Totnes Weir Hydro
About the scheme
The Totnes Weir Hydro power plant was constructed last year and began generating electricity in December 2015. It has been performing ahead of expectations with electricity generated being higher than forecast.
Designed to withstand at least a one in 100 year flood and the additional impact of high spring tides and increased river levels due to climate change, the scheme has coped admirably with recent storms.
Two Archimedes Screw turbines are generating clean, renewable electricity for Totnes. The scheme is expected to generate around 1,350 MWh of clean electricity each year – enough to power around 300 homes for at least 40 years*.
A new best practice fish pass has been installed adjacent to the turbines to allow more salmon and sea trout to migrate past the weir and spawn in the Dart catchment. An automatic fish counter has also beed installed to monitor the number and sizes of fish using the pass. Extensive research has proven that fish can pass through the slowly rotating turbine with no adverse effects.
A recreational area is being created near the turbine house with information about the scheme and a new canoe launch platform will be created.
* Estimate based on the most recent statistics from the DECC showing that annual UK average domestic household consumption is 4,115 kWh.
The Share Offer
The Totnes Weir Hydro Share Offer launched on 15th March, 2016 with a closing date of 29th April, 2016. Because the total was met prior to that date, the Offer is now unofficially closed. The Share Offer Document was prepared by Triodos Bank Ltd who are handling the sale of shares on behalf of the proprietor and the developer of the Totnes weir site, Dart Renewables Ltd (DRL). Please contact Triodos directly on 0117 980 9593 or email email@example.com if you have any questions about your application or the application process.
Share Offer Document and Investor Questionnaire
Triodos’ Share Offer Document is still available to download for reference here:
Exclusive Opportunity for Tresoc Members
Through its working partnership with DRL, Tresoc secured an option on behalf of its members for a lower shareholding entry point of £1,050, and a period of exclusivity for the application process. We were aware that some folks were not quite fast enough with their applications for the Totnes Weir Hydro Scheme Bond Issue, which was snapped up very quickly (£1.3M was raised in just 10 days). There was a strong level of interest from Tresoc members—around 20% of the £1.3 million raised came from members. We wanted to see more local ownership in the scheme and are delighted with the outcome.
More about the Share Offer
Dart Renewables has successfully raised £304,500 through the issue of 29,000 Ordinary B Shares, representing 18% of the total share capital of the company.
The funds raised will be used to fund enhancements to the scheme, which will enable the supply of electricity to three local organisations (KEVICC, Atmos Totnes and the foundry).
These enhancements include:
• upgrading the electrical control and distribution system,
• installing an additional cable to ATMOS and the foundry, and
• installing an electrical connection at the foundry.
The projected internal rate of return on the shares is 8% per year over 40 years. This is an equity investment, which means that shareholders will potentially own shares for the life of the project. DRL owns the freehold for the site including the weir, land adjoining the weir and the leat, so the hydro power plant can keep generating for 50 years or more. However, the founders of DRL have reserved the option to buy back the shares between 2-5 years, at a guaranteed minimum annual return of 8%. If they choose to exercise this option after, say, 4 years they would pay back the initial amount invested + 8% per annum. For example, an investment of £10,000 would pay back £13,200 (£10,000 + £3,200) after 4 years. Shares can also be traded normally, if people want to cash them in.
Even more benefit
Tresoc will be rewarded with a 1% share in DRL and 3% of the capital raised in return for promoting the share offer to members, thus the offer will ultimately benefit all members.
Notes and FAQs from Tresoc’s information evening on Thursday, 17th March at 6pm in the Methodist Church, Totnes
Significant social and environmental benefits of the scheme were outlined: including the considerable sound and flood proofing of the Dutch -built turbines, a Larinier fish pass with counter/camera monitor – with projected populations of salmon and sea trout improving due to better accessibility, remote control operational capacity, provisions for leisure and educational facilities, and readjustments of the river channel [over time] due to diversions of the water flow.
