Background: A 970ha (2400-acre) rural estate in the Peak District, owned by the FitzHerbert family. Most of the 13 farms have tenancy agreements. There are 42 houses and seven commercial lettings, as well as Tissington Hall itself, a magnificent country house. Recently the estate has focused on developing enterprises to service a booming tourism trade.
Energy load: 800 kilowatts (kW) – a total of 1200 megawatt hours (MWh) per year. The hall and village use an estimated 300MWh of electricity per annum.
Current system: Mainly oil-fired, served by a number of tanks dotted round the village. The heating bills on the estate alone amount to an estimated £41,000 a year.
Mr Pollock’s renewable solution: A biomass woodchip burner is the preferred option. Dairy farms could supply slurry for an anaerobic solution, but technology is less reliable and transporting slurry into the village could be unacceptable.
Capital cost: Plant would cost around £120,000 with a similar figure for specialist heating pipes at £100 a metre to service the cottages. Adapting the plumbing would cost another £60,000, bringing a total capital cost of £300,000.
Annual cost: 280t per year of willow woodchips would be needed, from 28ha (70 acres). Assuming this is supplied by tenant farmers at £55/t delivered (£10-15/t more than power station contracts) the cost of fuel would be £14,000, with an additional £6000 per year for admin and maintenance.
Revenue: Current price of oil is 39p/litre, which equates to 3.4p/kWh, making a potential total revenue of £41,000. This leaves a profit to service capital outlay of £21,000 per year (or 7% excluding any grants or tax advantages).
Grants: The main source of grants for renewable energy systems is the Low Carbon Buildings Programme This offers different streams of grant for private individuals, community groups and commercial organisations. The commercial level grants could be up to 50% of the project cost. There may also be grants under the rural development programme, and local initiatives.
Tax: If a separate company is set up to run the scheme, this can qualify for reinvestment relief allowing 40% capital gains to be rolled in. There are enhanced (100%) capital allowances for renewable plant. Furthermore, the revenue is Schedule D income, which has obvious benefits for an estate whose main income is assessed under Schedule A.
Verdict: It could be a viable option if it enhances the estate as a whole, believes owner Sir Richard FitzHerbert. “The question is, would someone pay extra to live somewhere that’s greener than green? Maybe not, but it could be an angle to increase revenue from holiday lets.”