW means you can receive the higher FiT rate. Assumptions Nominal power (kW) 50 Cost/ kW installed (10-50 kW) £ 1,134 O&M Cost/ kW £ 12 Inverter Cost (50 kW) £ 3,688 Month New Cold store Consumption (2015) (kWh) System Output (kWh) Generation Tariff Electric Savings January 34649 1934 £ 88 £ 202 February 25343 2825 £ 128 £ 295 March 24429 5207 £ 236 £ 544 April 29381 6786 £ 307 £ 709 May 31014 7576 £ 343 £ 792 June 32310 7639 £ 346 £ 798 July 33644 7399 £ 335 £ 773 August 32974 6484 £ 294 £ 678 September 47535 5504 £ 249 £ 575 October 102383 3561 £ 161 £ 372 November 31922 2289 £ 104 £ 239 December 85160 1588 £ 72 £ 166 Total 510744 58792 £ 2,663 £ 6,144 Table 4. 50 kW System
  • 22. 22 £- £200.00 £400.00 £600.00 £800.00 £1,000.00 £1,200.00 £1,400.00 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Inccome SystemOutput(kWh) Monthly System Output & Income of 50kW Monocrystalline Array System Output (kWh) Electricity Savings FiT Generation Income Total Income Graph 4. System Outputs & Incomes (50kW Array)
  • 23. 23 Simple Cash flow for 50kW Monocrystalline PV array Year Cash Outflows Inflows (Savings) Net Cash Flows Cumulative NPV 0 £60,388 £0 -£60,388 -£60,388 1 £600 £8,807 £8,207 -£52,181 2 £600 £8,807 £8,207 -£43,974 3 £600 £8,807 £8,207 -£35,767 4 £600 £8,807 £8,207 -£27,560 5 £600 £8,807 £8,207 -£19,353 6 £600 £8,807 £8,207 -£11,146 7 £600 £8,807 £8,207 -£2,939 8 £600 £8,807 £8,207 £5,268 9 £600 £8,807 £8,207 £13,475 10 £600 £8,807 £8,207 £21,682 11 £600 £8,807 £8,207 £29,889 12 £600 £8,807 £8,207 £38,096 13 £600 £8,807 £8,207 £46,304 14 £600 £8,807 £8,207 £54,511 15 £600 £8,807 £8,207 £62,718 16 £600 £8,807 £8,207 £70,925 17 £600 £8,807 £8,207 £79,132 18 £600 £8,807 £8,207 £87,339 19 £600 £8,807 £8,207 £95,546 20 £600 £8,807 £8,207 £103,753 Payback 8 Years ROI 71.8% Profit after 20 years £ 103,753 IRR 12.2%
  • 24. 24 Discounted Cash flow – Scenario 1 Discount at rate of inflation (2.5%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £60,388 £0 -£60,388 1.000 -£60,388 -£60,388 1 £600 £8,807 £8,207 0.976 £8,007 -£52,381 2 £600 £8,807 £8,207 0.952 £7,812 -£44,570 3 £600 £8,807 £8,207 0.929 £7,621 -£36,948 4 £600 £8,807 £8,207 0.906 £7,435 -£29,513 5 £600 £8,807 £8,207 0.884 £7,254 -£22,259 6 £600 £8,807 £8,207 0.862 £7,077 -£15,183 7 £600 £8,807 £8,207 0.841 £6,904 -£8,278 8 £600 £8,807 £8,207 0.821 £6,736 -£1,542 9 £600 £8,807 £8,207 0.801 £6,572 £5,029 10 £600 £8,807 £8,207 0.781 £6,411 £11,441 11 £600 £8,807 £8,207 0.762 £6,255 £17,696 12 £600 £8,807 £8,207 0.744 £6,102 £23,798 13 £600 £8,807 £8,207 0.725 £5,954 £29,751 14 £600 £8,807 £8,207 0.708 £5,808 £35,560 15 £600 £8,807 £8,207 0.690 £5,667 £41,226 16 £600 £8,807 £8,207 0.674 £5,528 £46,755 17 £600 £8,807 £8,207 0.657 £5,394 £52,149 18 £600 £8,807 £8,207 0.641 £5,262 £57,411 19 £600 £8,807 £8,207 0.626 £5,134 £62,544 20 £600 £8,807 £8,207 0.610 £5,009 £67,553 Payback 9 Years ROI 71.8% Profit after 20 years £ 67,553 IRR 9.5%
  • 25. 25 Discounted Cash flow – Scenario 2 Discount at internal cost of capital (4%) Year Cash Outflows Inflows (Savings) Net Cash Flows Discount Factor Discounted Cash Flows Cumulative NPV 0 £60,388 £0 -£60,388 1.000 -£60,388 -£60,388 1 £600 £8,807 £8,207 0.962 £7,891 -£52,497 2 £600 £8,807 £8,207 0.925 £7,588 -£44,909 3 £600 £8,807 £8,207 0.889 £7,296 -£37,613 4 £600 £8,807 £8,207 0.855 £7,015 -£30,597 5 £600 £8,807 £8,207 0.822 £6,746 -£23,852 6 £600 £8,807 £8,207 0.790 £6,486 -£17,366 7 £600 £8,807 £8,207 0.760 £6,237 -£11,129 8 £600 £8,807 £8,207 0.731 £5,997 -£5,132 9 £600 £8,807 £8,207 0.703 £5,766 £634 10 £600 £8,807 £8,207 0.676 £5,544 £6,178 11 £600 £8,807 £8,207 0.650 £5,331 £11,510 12 £600 £8,807 £8,207 0.625 £5,126 £16,636 13 £600 £8,807 £8,207 0.601 £4,929 £21,565 14 £600 £8,807 £8,207 0.577 £4,739 £26,304 15 £600 £8,807 £8,207 0.555 £4,557 £30,861 16 £600 £8,807 £8,207 0.534 £4,382 £35,243 17 £600 £8,807 £8,207 0.513 £4,213 £39,456 18 £600 £8,807 £8,207 0.494 £4,051 £43,507 19 £600 £8,807 £8,207 0.475 £3,895 £47,403 20 £600 £8,807 £8,207 0.456 £3,746 £51,148 Payback 9 Years ROI 71.8% Profit after 20 years £ 51,148 IRR 7.9%
