Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 1

Our purpose Reading Hydro is a volunteer-led Community Benefit Society. We have an ambitious plan to build a hydro-electric scheme on the river Thames by Caversham Weir, and operate it as a community-owned asset. We aim to reduce carbon emissions, generate revenue to invest into the local community and help to ensure a more sustainable future for Reading.

We intend to install Archimedes Screw turbines beside Caversham Weir and fund improvements to the local environment on and around View Island, including a new fish pass. The turbines should generate about 320MWh of renewable electricity each year from the flow of the water for decades to come. This is enough to supply about 90 homes at average consumption.

We also aim to use the turbines as an educational resource, both visually and through open data, with live data monitoring of flow rate, water temperature, water levels and electricity production.

The Reading Sustainability Centre (TRSC), a local Community Interest Company, first realised the potential for generating hydro power at the site. They applied for planning permission in September 2015. In February 2016 the Environment Agency granted the licences required to operate a hydro project on Caversham Weir. To take the project forward, Reading Hydro was formed out of TRSC in September 2016 as a separate Community Benefit Society with members and directors. We have since complied with a wide range of conditions and requests and were awarded planning permission in May 2017.

Hydro schemes produce no emissions of greenhouse gases or other pollutants while they are generating electricity. They also continue to generate at night, when solar schemes stop. Generating electricity close to where it is used also helps cut losses in transmission and distribution, which currently waste about seven percent of UK electricity. The energy used and thus greenhouse gases emitted during manufacture and installation of the project are quickly offset by the energy produced and carbon saved during operation. As the latest independent assessment by the Committee on Climate Change (Jan 2018) makes clear, a “gap in meeting the fourth and fifth carbon budgets remains” and urgent action is required to increase renewable generation.

Hydropower has a long history of use. Our site was recorded as being in use as a water mill in the Domesday Book of 1086, but towards end of the last century we stopped using the river as a source of power at this location. Our scheme will enable the local economy to again benefit from the use of this abundant natural resource.

Once installed, we estimate that the scheme will generate around 320 MWh a year, and provide an income from selling this electricity and Feed-in Tariffs. There may also be possibilities in future for local people to buy electricity directly from us: suppliers like Good Energy are beginning to explore peer-to-peer energy markets, and we intend to pursue this when it becomes feasible.

The grid is moving to a decentralised local model, using energy storage and demand management alongside power generation to meet local needs. Our project fits that model, because Reading is an area of high electricity demand, with limited opportunities for renewable generation, so there will be a strong market for our power for decades to come.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 2

The installation of our turbines will improve the natural heritage by installing a fish pass, as well as generating renewable electricity. Reading Hydro is a Community Benefit Society, with an asset lock and democratic control by its members. This means that the profits from the hydro scheme will be kept for use by the community, after paying shareholders a reasonable return for their investment. The objectives of the society not only include energy generation, but energy conservation, awareness raising and educational initiatives, and profits will be used for work on these areas too.

In December 2019 we launched a community share offer to finance the construction of the hydro scheme, with a target capital requirement of £700,000. We successfully raised £880,574 from 611 investors. However, following detailed design work, the receipt of tenders and the impact of Covid-19, the target capital requirement has increased to £980,000. The updated business plan that follows relates to this increased amount. We will seek to secure the full amount of funding through a new share offer in August 2020.

Our community Reading Hydro is an open and democratic society, with regular communication and meetings with members and the local community. Anyone who supports our aims and agrees to follow our rules may become a member of the society, and all investors in share offers are members. Until Covid-19 restrictions, we regularly attended community events close to our site (e.g. Reading Waterfest, Greenfest, Reading Pride and Caversham Beanpole Day), and recruited more local people as members at each event.

In November 2019, our total membership stood at just over two hundred. By August 2020, following the main share offer, membership has increased to 748. Each member has one vote at Reading Hydro General Meetings, including AGMs, and the volunteer Directors are drawn from, and elected by, the membership. Members are encouraged to become involved at all levels. This currently includes providing specialist help to the board, raising awareness, and helping prepare the site for the hydro construction. We will also use community involvement in the construction of the natural fish pass, providing both a volunteer and educational opportunity. Members meetings, action evenings and community engagement events will resume when Covid-19 restrictions permit.

