Investigation of the Feasibility of a Local
Government Owned Wind Farm
Consultant Brief
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Table of Contents
1.
Introduction ................................................................................................... 3
2.
Background Information ................................................................................ 3
3.
Scope of Work .............................................................................................. 4
3.1 Task 1: Review the energy use of four Councils ..................................... 4
3.2 Task 2: Wind farm development site location and technology ................ 5
3.3 Task 3: Wind Turbine Technology .......................................................... 5
3.4 Task 4: Revenue Contractual Arrangements .......................................... 6
3.5 Task 5: Indicative Project Ownership Model ........................................... 7
3.6 Task 6: Indicative Financial Model ......................................................... 9
3.7 Task 7: Investigation of directly procuring “green energy” .................... 10
3.8 Deliverables ........................................................................................... 9
4.
Scheduling of the Work ............................................................................... 10
5.
Project Management .................................................................................. 11
6.
Budget ........................................................................................................ 12
7.
Copyright .................................................................................................... 13
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1.
1.1
Introduction
On the 9th February this year Hobart City Council (HCC) passed a motion that a
report investigating the potential to develop a council owned wind farm on
appropriately located council or privately owned land be prepared.
1.2
Council also directed that the willingness of the Southern Tasmanian Councils
Authority (STCA) or other councils to participate be explored.
1.3
As a result the HCC looking to engage a consultant to produce a report to
investigate the technical and commercial issues involved with such project.
1.4
This document is a brief to consultants who may be engaged to produce the
required report.
2.
2.1
Background Information
The motion passed by the Hobart City Council for the production of the report is
provided in Appendix A.
2.2
Further information on HCC’s activities in relation to actions relating to climate
change refer to the document “Hobart’s Climate Change Strategies x 5 “ which
is available for download at:
http://www.hobartcity.com.au/content/InternetWebsite/Environment/Climate_Change.as
px
2.3
HCC spends $2.8 million per year on electricity bills (which includes $1.1
million on street lighting). It is expected that these costs will rise further due to
increases in wholesale energy prices and the increase in electrical network
charges. The key driver behind HCC wishing to investigate the feasibility of a
council owned wind farm is primarily the reduction of greenhouse gas
emissions attributable to the Council’s corporate activities.
2.4 The motion that passed by the HCC suggests that the wind farm to be
investigated could be jointly owned and developed by a number of councils in
the Southern Tasmanian Councils Authority (STCA)., or other councils.
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2.5
For this reason the brief contains activities that relate to multiple councils.
2.6
The engagement of consultants to produce the report, and the coordination of
other Councils’ contributions to the data that is needed by the engaged
consultant, will be undertaken by the HCC.
3.
3.0
Scope of Work
The stages and tasks associated with the Scope of Work are detailed below.
Stage 1
3.1
Task 1: Review the energy use of participating Councils
3.1.1 In order to identify the characteristics of a wind farm that should be considered,
it is important to establish the current status of electrical energy use for which
each council is directly billed by the electricity retailer.
3.1.2 The participating councils will provide the consultant with the information on the
quantum and cost of their total current corporate electrical energy consumption
or provide a business authorisation and the National Meter Identifier (NMI)
codes for the consultants to get the information directly from their retail
providers.
3.1.3 This needs to be an annual average based on the actual electrical energy
usage of councils, excluding water and sewerage. This can either be:
 related to an extrapolation of actual usage since 1 July 2009 when the
Water and Sewerage Corporations took over these assets, or
 a best estimate based on past data with a deduction for water and
sewerage usage, or
 based on emissions and energy (Planet Footprint or other) reporting,
excluding water and sewerage, pursuant to the ‘Statewide Partnership on
Climate Change between the State Government and the Local Government
Association of Tasmania, on behalf of Local Government.’
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3.2
Task 2: Wind Turbine Technology
3.2.1 This task is to present the wind turbine technology that would likely be used for
the wind farm development/s.
3.2.2 It should be based on all of the electricity that is used by Councils, being the
same as that expected to be generated over a 12 month period, assuming
appropriate generator availability factors for maintenance and wind conditions
for the proposed typical locations (i.e. allowing for the times when the turbines
are not generating power)
3.2.3
This task should briefly present:
The number of large scale utility-size wind turbines of capacity in the
1.5MW – 3.0 MW range required to generate 100% of the participating
councils’ current needs and any residual capacity involved

the alternatives of :
o a lesser number of large scale turbines
o a smaller scale wind turbines in the 150 kW – 400 kW range.
3.2.4 It should then at least discuss the choice of wind turbine size range in relation
to:

Energy output and economic viability considerations

Aesthetics

Land utilisation

Operations and maintenance

Constructability

Market availability of the different size ranges

Electrical network interconnection

Potential environmental impacts
Stage 2
3.3
Task 3: Wind farm development site location and technology
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3.3.1 This task involves reviewing the outcomes of stage 1 and any ramifications for
the brief and the fee.
3.3.2 It requires the identification and evaluation of at least two potential wind farm
sites, where there is a reasonable likelihood that various permits and approvals
could be obtained, and the wind turbine technology that could be utilised to
provide for up to 100% of the participating councils’ current consumption of
electrical energy.
3.3.3 The two potential wind farm sites should be within a 100km radius of Hobart.
3.3.4 The purpose of this task is to identify sites that are “indicative” of the sort of site
that could be developed if the councils decided to proceed. It is not necessary
to find a site that actually could be developed, but to demonstrate that sort of
site that may be suitable for development.
3.3.5 This task should present and explain the attributes that make a site suitable for
a wind farm development such as wind regime, access to transmission, land
use suitability, environmental issues and social impact.
3.3.6 A qualitative explanation as to how difficult it is to find a suitable wind farm site
should be presented.
3.3.7 After reading the work done in relation to this task, the reader should
understand the key characteristics required to make a wind farm site
economically and environmentally viable and socially acceptable.
3.4
Task 4: Indicative Project Ownership Model
3.4 .1 This task is intended to describe ownership models that could be utilised by the
Council/s in order to develop a wind farm.
3.4.2 Examples of such ownership model/s, either from Australia or internationally,
should be provided. The following models at least must be presented:

HCC ownership
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
Multiple council ownership

Joint ownership by one or more councils with non-government partners
3.4.3 The advantages and disadvantages of the models should be evaluated and
presented.
3.4.4 Review the outcomes of stage 2 and any ramifications for the brief and the fee.
3.5
Task 5: Revenue Contractual Arrangements
3.5.1 This task is to identify the contractual methods by which the owners of the wind
farm could expect to gain revenue from the wind farm and/or achieve
reductions in electricity payments to retailers. Some questions that need to be
addressed by this task are:

What are the likely contractual methods for gaining revenue from wind
farms of the scales assessed in Task 2?

What are the advantages and disadvantages associated with the different
contractual methods?

Is a power purchase agreement with an electricity retailer, high voltage
transmission company or distributor required?

Can and should the wind farm operate in the national electricity market
and take “spot price” for the energy produced i.e sell into the market at
the prevailing spot price rather than through an electricity purchase
contract

Can the output of the wind farm be directly used to off-set energy used by
the Councils’ assets?

How are “network use of service” charges allocated to a wind farm
operator?
3.5.2 There needs to be a brief discussion of Renewable Energy Certificates (RECs)
and what options participating councils have in regard to their retirement or
sale, and the potential impact on total revenue.
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3.5.3 This task is not intended to be a full regulatory review on the development of a
wind farm, but is intended to provide some insight into how revenue from the
wind farm and/or reduction in electricity usage costs will be secured.
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Stage 3
3.6
Task 6: Indicative Financial Model
3.6.1 In the light of Stage 2 task 3.5.4 a simple Microsoft excel based financial model
is to be provided.
3.6.2 For the options for the development for the site selected from those described
in Tasks 2 and 3 it should show:

“typical” capital and fixed and variable operating costs and revenues

the net financial impact on participating councils taking into account their
actual electrical energy purchasing costs through the retail provider
3.6.3 It is acknowledged that the costs of projects will vary dramatically from project
to project, and as such the costs presented are “indicative” of a typical or
average project of the size identified in Task 2.
All assumptions used in
describing a “typical project” are to be included in the report. Some indication of
the approximation of the values is to be included (e.g. +/-30%).
3.6.4 The financial model should at least incorporate the following:

Cost assumptions of the wind turbine technology (purchase, installation,
operating and maintenance);

Cost assumptions for the other development costs normally associated
with a wind farm development;

Revenue assumptions for the energy generated by the wind farm
(including those made in regard to RECs);

Depreciation and taxation implications;

A scenario analysis providing an project profitability analysis for scenarios
considered to be most relevant.
3.6.5 It is noted that Treasury in State government typically requires a 7% return on
assets for infrastructure and this is to be included in the model.
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3.7
Task 7: Investigation of directly procuring “green energy”
3.7.1 This task is intended to investigate and compare the overall costs and benefits
of the alternative of buying wind generated (or other “new” renewable
Tasmanian generated) power directly from another ‘green energy’ power
generator and/or retailer, with a Council owned wind farm
3.7.2 The advantages and disadvantages of buying “green energy” directly from a
market retailer or purchasing and retiring RECs instead of HCC being one of
the parties owning a wind farm should be discussed.
3.7.3 The market mechanisms and current market costs and trends for green
energy should be presented.
Stage 4
3.8
Deliverables
3.8.1 The key deliverable is a report outlining the information and analysis resulting
from the tasks described above. The report should also (as a minimum) include
a section providing:

An Executive Summary;

Conclusions; and

Recommendations,
3.8.2 A draft report will be provided for review by, comment on and discussion with
the project team on behalf of the client.
3.8.3 A revised final report will then be submitted.
3.8.4 The draft and final reports will be delivered to the Hobart City Council as two
hard copy printed versions and also in electronic format Word and pdf.
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3.8.5 The financial model should be provided separately in Microsoft Excel electronic
format.
4.
Scheduling of the Work
4.1
The project is expected to commence by 1st July 2010
4.2
Stage 1 should be completed by 19th July 2010
4.3
Stage 2 should be completed by 30th August 2010 (including 2 weeks for client
consultation)
4.4
Stage 3 should be completed by 20th September 2010
4.5
Stage 4 Draft should be completed by 27th September 2010
4.6
Stage 4 Final should be completed by 25th October 2010 (including 2 weeks
for client response and consultation)
4.7
5.
5.1
The final report will be completed October 31st 2010
Project Management
The project will be managed for the Hobart City Council as client by the
following project team:
Barry Holmes (Manager City Planning)
Scott Morgan (Group Manager Professional Services)
Katrina Graham (Environmental and Climate Change Projects Officer)
5.2
Day to day management will be by:
Name:
Barry Holmes
Email:
holmesb@hobartcity.com.au
Landline:
(03) 62 382 852
Mobile:
0437 584 002
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6.
Budget
6.1
The total sum allocated for the project is $18,000 exclusive of GST.
6.2
Notionally the allocation to each of the seven project tasks is as follows:-
Element
Task Value
Task 1
$1,750
Task 2
$2,500
Stage 1
Task 3
$3,750
Task 4
$2,500
Task 5
$2,250
Stage 2
Task 6
$2,250
Task 7
$2,000
Stage 3
6.3
6.4
Stage
Cumulative Total
$4,250
$4,250
$8,500
$12,750
$4,250
$17,000
Stage 4
$1,500
$1,500
$18,500
Totals
$18,500
$18,500
$18,500
Payments will be made as follows:
Inception
$1,000
Stage 1 Completion
$3,250
Stage 2 Completion
$8,500
Stage 3 Completion
$4,750
Stage 4 Draft
$1,000
Stage 4 Final
$500
The following support will be provided by Council in the execution of the tasks: -
 cartographic support in the production of Maps (but not GIS based
information if required and agreed except within the Hobart City Council
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municipal area only) that may be required for the report provided at an
agreed suitable scale
 printing and reproduction of the report
7.
7.1
Copyright
The Hobart City Council holds copyright on all material produced by the report .
The Council holds the option of producing further copies of the report including
work done under the authorship of any consultants. Any consultants
commissioned for the carrying out of all or part of the project may subsequently
publish material obtained by them during the preparation of the report project,
but may not publish the final report without permission of the Council.
May 2010
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