  • 26. 26 Summary As seen above the 123 kW system returns the greatest profit after 20 years but it’s the 50 kW system that has a significantly higher return on investment and a shorter payback period due to the higher FiT rate. However further investigation is needed to obtain more accurate figures for capital and O&M costs. Measures 123 kW System 50 kW System Payback (simple) 9 Years 8 Years ROI (simple) 38.3% 71.8% IRR (simple) 10.2% 12.2% Profit after 20 years £ 202,470 £ 103,753 Figure 3. Warehouse rooftop PV
  • 27. 27 CHP / Heat Recovery Since 19,350 litres of oil were used at 39 p/litre in 2015 for heating, it may be worth looking into combined heat and power (CHP) or getting a biomass boiler for space heating the offices and factory/ warming room. CHP is the simultaneous generation of heat and power from the combustion of a single fuel e.g. gas. CHP generally makes sense on sites with a heat demand of over 4,500 hours a year which equates to about 12.5 hours a day for 7 days a week throughout the year. It can typically cut costs by 20% compared to on site boilers and the use of grid electricity. They also have short payback periods of around 3 to 5 years although the specific site requirements, technology, fuel and level of heat demand will vary this. There are no direct grants or funding available but some government incentives include;  Enhanced Capital Allowances  Renewable Obligation Certificates (ROC’s)  RHI  FiT for the first 30,000 gas fired micro CHP units installed Note the FiT’s are only available for micro CHP (capacity of 2kW or less) at 13.45p/kWh and the RHI has only been proposed for the useful heat of CHP fueled by qualifying renewable sources. Another key area of interest is the warming room. If and when the Airedale unit for the blast chiller needs replacing, heat recovery should be incorporated and perhaps warm air is ducted into the warming room to offset the oil fired heater. Furthermore the air compressor in between the wash room and the holding room could easily be retrofitted to duct the warm air into a useful space rather than going to atmosphere, saving on heating requirements and therefore money. Conclusion As seen below, both wind and PV have potential to save and generate money for Puffin, with payback periods between 8 and 10 years for different scenarios. It’s worth noting the wind turbine calculations have been based on actual quotes whereas the PV has been based more on estimations. PV will be quicker to install and easier in terms of planning permission. Wind turbines typically take 19 months from feasibility to commissioning stage. There may be other planning constraints with a wind turbine but an in depth feasibility study would be needed to highlight any possible further issues. According to OFGEM the future price of FiT rates for PV and wind is set to steadily drop each year to 3.78 p/kWh and 6.96 p/kWh respectively by 2019 so could be worth doing something sooner rather than later.
  • 28. 28 Furthermore the National Grid have said the UK is almost certain to miss its EU 2020 targets for renewable energy. However it’s also recently announced an ambitious carbon target of reducing carbon emissions 57% by 2030 on 1990 levels. It’s hard to say how this along with government change could affect the future of renewable energy incentives. Currently there are no grants available but there are various financing options such as self- financing, bank (loan) finance and leasing the site to a third-party developer, each with their own advantages and disadvantages. I think CHP is definitely worth investigating especially as Puffin is expanding. It’s best to consider installing at the design stage for a new building as it can be fully integrated into the design, but it can also be successful retrofitting to existing sites. Furthermore heat recovery from air compressors and chiller units could help reduce heating demand and save money. Appendix Company names… Forward emails from pembs council/companys Measures Wind nED 100 PV 50 kW Payback Simple 8 Years 8 Years Discounted (2.5%) 9 Years 9 Years Discounted (4%) 10 Years 9 Years ROI Simple 54.1% 71.8% Discounted (2.5%) 54.1% 71.8% Discounted (4%) 54.1% 71.8% IRR Simple 11.2% 12.2% Discounted (2.5%) 8.5% 9.5% Discounted (4%) 6.9% 7.9% Profit after 20 years Simple £ 508,486 £ 103,753 Discounted (2.5%) £ 323,565 £ 67,553 Discounted (4%) £ 239,765 £ 51,148 Table 5. Best cases for Wind and PV