From the cost estimates received, the amount required to achieve the scheme is likely to be between £1.0 and £1.3 million. This will cover all expenditure required to construct the scheme plus leasing and initial operating costs.
Estimated Annual Income from the scheme
- Once commissioned the scheme should achieve an annual income of approximately £200,000 per year. This revenue will be made up from the Governments Feed In Tariff plus the sale of the electricity
- In the first 15 years
- £90,000 pa will be used to repay the finance, (assuming that we only raise 1/3 needed from the share offer)
- £80,000 pa used to cover operating and administration costs
- £30,000 pa “waterfall” fund to be used on community projects.
- Once the finance is paid,
- The whole amount less operating, running, lease and administrative costs will be available as the “waterfall” fund.
Methods of financing being investigated are:
- Loan Financing (70%)
- Community Share Offer (30%)
Assumptions
The following assumptions were made in preparing this plan:
- Forestry Commission Scotland (FCS) continues to give assistance and advice relating to the site and their forest operations.
- Sufficient volunteers from the islands are available to offer expert services
- Capital costs will be paid within 15 years of the scheme starting to generate. While these charges are being repaid the community will receive a gifted annual income of between £20,000, and £50,000. The remaining surplus will be retained to cover repairs, spares and for a decommissioning fund
- The scheme should generate 1136MWh based on a 36.5% capacity factor
- Interest rate for repayments to cover the loan/equity stake 8%pa and to cover share interest will be 4%
- FCS lease costs £6,000 pa
- 3% inflation in electricity prices
- Feed in Tariff rate 12.48p per kilowatt
- Contingency for planning stage 20%
- Contingency for construction phase 15%
Expenditure and Income
|
Capital Costs |
|
|
Planning, Development, Legal & Design |
£120,000 |
|
Construction |
£800,000 |
|
Contingency @ 20% |
£184,000 |
|
Total |
£1,104,000 |
|
Annual Operating Costs |
|
|
Lease |
£6,000 |
|
Maintenance and Operating |
£40,000 |
|
Decommissioning fund |
£12,000 |
|
Spares and repairs |
£20,000 |
|
Total |
£78,000 |
|
Income (excl inflation) (based on 1136MWh) |
|
|
From Power Sales (based on PPA of £55/MWh) |
£62,480 |
|
From Feed in Tariff based on £124.80/MWh |
£141,773 |
|
Total |
£204,253 |