Settle Hydro case study

Yorkshire’s first community-owned hydropower station has been complimented by improvements to the riverside to improve accessibility and the connection between Settle and the River Ribble.

The 50kW Archimedean screw at Settle Weir (near Bridge End) is expected to generate approximately 165,000 kWh (units) of electricity per year – enough for around 50 average houses, saving 80 tonnes of carbon emissions per year or 3,200 tonnes of carbon emissions over an expected lifetime of 40 years.

The scheme has received national recognition and has won the following awards:

  • 2010 Yorkshire Rural Awards, Green Business of the Year
  • 2010 Yorkshire Post, Community Environmental Award
  • 2010 British Renewable Energy Association, Community Award
  • 2010 Action for Market Towns, Partnership and Community Working Award and overall regional winner
  • 2010 Creating Better Futures, Creating Better Communities Award

The project location

Settle is a thriving market town situated in Craven District, in the Yorkshire Dales. The River Ribble runs to west of the town on a north-south axis and separates the town from Settle College and Middle School.

The Hydro

Settle Hydro was established as part of an initiative between StART (Settle Town Team set up as part of the RMT Process) and Green Settle. This scheme saw members of StART put forward the project and then become involved in direct project delivery with the creation of an Industrial and Provident Society (IPS), which is discussed in more detail below. The original idea was to find a way of encouraging more people to spend money in the local area and to underpin the local economy. As part of this Green Settle was established and the idea to use their natural river resources to produce an income for the community, and produce clean green renewable energy grew from there. After deciding on a hydro scheme they worked with h2oPE (Water Power Enterprises, a Community Interest Company committed to developing Hydro schemes) and the scheme progressed.

An Industrial and Provident Society

Settle Hydro is the Industrial and Provident Society (IPS) set up specifically to deliver and manage the hydro power project and undertake the ongoing management of the plant. They are also responsible for any community funds available after project costs have been met which will be used to fulfill the twin aims of regenerating the local economy and promoting the environmental sustainability of Settle District.

The directors of Settle Hydro, Ann Harding (Chair of StART and experienced as a company director), Steve Amphlett (Chair of Chamber of Trade and local businessman) and Helen Walker (Director of h2oPE and retired director of Settle Hydro) have experience between them of monitoring project budgets of this size and complexity. None of the directors receive financial remuneration from the society. Essential board financial advice and engineering expertise is provided by Chris I’Anson (Managing Director of I’Anson’s Feed Mills in Masham) and Hugh Clark (Financial Director of I’Anson’s Feed Mills).

The formation of Settle Hydro has been jointly sponsored by StART, Settle District Chamber of Trade and Settle Going Green. h2oPE (Water Power Enterprises)
h2oPE conducted the feasibility and provided assistance for the UK’s first community funded hydro at New Mills in Derbyshire. The Co-operative Group has backed h2oPE with a £48,000 Co-operative Fund grant to help develop three community-led renewable energy projects, including the Settle Hydro project. This
allowed h2oPE to work at risk with Settle Hydro and claim their fees as part of the project capital expenditures. This funding enabled the community to set themselves up as a Co-operative (or Industrial and Provident Society) for the benefit of the whole community.

h2oPE works at risk with community groups to obtain the permissions (planning permission, abstraction license, lease and so on) and finance for community hydro schemes, as well as project managing construction.

The way forward

The development of Yorkshire Forward’s policy product range means that the RMT towns need to develop a forward strategy for the delivery of renaissance in their towns. This could present opportunities for the communities in these towns to be more directly involved in project delivery.

The hydro scheme has allowed the exploration of one model for how this community involvement might be achieved i.e. through setting up an IPS. The purpose of an IPS is as a vehicle to raise funds for community use and they were originally established for community housing schemes. Prior to this scheme there was no such fund available in Settle and the creation of one will aid the sustainability of renaissance in Settle and enable the community to have future funds towards the delivery of renaissance projects in the town.

This fund is of interest to other RMT towns looking to move their renaissance programmes forward; as one of the bars to community involvement in project delivery has been the lack of income for the group; both for administration costs and as a contribution to project delivery.

Share issue

Settle Hydro and h2oPE worked hard together to issue a share prospectus to raise significant funds for the scheme. Shares were issued prior to the project being granted planning permission to ensure sufficient funds were available for the project to proceed. Prior to confirmation of planning permission, funds were held in a secure account and investors were guaranteed a full return should the scheme not go ahead. Shares in Settle Hydro cost £1 each, and the minimum shareholding was 250 shares. The target was to raise £100,000 and by the close of the issue in December 2008, thanks to good publicity and hard work, this had been met with 165 individual shareholders. The actual shareholding raised was £135k.

It was highlighted that the funds raised funded a public-spirited ‘not-for-profit’ organisation and any investment in Settle Hydro Ltd should be seen as a social and not a financial investment. Interest to members will be paid in accordance with Settle Hydro Ltd’s aims to be of benefit to the community and the Directors expect to be able to pay an annual interest. Most investors do expect to see a return on their investment at some time in the future. The IPS is run on a one-member one-vote principle.

On behalf of Settle Hydro Ltd, h2oPE applied to HM Revenues and Customs for advanced assurance that if a member purchases shares over the value of £500, then the member will be eligible for Enterprise  Investment Scheme tax relief. Under this scheme, shares must be held for 3 years and 20% of the value of the
investment can be used as an ‘income tax reducer’ in the year that the shares are purchased. It took some time to gain this approval and this was finally given for operation from April 2010, after 4 months of trading.

Funding

The remainder of the required finance was raised from grants and a bank loan. h2oPE and Settle Hydro worked together to obtain grants for the scheme. Settle Hydro, working with h2oPE, secured a £50,000 grant from Future Energy Yorkshire and Settle Hydro obtained a £75,000 grant from Yorkshire Forward under its RMT programme. Without this funding the project was unlikely to go ahead, meaning that any learning of benefit to other towns in the region would be lost at a crucial stage in geographic programme development.

