Annual demand for electricity in Sark was recorded by Sark Electricity Limited (SEL) at 1,865,000kWh approximately ten years ago. Since then, it has reduced by 28% to around 1,400,000kWh due to a number of hotels closing and some houses and a hotel going ‘off-grid’. High electricity prices are also likely to be suppressing demand. Electricity demand is likely to increase in future with: The re-opening of currently closed hotels. Increased affordability of power (if the unit price is reduced). A shift from bottled gas to electricity for cooking – this could increase annual electricity demand by up to 300,000kWh per year. A shift from oil to electricity for heating – this could increase annual electricity demand by up to 4,000,000kWh per year. A shift to electricity for transport. If Sark’s tractors go electric, that could increase electricity demand by around 500,000kWh per year.

Due to the high cost of energy, most Sark households are frugal with their energy consumption. However, many of Sark’s buildings are very poorly insulated and we could make our energy go further and have warmer, healthier homes if our buildings were more energy efficient. As well as addressing the urgent need for a replacement power system, Sark needs a long-term energy strategy to plan for the shift to low carbon heating and transport and making our buildings as energy efficient as possible. To do that we will need a reliable and scalable electricity system.

Whilst it is a daunting task, Sark has the opportunity to establish a community-owned power system that is safe, reliable and fit for the future. The new system will replace or substantially upgrade Sark’s current system including the generation system and the distribution network up to and including the connections and metering for each building on the island. It will provide a safe, reliable and low carbon energy supply for the island. It will be scalable to meet future needs, including a future where heating, cooking and transport are electricity-based. The new system will be run on an open-book basis to provide power to the island at a fair and sustainable cost.

If the replacement system goes ahead, it will be owned by a new Sark community enterprise – ‘Sark Community Power’. Sark Community Power will not be a subsidiary of Chief Pleas like Sark Shipping. It will be owned by the people of Sark and will have its community purpose and governance established in its articles of association. The electricity price will be set on an open book basis at the price required to cover running and finance costs and build up sufficient cash-flow, unplanned maintenance and system replacement reserves. Sark Community Power will hold an annual general meeting and publish its audited accounts each year. It will continue to operate under the review of the Sark Electricity Price Commissioner who will provide independent oversight of the consumer price set. Ownership and governance structure – to be confirmed through further island consultation and discussions with funders.

The estimated costs for a complete replacement renewables-based system are around £8.6million. This is a preliminary estimate to be confirmed through the design phase, which will also look at a lower capital cost diesel only alternative or transitional system. The capital costs may go up. There could be some savings if parts of the existing distribution system can be retained. £8.6million is a big investment for Sark. However, there are community-owned energy projects in the UK, financed through community shares/bonds, public sector investment and debt finance which are larger. CfR CIC, which is supporting the finance strategy, has managed the financing of community-owned energy projects with a total capital value of over £70million. The objective is to raise the capital from debt-based sources so that the island can retain ownership and control of the system. The finance options being considered include: A Channel Islands-wide bond offer States of Guernsey investment Energy Services Company investment (likely to be too expensive). There is still significant uncertainty in the build costs. We need to complete the design phase to progress the business case, finance strategy and further discussions with funders. To raise finance Sark Power will need a robust business case showing sufficient cash-flows to cover operating and finance costs (including interest during construction) and that construction and operational risks are understood and managed. The replacement system is essential infrastructure and needs to happen. If finance and/or build costs are too high to enable it to happen and provide affordable electricity, grant funding or subsidised investment will be required. It may be beneficial to separate the financing of the generation system and the distribution system.

The current system has been declared past it’s serviceable life and in parts dangerous. Sark needs a replacement power system. Continuing indefinitely with the current system is not an option. ​ If the build costs and/or finance costs are too high for the replacement system to deliver power at affordable prices with commercial investment, we will need to secure grants or low cost government finance. We will explore these options anyway as, even at current rates, electricity prices on Sark are twice the rate on Guernsey and the power system is critical infrastructure. The electricity price for the new system will depend on the build cost, finance costs and likely increases in electricity consumption (e.g. as households shift from bottled gas to electricity for cooking). A key purpose of the design phase is to firm up costs so we can engage funders. The electricity price on Sark is regulated and Sark Community Power would have to set prices in accordance with the Sark Electricity Price Control Orders. A diesel-only system would avoid the cost of the wind turbines, battery and solar array. However, the distribution network still needs replacing. Electricity prices with a diesel only system would be higher (probably over 80p/kWh) and would leave the island exposed to diesel price volatility.

In January 2024 Chief Pleas approved the proposition to progress the design phase works, with an investment of £175,000. This investment should be repaid to Chief Pleas if the replacement system goes ahead. From April to September 2024 the design phase works will be rolled out, including: Produce a detailed design and costing for a renewables-based system and an alternative / transitional diesel only system. Produce a detailed design and costing for a replacement distribution system, including cable routing and assessing potential cost savings if some of the existing distribution network can be salvaged. Plan for key risks including transport and access of equipment, construction logistics and ground conditions. Identify sub-contractors, including island contractors. Provide the information needed for a planning application. Inform the business case and financing strategy for the replacement system and further discussions with funders. Progress set up of Sark Power. There will be an Island Hall meeting during and at the end of the design phase. Sark contractors and people with relevant experience will have the opportunity to meet the selected lead contractors Infinite Renewables and Sancus. Looking forward, Autumn 2024 will see a decision made on how to proceed. During Winter 2024 focus will be on finance raising and equipment procurement. 2025 could see the construction of new power system. If it goes ahead it is likely to take around 12 months.

