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Plans to set up a new publicly-backed electricity company in Sark are moving forward with UK firms now selected to design the new grid – so long as cash is provided for that process.
The two companies chosen are Welsh firm Infinite Renewables Ltd who are partnered with Yorkshire-based Sancus Utilities Limited, a subsidiary of Windcare Holdings Ltd.
Community for Renewables, a consultancy firm which has managed the tender process on behalf of the island, estimates that the project could total £8.6m in a briefing document.
It suggests power could be delivered through two 225kW wind turbines, a field’s worth of solar panels, and additional diesel generators.
Other costs are linked to infrastructure for energy storage, grid management systems, a high and low voltage cable network, a new billing system, and space for extra capacity for future electrification of domestic products.
The cost per unit of electricity in Sark is currently 40p – nearly double the cost in Guernsey but markedly lower than it has been in previous years at 53p.
The consultants offered a series of scenarios based on the build cost and financing options but found that only either favorable loan rates – below 4% - or a significant increase in demand would bring customer costs close to the current level while sustainably paying for the project.
But it said that transitioning households from bottled gas to electric cooking would increase electricity consumption by around 300,000kWh per year.
Members of Sark’s parliament will be asked to approve these two companies as the desired partners and authorise funding for the design of a new electricity production and generation system at a meeting on 17 January.
Pictured: A breakdown of costs needed for the next phase of the project.
Infinite plans to manage the project using a series of smaller enterprises which have experience in renewable energy generation for remote jurisdictions. Meanwhile, Sancus would be the contractor for the electricity distribution system.
Other bids from two other interested parties were deemed to be too high specification and costly for Sark.
Work on the design phase is expected to be complete by June, and it’s estimated to cost around £175,000, with £20,000 budgeted for contingency and “legal support outside of Guernsey Gov if needed”.
£50,000 has been spent to date on the project and tender process.
Money for the scheme is coming out of the island’s general reserves, but it’s acknowledged that borrowing may be required to execute the project, but with the ambition to repay debt and top up reserves through electricity tariffs once in public ownership.
Other funding routes suggested include a loan from the States of Guernsey bond, a government loan guarantee, private funding routes including through Ravenscroft, or community bonds.
“The Committee acknowledges the potential inherent and immediate fiscal risk of this action but balances it with the absolute need to secure electricity provision on the island for current and future generations,” P&F said in its policy letter.
While costs are provisional there is a warning that should these prove too high and unable to guarantee a lower cost of electricity based on current rates then grant funding or low-cost government finance will need to be considered.
For example, it’s suggested that there may be a case for installing a fibreoptics broadband network at the same time trenches are dug for the new cabling, but this would increase overall project cost.
Pictured: Sark Electricity is the sole commercial electricity provider in the island, delivering energy through diesel generators.
Sark’s government said multiple reports in the past few years have highlighted the decaying electricity system and the lack of investment into the infrastructure.
Sark Electricity Limited flatly rejects that it has avoided upgrading the grid and improving safety, arguing Chief Pleas have blocked permission for it to dig up roads and replace cabling.
The island’s Price Control Commissioner and Guernsey Electricity advised Chief Pleas throughout the tender bid.
Tender process for new Sark electricity system
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“Legitimate permissions from the authorities” needed to replace cable
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