Reading Hydro is part of and supported by the Reading Climate Action Network. The Reading Climate Change Partnership has invested £4,000 in Reading Hydro, and the Reading Borough Council Local Plan (adopted 4th November 2019) notes “use of [Caversham] weir for generation of hydropower will be acceptable”.

Our project has learned and taken inspiration from other local hydro projects, particularly those on the Thames at Sandford, Osney, Mapledurham, Sonning, and Windsor. The weir at Caversham is the only site identified by the Environment Agency in the Reading area as a ‘win-win’ for hydropower - meaning that it could provide both commercially viable electricity generation and an opportunity to improve the river environment. Local projects inspire people by making renewable energy a local, tangible option – not a distant or even offshore one. The site at Caversham weir is particularly visible and accessible, because it is so close to our busy town centre and has footpath access. Once constructed, the hydro scheme will be a fantastic educational resource for the people of Reading and beyond, demonstrating sustainability right on our doorstep. We will use the accessibility and

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 3

visibility of the scheme to increase public engagement with positive action to tackle climate change. Community volunteers will be able to assist with ongoing tasks such as clearing trash screens and other basic maintenance, and to engage in further activity, such as work to promote using energy more efficiently and reduce energy use.

Our plans Small scale hydropower schemes, such as our proposed installation at Caversham weir, are one of the most cost-effective and reliable methods for generating renewable electricity. They have several key advantages over other renewable energy technologies, including high energy efficiency (70-90%), reasonably predictable electricity outputs (which often correlate with seasonal demand fluctuations) and long lifespans due to their durable design. Small scale hydropower schemes are benign to the local environment as the flow of the river and therefore the surrounding ecosystems are largely unaltered. They are also beneficial to the global environment, as the electricity produced will reduce the demand for conventional fossil fuel generation.

The amount of electricity produced by the turbines is measured in kilowatt hours (kWh) or megawatt hours (MWh =1,000 kWh). The table below shows how many MWh a 46kW system could generate in a day, week or year, depending on the load factor – the % of the rated power that it is producing. The design work for the turbines at Caversham suggest they could operate at about 78% load factor, averaged over a year.

46kW 100% 90% 80% 75% 70% 60% 50% 40% 10%1 Day 1.104 0.994 0.883 0.828 0.773 0.662 0.552 0.442 0.110

Week 7.728 6.955 6.182 5.796 5.410 4.637 3.864 3.091 0.773 Year 402.960 362.664 322.368 302.220 282.072 241.776 201.480 161.184 40.296

Table 1: electricity (MWh) generated by 46kW hydro scheme at differing load factors

Historically, water wheels were used to harness the energy of rivers, but modern engineering has since produced a variety of more efficient turbine designs, including the Archimedes screws that we propose to install at Caversham weir. In this design, water flows downstream through a large metal screw; the rotation of the screw drives the turbine which is in turn connected to an electricity generator via a gearbox. The generator converts the mechanical energy of the turbine into electrical energy which can then be used or exported.

The productivity of a hydropower scheme depends on the flow of water through it. If the river flow is low, then the flow through the turbines may be reduced, or we may be required to shut it off altogether. In addition, we may be required to shut the turbines when the river is in spate. Modelling of the potential generation of a 46kW twin screw system, using historical data on the head and flow of the Thames at Caversham weir, shows how productive our scheme is

1 Solar PV generally operates at only about 10% load factor averaged over a year, but is viable because of its low cost.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 4

likely to be in different seasons. There is consistently high generation in spring, high generation with some variation in winter, and considerable variation in generation over summer and autumn.

Figure 1: Modelled seasonal variation in the load factor for 46kW turbines at the Caversham Weir site

The hydropower site is on unregistered land. It is an embankment of made ground with a public footpath running over it, connecting View Island (owned by Reading Borough Council) and Caversham weir (owned by the Environment Agency). The embankment was made in order to divide the former mill stream from the Thames, and thus channel water behind View Island from above the weir. We have notified Reading Borough Council, the relevant body, of our intention to build on the site, and have been granted planning permission and advice that we have legal access to the land. As the site is unregistered land, with a public footpath running alongside it, we will not need to pay rent. The construction site will temporarily use Reading Borough Council’s land, as will the fish pass, so we are working to finalise the permissions required. We also have the relevant consents (abstraction, impoundment, environmental flood defence) from the Environment Agency. The footpath across the embankment will be closed or diverted for the period of the construction works, which may necessitate a temporary bridge.