A renewables-based generation system that would be based on wind and solar with a battery and 100% diesel back-up to ensure a continuous supply. 2 x 225kWp wind turbines (30m tower and 29m diameter rotor) A field of solar panels (approx. 500 kWp) A battery (approx. 500kWh storage capacity) to stabilise the system Diesel generators providing 100% backup ‘Micro gird’ control management system A simple building to house the generators, batteries, distribution boards and workshop Distribution system £4.8million (preliminary estimate) Replacement 11kV (or 3.3/6.6kV alternative) high voltage network built and maintained to UK standards Low voltage network replaced up to individual properties (excluding any upgrades required to property) Scalable to future needs where cooking, heating and transport are electrified Control and billing system to enable low cost ‘heat tariff’ for hot water and storage heating when there is a surplus of wind or solar The design phase will also look at a diesel only alternative or transitional system. Whilst a diesel only system will be cheaper to build, it is likely the cost of electricity will be higher than for a renewables- based system due to the ongoing cost of fuel. Whether the generation system is diesel or renewables-based, the distribution network still needs to be replaced or substantially upgraded. The design phase will look at what parts of the existing network could be salvaged and whether the system could be installed in stages. It may be possible to run the diesel generators on bio-diesel (Herm has done this). It would be interesting to look into the potential for turning waste cooking oil into usable fuel.

The design phase will look at an alternative / transitional diesel only system. A diesel only generation system would be cheaper to build than a renewables based generation system. However, the cost of electricity will be higher due to the ongoing fuel costs, and the world is shifting to green power. Even with a diesel only generation system, the distribution system (the cables and transformers) still needs replacing or substantially upgrading. The cost of replacing the distribution system is over half the overall cost.

The proposed location for the wind turbines is in island-owned fields above Creux Harbour with the solar array nearby. Other locations on Sark that respect the natural beauty of the Island will be considered during the design phase. The diesel generators and batteries will be housed in a new agricultural-type building near to the abattoir. Location plans and photo montages will be produced during the design phase.

Two companies have been selected to design and build the replacement power system. Infinite Renewables, who will design and build the generation system, is a renewables company with experience in hybrid renewable energy systems combining wind, solar and battery storage. Sancus Utilities, who will design and build the distribution system, is a civil and electrical engineering contractor with experience in high and low voltage distribution systems and electrical infrastructure for renewable energy generation. Sancus also have experience in telecoms and marine infrastructure. Both companies are committed to helping Sark deliver the replacement power system. Infinite Renewables and Sancus were selected through a 3-stage tender process over 12 months: A request for expressions of interest was sent to over 50 companies (including all who had previously shown interest in Sark) and to the open market via the Guernsey Gov procurement portal. As well as providing indicative proposals, companies responding had to meet standard pre-qualification criteria covering company finances, insurances, director standing and company policies. Responses were received from 7 companies from which 3 were short- listed: Infinite Renewables with Sancus, Eaton and Schneider. The 3 short-listed companies carried out island visits and prepared full proposals. Further information was required from all 3 to be able to make an informed recommendation. IRL and Sancus scored the highest on evaluation criteria covering experience, preliminary design and costing, company policies and approach to using local contractors. There were strong elements to both the Eaton and Schneider proposals but ultimately their systems were too high spec and cost to be affordable. A design phase scope for the generation and distribution systems was drawn up and agreed with Infinite Renewables and Sancus, and their costs for the design phase confirmed. The tender process was managed by CfR CIC. Energypeople and Guernsey Electricity reviewed the tender docs and supported CfR in the review of the bids and bidder discussions. Chief Pleas Future Energy and Policy and Finance Committees had the opportunity to meet the 3 short-listed companies and review the tender documentation, bidder responses and tender evaluation and scoring.

Use of local sub-contractors was a requirement of the tender. Infinite Renewables and Sancus are keen to use local Island labour and resources wherever possible. They will seek quotes from Island contractors for the following: Supply and install of the new power station building. Construction of the access tracks and crane pads for the wind turbines. Solar farm piling and framework installation. Trenching and other civils work for the distribution system. Materials transport. Equipment hire. Individuals with sufficient experience could be employed directly by the contractors to undertake civil and electrical works. Local contractors had the opportunity to meet Infinite Renewables and Sancus at the start of the design phase. Sub-contractors selected by Infinite Renewables and Sancus will be subject to Sark Power’s approval.

The design works are expected to take around 18 weeks (e.g. March – July 2024). If the system goes ahead, equipment and sub-contractor procurement and financing will take at least another 6 months. Construction will take around 12 months. Therefore, we are at least 2 years away from commissioning a full replacement power system. A transitional diesel generation system could be installed much quicker if required.

The design, build and operations contractors will be required to design, build and operate the system in accordance to Guernsey electrical safety and quality of supply standards (which are largely the same as the UK). Therefore, we will ‘adopt’ Guernsey standards through the design, construction and operations contracts. Reputable contractors will only be willing to build to industry best practice, and UK-level standards will be needed for insurance.

Replacement power system asset and its expected operational life: Solar array - 30 years Wind turbines* - 20+ years Diesel gen-sets - 10+ years (depending on load hours) Battery - 10+ years (depending on full load cycles) Distribution network transformers - 40 years Distribution network cabling - 40 years *The design phase will consider wind turbine options including reconditioned turbines. Reconditioned turbines can be restored to ‘as new’ condition and come with a 20 year combined warranty and service and maintenance agreement.