The maximum power attained by the turbines has been 20% more than forecasted; 400 MWh of energy to date had been produced. Electricity is currently being supplied to to KEVICC School and the Foundry on Babbage Road Industrial Estate, The remainder is going to the grid but will supply the affordable housing at the ATMOS site when built.
The project has been built on budget to the original specification but extra capital is now being raised to pay for the additional cost of laying a cable to the Foundry.
Outline of the principal terms of the share subscription:
• Amount £304,500 with an equity stake in project of 18%.
• Tresoc to be gifted 1% of the equity and 3% of cash raised.
• Long term investment for life of the project.
• Dart Renewables retain option to buy back the shares between 2-5 years with a guaranteed redemption price of 8% per year.
• No dividend will be paid for 2 years, until the bond is re-financed.
• Average projected return of 9% over 20 years.
• Minimum investment of £1K.
• Exclusivity offer to Tresoc Members for 4 weeks until 12th April, 2016. Share offer closes 29 April, 2016.
Several questions from Tresoc Members asked into Dart Renewables’ stipulated 2-5 year option to buy back the shares. Queries relating to this and other questions covered:
Q: Is the buy-back option guaranteed, or inevitable?
A. Pete KIbel (Dart Renewables) iterated that this decision would be taken once it was more fully known how quickly they could raise the capital to buy back the shares and what other needs there might be for funding future projects. If they do exercise the option, it’s a very good deal for shareholders.
Q: How would a decision to select members shares to buy-back might be made: i.e. compulsory purchase or members given the option to nominate their shares to sell back to the company?
A. Again, Pete felt this could not be answered comprehensively at this point in time. Ian Bright (Tresoc) said that if the buy-back option were exercised for only some of the shares, Tresoc would work with members to ensure there was fairness to the process.
Q: Is there a tax on the dividends?
Q: How might shares be transferred if, for example, a share holder dies?
A. It was understood that shares are directly passed into ownership of beneficiary.
Q: Had Dart Renewables considered a loan for the additional £300K and if so, why a share offer?
A. Pete said that a loan had been considered. However, it was felt this was an opportunity to bring a beneficial share offer to Tresoc members.
Q: What extra costs are Dart Renewables needing to cover?
A. Additional costs are for the laying of the extra cable and for upgrading the electrical control and distribution system.
Q: If the recipients of the electricity were to no longer take energy from the scheme, what option(s) might there be?
A. If, for example, the Foundry closed or ATMOS did not go ahead, Pete felt certain that other industries and/or services (Eg: Morrisons) were close enough in the vicinity to ensure there would be a demand. Otherwise electricity would be sold back to the grid.
Q: What may the effects from climate change prove for the Hydro Weir?
A. Ian Bright described 50 years of Dart river flow data that clearly reflects climate change: more intense and localised rainfall and increasing annual volume of rain over time, actually benefitting output.
Q: Why aren’t hydro schemes more visible?
A. Hydro schemes are subject to land and site suitability, which often involves the willingness of land owners to allow such schemes to operate. However, there are a great number of hydro schemes that are somewhat ‘invisible’ in the landscape. There is also regulation over the abstraction levels from river flows, which ensures that multi-service users.
• Attractive feed-in tariff rate locked-in providing government-backed RPI linked income for 20 years.
• School, local industry and an affordable housing development.
Scenarios – power output increasing
Best Case An expected average return of 11.6% /yr. Assuming 5% /yr price inflation: Better electricity unit price, therefore, income if seeing more supply locally when providing 20% to the grid.
Base Case Expected ave. return of 9.4% / yr. Assuming 4% /yr inflation. Providing 40% to the grid.
Worst Case Expected ave. return of 6.2% /yr. Assuming 3% /yr price inflation. Providing 55% to the grid.
Note: Your capital is at risk when you invest, so never risk more than you can afford to lose. The price and value of some investments fluctuate and you may get back less than the amount you invested. Past performance is no guarantee of future performance. If you are in any doubt you should consult a financial adviser.
The first ever Archimedes Screw Fest, Totnes took place at the Hydro Weir on October 15th, 2016. Read about the event here.