94%

60% 59%

86%

0%10%20%30%40%50%60%70%80%90%

100%

Spring Summer Autumn Winter

Seasonal load factor of hydro, 46kW

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Avg.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 5

The Reading Hydro scheme will be inserted into the embankment, between the main weir and View Island. Once building works are complete the turbines or culverts will be surrounded by water and fenced off from the public footpath, with access via a locked gate.

Figure 3: View of downstream weir pool

One of the conditions of planning permission is to include a new fish pass that will enable fish and eels to move upstream more easily. Our fish pass design has been approved. The head of the fish pass will pass under the footpath, and it will cut into View Island from the mill stream where there will be a sluice. The ‘technical section’ of the fish pass will run gently downhill to the existing streambed where the water will flow towards the hydro scheme, eventually joining the river immediately adjacent to the turbine outlet which creates an attraction flow for fish. The fish pass will be a natural and unbounded area forming part of View Island, which is itself is already made up of a variety of natural habitats.

View Island is a low-lying area of land. Apart from the public footpath, the entire area of the island lies below the level of the river above the weir and hence it floods regularly. The island is heavily wooded, mostly by sycamore trees. There are remnants of Caversham House that used to be on the island before it was demolished. The most visible remaining feature is the old tennis court area.

Access to the island is gained by means of a wooden bridge across the mill stream or the walkway over the weir structures. There are two further small wooden bridges that cross the old stream bed on the island. The bed can contain water when the river level is high.

Figure 2: View of embankment between main weir and View Island

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 6

Figure 4: Site Location with proposed development and fish pass

Figure 5: Aerial view of Reading Hydro site and its locality (upstream at bottom of picture)

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 7

Progress towards construction Permissions and approvals

The development of hydropower is highly regulated, with permits required from the local planning authority and the Environment Agency. Reading Hydro, in association with The Reading Sustainability Centre, has secured or is finalising all the relevant permissions to allow construction to take place.2 These are summarised below:

Authority Reference no. Content Approval Status

Planning Permission Reading Borough Council 151715

The installation of two Archimedean Screw Turbines with a hut covering the generators, gearboxes & control system.

Granted 17th May 2017, implemented 17th May 2020

Planning Permission Reading Borough Council 200346

Material amendment to planning permission 151715, the installation of two Archimedean Screw Turbines with a hut covering the generators, gearboxes & control system.

Granted 17th May 2020, implemented 17th May 2020

Abstraction Licence Environment Agency

TH/039/0023/022 Abstraction by gravity flow to a fish and eel pass to 31 March 2028

Granted 19th February 2016

Impoundment Licence

Environment Agency

TH/039/0023/019 Impounding works for the purpose of power production at a hydropower scheme.

Granted 19th February 2016

Environmental Permit

Environment Agency

EPR/DB3258UB

New channel to accommodate screws, semi-natural fish & eel pass, new turbine house

Granted 28th March 2019

Environmental Permit

Environment Agency

EPR/DB3258UB/R1

Variation to permit to extend area of land covered, include dredging of silt and update documentation

Application duly made 29th July 2020

Fish Pass approval Environment

Agency 16/01/T

Fish pass on the River Thames at Caversham Weir Granted 17th February 2016

The turbines themselves are placed on unregistered land, with a public footpath running along the embankment, and Reading Hydro has given the required notices to allow the site to be developed.

2 Licences agreed include conditions on design that require sign-off prior to the start of construction.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 8

