6. Direct Electricity Supply

6.1 Introduction

This section outlines the opportunities that are created by the Maerdy Windfarm for a discounted direct electricity supply to a local industrial consumer with the implicit economic benefits for new local jobs.

For such a scheme to be taken forward would require significant support from the Council and positive results from additional research. However, the windfarm site has specific intrinsic qualities facilitating such a scheme, that the Developer suggest warrants further investigation.

A successful scheme would be a long term development requiring probably a number of years to realise, but could yield significant local economic gains.

 

6.2 Electricity Cost Principles

The price paid by electricity consumers be they industrial or domestic is primarily a combination of the wholesale cost of the electricity and the cost of its transmission over the national gird and local distribution networks. Most consumers are supplied by licensed electricity suppliers who use the national grid and local distribution networks.

An electricity supply that avoids the national grid and local distribution networks, avoids the costs associated with these and therefore has the potential to be cheaper.

For direct supply to be possible, the distribution and transmission networks need to be avoided. There are existing examples of integrated generation like this. Some very large consumers have their own generation plant on site and other small scale consumers may have contributory on site generation such as a small wind turbine or diesel plant, etc. Direct supply basically requires generation and consumption to be on the same site.

It should be noted that other elements of the cost structure also need to be taken into account, and these may counter savings made in avoided transmission costs. See Section 6.4. Detailed feasibility studies are required to establish savings.

 

6.3 The Potential for Direct Electricity Supply at Maerdy

Most windfarms are located in remote upland environments far away from any electricity consumers. Maerdy is unusual in being located adjacent to a disused industrial site: the old Maerdy colliery site (See Figure 6.1). The windfarm site and the colliery site, while not the same, abut each other. This creates the opportunity for a private supply from the windfarm direct to an industrial consumer located on the colliery site. Electricity could be delivered direct avoiding the distribution or transmission network.

In principle, the key circumstances are available for a direct supply. This could provide the basis for an industrial consumer to purchase electricity at a significantly more competitive rate than it could obtain elsewhere, which could create a strong economic draw for an industrial consumer to locate their plant at the Maerdy colliery site or adjoining land.

Obviously there are many more factors that go into the location decision of any industry, but cheaper directly supplied electricity could be an attractive factor to the right consumer with a high usage.

The Maerdy colliery site has already been re-developed for industry at its lower end and has the scope and capacity for additional industrial development, should this be a route the Council would wish to pursue. It is recognised that there are other informal recreational objectives for the site, (supported elsewhere in this document), but given the existing industry in the south, it is suggested that there may be scope for more than one development route in the area.

Figure 6.1: Location of Windfarm and adjacent industrial development opportunities

6.4 Viability & Savings

The economics of electricity supply are very complicated, highly sensitive, and depend on a large number of factors including:

• The amount that supply from the windfarm can be matched with consumption from the colliery site. If matching is poor, then only a small amount of electricity could be supplied directly and the remainder would have to be sourced as normal from the electricity grid. The better the matching between the generation and consumption, the improved likelihood for savings;
• The additional cost of implementing the direct supply arrangements – installation of additional wires, substations and equipment;
• The marginal difference in energy cost from the electricity grid and from the windfarm;
• The difference in prices paid by the industrial consumer for additional “top up” electricity required which would be more intermittent and therefore at a higher price. Likewise the lower price received by the windfarm for the generation that was “spilled” into the grid when it was not wanted by the industrial consumer.

Detailed studies would be required, ideally with experience of the energy generation from the windfarm, to model the energy flows, prices and possible savings available.

 

6.5 Other Parties

To be pursued such a scheme would require the full support of Rhondda Cynon Taff Council. RCT’s support would be required through its ownership of the colliery site; its planning policy regarding the site; its ability to attract the right industrial consumer, etc.

Support of the Welsh Development Agency would also be needed.

Support of a licensed electricity supplier and most probably the local distribution network operator Western Power Distribution would also be needed.

 

6.6 Scheme Development

If such a scheme was of interest to the Council, it is recommended that a working relationship be established to research the opportunity in detail: economics, potential industry, environmental consequences and develop proposals.

It is acknowledged that the timeframe for such a scheme is long, with establishment of the windfarm, attraction of an industrial consumer, planning, construction, etc. However, once secured a commercial competitive advantage would be established for Maerdy, that was long term and the economic benefits with the right consumer may be significant.

 

6.7 Conclusion

The Windfarm proposed at Maerdy is in a very rare, if not unique, situation in being located adjacent to a brownfield site with an industrial development opportunity. This creates the opportunity for a direct electricity supply arrangement that could be significantly competitive to attract industry to locate at the Maerdy site with the associated economic benefits for the area.

Comments on the attraction of such a scheme, and whether further investigation is warranted are invited.