Business overview 2015-2017
1. Purpose of document
The purpose of this document is to describe what kind of organisation Low Carbon Gordano is, to set out our aims and objectives, and to explain the operating model for Low Carbon Gordano over the next three years.
2. What are we?
Low Carbon Gordano Limited is an Industrial and Provident Society for the benefit of the community. We are regulated by the Financial Conduct Authority (FCA).
Registered in England and Wales on 28th April 2011.
Registration number: 31251 R
Registered Office: 32 Eastcliff, Portishead, North Somerset, BS20 7AB
3. Our Vision
A low carbon future for the Gordano Community and the wider world using a co-operative model to ensure community participation and ownership.
4. Our Mission Statement
To help create a low carbon future through renewable energy generation and energy saving measures.
5. Our Aims
- Achieving carbon reduction through developing renewable energy generation schemes and investing in energy reduction programmes.
- Generating a financial surplus for reinvestment in carbon reduction projects in our community.
- Maximising local business and employment opportunities to help develop a sustainable local economy.
- Encouraging all sectors of the community to adopt a low carbon lifestyle
- Collaborating with energy deprived communities in other parts of the world to achieve fairer, sustainable, low carbon lifestyles.
6. Our Community
When Low Carbon Gordano was established in 2011 we defined our community as consisting of the towns of Portishead and Pill and the adjoining villages. After 3 years experience in developing projects we realised that this area was too small to sustain a long term sustainable energy project. As well as size there are significant constraints which were not foreseen at the outset; these include the Green Belt designation which covers all of the original area and the presence of Bristol airport which has so far ruled out any wind projects.
At the start of 2014 we entered discussions with neighbouring community energy groups and agreed to extend our community to include other parts of North Somerset and neighbouring areas. We also strengthened our board to include representatives from these areas.
Our area now contains the North Somerset towns of Portishead, Pill, Clevedon, Nailsea, Backwell, and Long Ashton and where opportunities arise can extend into neighbouring areas of North Somerset, Bristol, and South Gloucestershire.
7. Market opportunity
There are two main factors that drive the need for us to consider implementing sustainable energy solutions:
7.1 Security of supply
Despite a recent fall in electricity demand due to the economic downturn and to increases in efficiency, electricity demand is expected to rise by about 10% by 2030. This is due to an anticipated increase in economic growth and to a switch to electric vehicles and the use of electrically powered heat pumps to replace conventional boilers1. At the same time the UK is importing an increasing percentage of its energy with around 43% being imported in 20132.
This demonstrates how vulnerable the UK will be to future security of supply known as the ‘energy gap’ and potential price rises.
7.2 Tackling climate change
Our present energy supply is mainly from fossil fuels (coal, oil and gas) which, when burned, emit carbon dioxide (CO2), a greenhouse gas that contributes to climate change.
The Climate Change Act 2008 introduced a legally binding target to reduce greenhouse gas emissions by at least 80% below the 1990 baseline in 2050, with an interim target to reduce emissions by at least 34% in 2020. The Act also introduced ‘carbon budgets’, which set the trajectory to ensure the targets in the Act are met. These budgets represent legally binding limits on the total amount of greenhouse gases that can be emitted in the UK for a given five-year period.
The Government have introduced a range of policies to support and encourage the development of low carbon technologies. In particular the Feed-in Tariffs scheme aims to encourage small scale (<5 MW) renewable generation by paying users for each unit of electricity generated, as well as a payment for each unit exported to the grid. Technologies supported are: Solar PV, Wind, Hydro, Micro combined heat and power (CHP) and Anaerobic Digestion. For example the Moorhouse Lane Solar Array relies on the Feed-in Tariff for just over half of its income.
8. Our products
Low Carbon Gordano is adopting a dual strategy in order to reduce the local carbon footprint – energy reduction and renewable generation.
8.1 Energy reduction
We estimated in our community energy plan that energy demand could be reduced by about 20% if all potential measures such as loft and wall insulation were taken3.
LCG has established an energy advice service known as EASY – Energy Advice Service for You – and we have carried out a number of energy assessments for local community buildings as well as offering a thermal imaging service for householders.
The vast majority of transport fuel consumption is linked to petrol and diesel cars. Buses account for a very small proportion of the total. A shift towards public and other shared modes of transport would reduce private usage as would driving in a more fuel efficient way. Although transport is not part of the dual strategy, Low Carbon Gordano will support any initiative which will drive down demand and thereby contribute to a lower carbon footprint.