Initial estimates of generation indicated a capacity of around 46kW could be installed. Our application to Ofgem for Preliminary Accreditation for the Feed-in Tariff (FITs - the government incentive to cover the increased costs of installing renewable energy generation) was based on 46kW of Total Installed Capacity (TIC). However, detailed design suggests that Archimedes Screw turbines with a capacity of 65kW can be installed, and we are proceeding with this turbine capacity. In order to maintain entitlement to FITs, we intend to install generating equipment (generators and inverters) with a capacity of 46kW. After the expiry of the Feed-in Tariff in twenty years, we expect that the generators will need replacement, and the generating capacity can then be increased to 65kW, matching the turbines and increasing the amount of renewable electricity and income produced for the subsequent twenty years. We are intending to connect the hydropower scheme to an individual customer, using horizontal directional drilling to route a cable under the Thames from View Island to Kings Meadow. Should this not be feasible, we will use an existing connection on the other side of the weir, with cabling using existing provision across the weir: this option would be cheaper but would be constrained to 46kW by the capacity of the mains network. To keep this option open, we have secured a grid connection offer from SSEN. We have an approved design for a natural fish and eel pass using View Island, which will increase the range of species and numbers of fish that will be able to traverse the obstacle of Caversham weir, improving the environment. Raising finance In December 2018, we ran a Pioneer Share offer through Crowdfunder, to overcome obstacles to our progress. This Pioneer Share offer raised £16,025 from 63 community investors, who accepted that their money is fully at risk. Although Pioneer shares have no special rights, the first £12,700 of shares bought were eligible for an interest payment in shares, at the rate of 1:10 when the main share offer is made. We also received £4,000 additional investment from the Reading Climate Change Partnership, and a £15,000 grant from the Reach Fund. This funding enabled us to secure the final permissions needed from the Environment Agency, achieve Preliminary Accreditation for the Feed-in Tariff from Ofgem, and commission detailed designs for the hydropower system.

In December 2019, we launched our initial main Community Share offer to build the hydro scheme, enabling the local community to become more involved in positive action to tackle climate change. We agreed to follow the good practice recommendations of the Community Shares Unit, and to limit the amount of capital held by an individual investor to 10% of our total capital.3 We also wished to encourage a wide, democratic membership and agreed to set the minimum investment at £75, and to encourage investment from the local area.4 Sharenergy managed the application process, while Reading Hydro concentrated on marketing through networks, social media, radio and television coverage.

3 With the exception of Power to Change; if a Community Shares Booster Fund application is successful, we will allow their investment to exceed 10% of share capital. 4 We have defined "local" as of Reading Borough, and postcode areas RG1 – RG7, and RG30 – RG31).

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 9

We identified a target capital requirement of £700,000. At the close of the share offer, on 14th February 2020, 611 investors had applied for a total of £880,574 of share capital. This included investment from the Community Shares Booster Fund of the community business organisation ‘Power to Change’.

However, following detailed design work, the receipt of tenders and the impact of Covid-19, we have had to increase our target capital requirement to £980,000, and are therefore seeking additional investment.

The Directors are confident that this additional investment can be raised. Our marketing for the earlier share offer was effective, with the shares applied for consistently being high for the whole period of the share offer. Comparison with similar share offers suggests that Reading Hydro was effective at attracting investment from a wide range of people at a faster rate than usual, and we are planning to use similar marketing methods to promote this share offer. Since the earlier share offer closed, there have been regular enquiries about whether applications for shares are available, and our existing investors have indicated that they might invest a further £45,000, even after allowing for the repayment of some investors.

Our finances Reading Hydro is a new organisation, which has had limited financial transactions to date, summarised below:

Year ended Income Expenditure Surplus / loss Cash balances Total funds Share equity 30 September 2017 60 60 0 44 44 44 30 September 2018 807 1022 -215 667 -132 83 30 September 20195 15,845 14,166 1,679 20,038 21,541 20,077

Our current financial position includes cash balances of £685,718 at the end of July, and commitments made (consultancy and Archimedes Screws) amounting to £192,000. This share offer should increase cash held by about £200,000, allowing the Society to complete the construction.

Main project costs

The major cost for the hydro project is the civil works. These include dewatering the construction site; creating a channel through the embankment; forming the inlet, drive section support, rough-formed trough and outlet for the turbines out of concrete; and building a turbine house for the controls. Access to the site will be by a floating pontoon, with a crane used at critical points. The cost of civil works has proved to be considerably higher than our initial budget of

5 Income included donations and the grant from the Reach Fund (see p2); expenditure has been on the cost of securing appropriate licences, and technical feasibility work. The share capital provides funding to cover commitments in late 2019 for further technical feasibility and the share offer, shown in Year 0 costs in the financial projections.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 10

£250,000. With support from Renewables First, who acted as principal designers, we undertook a procurement process throughout the first half of 2020. Following revisions of the specification we have selected a preferred contractor, at a contract price of £507,000, with additional cost for access works, grid connection, and the fish and eel pass.

