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Sleeving Pools could enable local authorities to procure local energy

Neil Mearns Neil Mearns Senior Writer
31st March 2021

This blog post is adapted from an article in March’s issue of Energy net zero, published on 31 March. To find out more about a subscription to Energy net zero, please contact Veronica at v.truman@cornwall-insight.com.

For many local authorities and corporates, development of small-scale renewables and consideration of generation production location will be a key priority in the future in order to meet net zero targets. With this in mind, we were drawn to not-for-profit energy centre Regen’s Feasibility Analysis of Bristol City Council’s Electricity Sleeving Pool, published on 25 February.

Regen worked with Bristol City Council to produce a feasibility assessment exploring the concept of a Sleeving Pool to simplify the process of contracting and matching renewable and low carbon generation. In a sleeved PPA arrangement, also called direct PPA, an intermediary company handles the transfer of money and energy to and from a renewable energy project on behalf of the buyer.

The Sleeving Pool refers to the lead demand (Bristol City Council in this case, additional demand (e.g. other local authorities), and generators that assign the exported electricity to a Pool Manager.

The cost of electricity managed through a Sleeving Pool arrangement for a demand customer involves three elements: PPA cost, imbalance cost managed through the Pool and Pool Manager fees.

Two generation portfolio scenarios were modelled between November 2020 and February 2021 that could meet 100% of Bristol City Council’s annual demand:

  • Scenario 1 – a portfolio of around 23.1MW capacity with both new wind and solar projects.
  • Scenario 2 – a 28.1MW portfolio where most of the new generation is solar.

A high-level modelling exercise sought to understand the potential impact of a battery on reducing imbalance periods. Calculated using 2019 generation profiles and 2019 electricity market spot prices, the total cost of the imbalance between the low and high prices in Scenario 1 calculated a worst case £176,4961 cost of imbalance, adding an additional £4.05/MWh onto BCC’s cost of electricity. Results of the battery modelling suggest that a 2MW/2MWh battery operating on the spot market could avoid imbalance cost of around £16,000, and with a 5MW/5MWh battery, the savings were nearer £32,000. A summary of findings for batteries and reducing imbalance cost is shown in Figure 1.

Bristol City Council is set to initiate a pilot scheme of a Sleeving Pool with a small number of generators and Bristol City Council half hourly demand this year, with the intention to finalise the contractual structures and operation of a Pool.

The issues raised in the paper are related to issues around central trading arrangements – something will discuss further in Cornwall Insight’s Net Zero Business Forum on 22 April. To find out more about the Net Zero Business Forum, please contact Veronica at v.truman@cornwall-insight.com.

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