8.2 Renewable generation
Our energy plan also estimated that if all potential renewable generation measures were adopted around 30% of demand could be met3. North Somerset Council have recently commissioned a report from Regen SW on the potential for renewables in the district taking account of constraints such as Green Belt, landscape, proximity to residential areas, and access to the grid. This report indicates a potential for the following renewables:
120 MW of small, medium, and large wind turbines.
77 MW of ground based solar PV arrays.
Low Carbon Gordano intends to be in a position to develop a significant proportion of this total over the next 20 years. Given the resources available we are planning to develop around 2-5MW of solar and wind projects each year such that community owned renewable generation would comprise between 20% and 25% of the total installed capacity in 20 years time.
To date we are in the process of building a 1.8MW solar array at Moorhouse Lane in Bristol and we are exploring a 0.5MW wind turbine and a 1MW solar array. We are also exploring the potential for roof mounted projects in schools and other public buildings.
9. How is LCG funded?
LCG will rely on 4 potential sources of funding
Community share issues
Revenue generated from projects
In 2011 Low Carbon Gordano raised monies through a Pioneer Share Issue to cover start up costs. In 2012 LCG received a grant of £110,000 from the Government’s Local Energy Assessment Fund to identify potential for renewbles and energy saving locally. In 2014 LCG raised £2.2M through a Community Share Issue to finance the Moorhouse Farm Solar Array. A £600,000 underwriting facility was agreed for this project but was not needed.
Revenue from renewables is generated through a combination of Feed-in Tariff and sale of electricity. The financial viability of each project is assessed and is one of the key factors in deciding whether or not to proceed.
LCG aims to reward shareholders with an interest rate of 4% above the current inflation rate.
The minimum shareholding is £500.
10. Community Benefit
Any surplus once all financial obligations have been met is devoted to community benefit projects. (See the Community Fund). All of this money will be used to finance further low carbon schemes.
In addition we intend to keep money recycling in the local economy by
- Giving business to local companies,
- Enabling local community organisations to increase local spending capacity by reducing energy bills through energy generation and reduction.
- In the near future we hope to be able to sell electricity, at a discount, directly to the communities local to our generators.
11. Our Organisational model
11.1 Legal Status
Low Carbon Gordano Limited is a registered society under the Co-operative and Community Benefit Societies Act 2014– Society number 31251R.
The Society will operate in line with the co-operative principle of one-member-one-vote, regardless of how much share capital a member holds, in contrast to companies, which operate on the principle of one-share-one-vote.
Members of the Society have the collective right to appoint and dismiss directors, accept or reject directors’ recommendations and to determine the affairs and rules of the Society. A copy of the rules can be accessed here.
As an incorporated entity the members have limited liability. This is limited to the amount of their shareholding.
11.2 The Board
The initial Board of Directors was made up of the founder members. At the first Annual General Meeting, the Board of Directors was elected from the membership. There is now provision for 8 elected directors and up to 4 co-opted directors. All elected directors are unpaid. The co-opted directors can receive a fee for the respective expertise they bring to the board.The Board is also supported by a group of unpaid technical advisors who have expertise in related areas. Details of the current Board members are here.
LCG does not plan to employ any staff. Most of our back-office functions will be provided through a contract with Bath & West Community Energy. Project development will be resourced in partnership with Bath & West Community Energy or other developers.
11.4 Working in partnership
We have formed a strategic partnership with Mongoose Energy. They have provided the necessary development finance for the Moorhouse Farm project and continue to provide business support. We have entered into a 5-year agreement with Mongoose Energy to support the implementation of our strategic objectives. We intend to work together to develop a number of wind and solar projects over this period.
We have established a strategic partnership for both installation and development of projects with Solarsense Ltd who are the largest renewable energy installer in North Somerset.
Low Carbon Gordano is linked to local community energy groups in Portishead, Pill, Clevedon, Nailsea, Backwell, and Long Ashton who help to deliver projects in their areas. Each of these groups is currently represented on the board.
In addition LCG has established links with the following influential organisations
- Community Energy England
- Co-ops UK, Co-ops SW
- Centre for Sustainable Energy
- Bristol Energy Network
- Portishead Chamber of Commerce
12. Key achievements
Since LCG was founded in April 2011 it has achieved the following successes:
Increased membership from 3 to 360
Raised capital in excess of £2.2M
Conducted energy efficiency surveys on 17 community buildings and 70 private homes
Held 24 public events addressing renewable energy and energy reduction which were attended by a total of 600 people
The Moorhouse solar array about to be completed will save more than 22,000 tonnes of CO2 over its lifetime.
1. UK Future Energy Scenarios, UK gas and electricity transmission, SEPTEMBER 2012
3. “A chance to change the future of your community”. Gordano’s Sustainable Energy Plan supported by The Converging World.