Council admits that a costly solar energy scheme has failed

07:07 Wednesday 25th November 2015
BBC Radio Cambridgeshire

DOTTY MCLEOD: The final chapter in Peterborough’s controversial solar farm saga is set to be written today after three years and a cost of over £3 million to the taxpayer. The proposed scheme for America Farm will join those for Newborough Farm and Morris Fen in the City Council’s history books, after being judged financially unviable. later on the Council is expected to accept proposals to drop plans for thousands of solar panels at America Farm. Sara Varey has been looking back on the solar saga.
SARA VAREY: The opening line as delivered by Council Leader Marco Cereste in October 2012 promised an annual income of £7.5 million for the next twenty five years, to be achieved through the Government’s generous feed-in tariff scheme, that offers cashbacks for generating green energy. Three Council owned plots were identified, America Farm, Morris Fen and Newborough Farm. The tenant farmers clamoured their families’ futures were in jeopardy. John Harris voiced his feelings during the debate here on Radio Cambridgeshire in December 2013.
JOHN HARRIS: It’s just absolutely devastating for the countryside and obviously for myself and my family. We’ve not had a good night’s sleep since this plan came to fruition.
SARA VAREY: Peterborough MP Stewart Jackson took on the role of clairvoyant.
STEWART JACKSON: Based on the predictions in this business plan, if the funding regime for subsidies changed drastically, that will leave Peterborough City Council taxpayers on the hook very significantly for this project.
SARA VAREY: And so it has come to pass. The Government’s enthusiasm for subsidising renewable energy has waned. In October 2014 Morris Fen and Newborough were written out of the script as financially unsustainable, and the show is now over for America Farm too. But the audience is still waiting for the punchline. How much has it all cost? Newborough resident Alex Terry says it’s time for the big reveal.
ALEX TERRY: You should release the financial data. You’re earning money to save the people of Peterborough you say. So prove it. (APPLAUSE)
DOTTY MCLEOD: Local resident of Newborough there Alex Terry finishing that report from Sara Varey. We did ask Peterborough City Council to come on this morning for a chat. They’ve sent us this statement instead. It reads: “The decision to withdraw plans for the two largest sites followed a Government announcement that it was withdrawing support from large-scale solar projects. America Farm was the scheme’s smallest site. Cabinet will this morning consider a recommendation to cease this project. This is because DECC the Department of Energy and Climate Change is set to significantly reduce the level of feed-in tariff payments to ground-mounted solar by around 80% in the New Year.” Well Dale McKean will talk to us. He was the Conservative councillor for the Eye and Thorney ward when plans were first put forward for these schemes three years ago, and he also sat on the Rural Scrutiny Committee at Peterborough City Council. Morning Dale.
DALE MCKEAN: Good morning Dotty.
DOTTY MCLEOD: Now did you realise .. did you realise when these schemes were mooted three years ago that these feed-in tariffs might drop off? Did you consider that as a possibility?
DALE MCKEAN: Well let me give you an overview of what happened while I was councillor for two years for the ward of Eye and Thorney. Half way into that term the models came forward to the Rural Scrutiny Committee. Prior to that there were opportunities to go and visit current solar sites, and obviously a lot of documentation, given the significance of the investment that was going on. I looked into that in detail and went on the site, and came up with a number of questions, and was somewhat concerned about the financial model that was being presented, because it was very light indeed. And when I pointed out to the consultant these questions, such things as why are you doing them three metres high instead of two metres high where the other site I visited was, how are you going to cut the grass so it doesn’t grow too high and stop them working, if you use weedkiller, how are you going to recover the site after twenty five years back to arable use. So there’s many questions that I asked during that first scrutiny committee.
DOTTY MCLEOD: And did you get answers?
DALE MCKEAN: I didn’t get the answers, and it was clear that the financial models haven’t taken them into account either.
DOTTY MCLEOD: Well it sounds like in general things just haven’t really been thought through in any detail at all Dale.
DALE MCKEAN: No they hadn’t, and it was insisted that they came back with a detailed model with a sensitivity analysis. And they did, about six months later maybe. And at that point it became very evident that the Government was going to reduce the amount of feed-in tariff. So they costed up the thing correctly and took many things into account which they should have done initially, and they tried to convince us in terms of America Farm that even though it was a negative payback, and at that point they had spent nearly £1.8 million on this project, that the project should still go ahead. And obviously because of various voting systems and whatever, they continued with this.
DOTTY MCLEOD: So you clearly think Dale, you clearly think that the whole thing was not handled well from the start. What should happen now?
DALE MCKEAN: Well absolutely. And what should happen now is there should be a clear investigation. There should be an investigation of how they spent this extra £1.2 million, if the total is going to be £3 million, an investigation of how the consultants got it wrong, an investigation of council officers, why they got it wrong, and an investigation of the Council Leader at the time, because he got it wrong. And they have been playing Risk with council taxpayers’ money, and they should be brought to account as a consequence.
DOTTY MCLEOD: I mean Marco Cereste, we can’t have asked him to be a clairvoyant though. Maybe he really didn’t realise that these feed-in tariffs were going to be reduced.
DALE MCKEAN: It was very clear over two years ago that the Government was going to reduce these tariffs. But even without that, the financial models didn’t stack up for solar. The way they stacked up was a combination of solar and wind. And that was the real payback. Now we’ve invested as ratepayers £3 million into this. And at the time it was going to be spread over 25 years payback. That means we’re going to payback this in twenty or twenty five years. And if there’s not going to be a twenty year payback, that means in the last three years we’ve lost £3 million which could have been used on services.
DOTTY MCLEOD: And how much is £3 million, in the context of Peterborough City Council? What could that have paid for?
DALE MCKEAN: Well it could have paid for many things. As we well know, children’s care, adult care, Alzheimers support. It could pay for many things. And for them to take a risk on a project like this, which became very unviable very early, is unacceptable.
DOTTY MCLEOD: of course an investigation into this, that would cost more money wouldn’t it Dale?
DALE MCKEAN: Well I think the Audit Commission ought to investigate it. I think the Government ought to get involved and investigate why this council took this risk.
DOTTY MCLEOD: OK. Strong words there from Dale McKean, who was a Conservative councillor for Eye and Thorney ward when these plans for the various energy park sites on the outskirts of Peterborough were put forward three years ago. He also sat on the Rural Scrutiny Committee.