Other funding has been raised with loans from Key Fund Yorkshire and the Charity Bank. Planning permission and negotiating with the Environment Agency The planning application was re-submitted after concerns from the Environment Agency (EA). The Ribble is one of the top five salmon rivers in the UK, and because of this a lot of time and effort was spent in consultation with the EA to ensure that the hydro scheme will not have any negative impact on the migration season. The project team has a good working relationship with the EA and sought advice on what further environment information was required.

When the application was re-submitted the original scheme was modified to ensure that the local fish population is unaffected. The new scheme design incorporated all the findings from extensive modelling work - undertaken by an independent expert, with advice from the EA - to ensure that the local fish population is unaffected. The further modelling vindicated the initial independent Fish Report that suggested that drawing some of the water over the Archimedean screw would improve overall efficiency of the existing fish ladder and extend the migration season.

Community support

Despite the low-level visual impact to Settle and assurances that there would be no environmental damage there were some concerns locally about the hydro scheme. Residents were encouraged to find out more about the scheme and show their support by backing the scheme and/or buying shares. Now the Hydro is operational, anecdotal evidence suggests the overwhelming majority of the community who choose to express an opinion are supportive of the scheme.

Installing the screw

The screw was installed close to the original waterwheel and uses part of the existing millrace. The screw sits in a deep angled pit, is 7m long and weighs 7.5 tonnes, most of which is below ground level. It is covered with a mesh which enables visitors to see the Archimedean Screw turning, and care has been taken to enable access for visitors with mobility problems, thus providing a focus for a trip along the improved riverbank pathways.

As part of the EA licence, some work on the fish pass to improve its effectiveness was necessary. Large amounts of debris including boulders that were restricting flow were removed and the notches in the fish pass steps were enlarged. The low wall in the river which sits at the bottom of the fish-pass was removed in order to ensure that the outflows from the fish-pass and the screw are merged making it easier for the fish to find the fish-pass.

Last-minutes hitches

Due to a problem being identified with river levels if the protruding wall was removed, which could have a detrimental impact on fish migration, EA asked for work on the riverbed to be stopped. After consultation it was agreed that a new wall be built just downstream of the screw outflow, funded by the EA. The outcome is that the river situation for the fish is now an improvement on that in place before the hydro was installed.

Learning from the Hydro

The hydro power project will help raise a fund for community use and with interpretation boards beside the generation plant, to explain the use of reverse Archimedes screw technology to generate hydro power, it provides educational opportunities. This project is also unique in that it is the first one to be set up at an existing weir with an existing fish ladder. The EA is keen to use this project as a test case for how a hydro scheme can be developed in these circumstances.

Webcams showing the operation of the screw on the Settle Hydro website and an electronic display to show how much electricity has been generated have been installed. This has been funded by a LEADER grant. Click here to view the live power output, click here for the webcams.

An Information Board and leaflets are also in production to explain how the scheme works and to highlight other aspects of the site such as the old mill and waterwheel and the fish pass.

Funding sources

Yorkshire Forward (RMT Programme) £75,000
Future Energy Yorkshire £50,000
Keyfund loan £20,000
Bank loan £125,000
Shareholders £135,000
LEADER Grant for maximising learning opportunities £45,000

Project delivery

2008
September - Share offer launched
December - Planning permission refused
Share offer closes with target of £100k met
2009
January - Planning permission granted
June - Works starts on site
September - Work begins on the power house
November - Build complete
December - Electricity generated for the first time - and now fully commissioned

Successes

• The scheme became fully operational on 24th December 2009 and is performing as anticipated. There is a steady flow of visitors to the site many of whom are from outside Settle and who wish to replicate the scheme in their own communities.
• The publicity generated has raised the profile of Settle and Yorkshire on a national basis.
• It was surprisingly easy to sell the shares, which shows that people are willing to invest their own money when they feel the project is viable and worthy. A share return on investment is expected to be around year 4 and is hoped to be between 3 and 6%.

Lessons Learnt

• Unlike some other community projects, running a hydro scheme is very much a commercial venture, and has to be organised and run exactly as a business to make a profit, especially during the civil build phase. It is essential that directors and board advisors have an understanding of commerce. It is complex, time consuming and comes with fairly onerous responsibilities, especially in relation to the Financial Services Authority and the Share Issue.
• The project cost more and took several months longer than anticipated; without commercial acumen the Directors may have found the cash flow pressure insurmountable. It is important to have the right mix of community volunteer directors from the beginning of the project.
• The biggest lesson is that a community can achieve something outstanding and unique, when given the right help and guidance, and financial input where appropriate, from the relevant statutory bodies. h2oPE is able to operate at risk (ie without payment until all the finances have been obtained) with community
groups and therefore remove the funding, knowledge and time barriers which may prevent some community groups from going forward.

More about this success story
To find out more about the Settle Hydro please visit: www.settlehydro.org.uk
Or contact:
Ann Harding
01729 823155
ann@settlehydro.org.uk

To find out more about how Water Power Enterprises ( h2oPE) can help your community to develop a community owned hydro scheme, contact:
Steve Welsh
07964 106037
steve.welsh@ h2oPE.co.uk

Andrew Laycock
Economic Development Unit
Craven District Council
Council Offices
Granville Street
Skipton
North Yorkshire
BD23 1PS
01756 700600
alaycock@cravendc.gov.uk

Jacquie Boulton
Yorkshire Forward
Spitfire House
Aviator Court
Clifton Moor
York
YO30 4GY
01904 696711
jacquie.boulton@yorkshire-forward.com
 

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