These costs are based on a firm offer based on detailed designs and ground investigations, so the Directors are confident they are realistic. Until the groundwork is complete, there is scope for variation, but this has been priced into the contingency. We have ordered two IT2600 Archimedes screw turbines from Spaans Babcock, at a cost of £223,700 (diameter: 2.6m, design flow: 3.1m3/s, head: 1.36m, three flights, with steel lined concrete trough). Each screw will be delivered and installed together with a non-structural steel liner. The screw and liner will be positioned in the rough-formed trough and grouted into place. The screw and liner are made together in order to create a close uniform gap for maximum turbine efficiency. The outlet section will include a facility to insert stop logs so that the outlet can be drained out for maintenance. Additional costs include the fish pass, which will mostly be dug by volunteers, working under direction. Access costs includes crane hire, with a £15,000 allowance included. Grid connection includes both Horizontal Direct Drilling for a private wire, and an alternative connection (£992) which has been paid. Project income

The financial model for Reading Hydro assumes that the electricity generated receives the Feed-in tariff (FITs). This will currently provide an income of about 8 pence per kWh, which is guaranteed to rise with RPI inflation for the next 20 years. Ofgem has confirmed that Reading Hydro is pre-registered for FITs, under the tariff period commencing 1 January 2019. The ‘tariff date’ for this application is 28 March 2019, and the ‘validity period’ ends on 27 September 2021, although the government has consulted on extending this for a year, because of the impact of Covid-19. To benefit from the FITs, we must convert the application to a ‘full’ ROO-FIT application, and the installation must be commissioned within the validity period.6

Reading Hydro will also sell the electricity produced. If electricity is simply exported to the grid, then we will be paid the grid export tariff, currently 5.24 pence per kWh and expected to increase with inflation. However, we have the option to sell electricity to other customers for a higher price than the export tariff, using a Power Purchase Agreement (PPA). There are significant users of electricity nearby, and we have had positive discussions with Thames Lido. Detailed analysis of their usage over the last year indicates that they could use nearly all our electricity. Thames Lido has provided a letter of intent for a long-term Power Purchase Agreement (PPA), rising with inflation.

After 20 years, the FITs will expire, but the turbines will still be generating. At this point we expect to increase the generator and inverter capacity to 65kW (see ‘Permissions’ above) which will increase the average annual generation by about 33%. We will continue selling electricity on the open market.

6 The preliminary accreditation will be voided if an installation is commissioned which is ‘materially different’ to the one for which we were granted preliminary accreditation (eg different power source, increase in generation capacity).

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 11

Financial model assumptions, and predicted returns to investors and community benefit fund

The financial model assumes that the Feed-in Tariff is paid quarterly in arrears and linked to RPI, which is assumed to increase at 3% per year.

General costs are assumed to increase with CPI, which is assumed to increase at 2% per year, in line with the mandate of the Bank of England.

Direct sales are based on a 20-year PPA, at a sale rate of 11.5 pence per kWh, increasing in line with the FITs. We expect that 95% of the power generated will be supplied direct to the PPA customer, with 5% exported to the grid at the export tariff rate, currently 5.24 pence per kWh.

It is very difficult to predict the demand for electricity and its price in 20 years’ time. Some National Grid scenarios project that rapid decarbonisation could lead to an oversupply of electricity in the 2040s, with insufficient storage capacity to utilise this. Equally, rapid adoption of electric vehicles and heat pumps, for example, could increase demand for electricity as fast as generation increases. Given the unpredictability of demand, we have used a conservative sales price of the current export price, increased with inflation, for years 21-40.

We have allowed £13,900 for external project management during the construction period, plus an additional £9,200 for working capital

We have a 10% allowance for contingency, broken down as: M&E £24,500; Civils (@12%) £61,000; grid connection, access and fish pass £21,800.

The following costs will be capitalised on completion of the work:

1. Development fees: £50,100 Renewables First 2. Marketing and share offer: £25,8307

The £980,000 capital raised during the relaunched share offer will be utilised as follows:

Archimedes Screw Turbines £223,700 Contingency for M&E work £24,500 Civils construction costs £507,000 Contingency for civils £61,000 Fish pass and access works £35,000 Contingency for fish pass and access £3,500 Grid connection £18,300 Contingency for grid connection £18,300 Financing of development fees £50,100 Project Management / working capital £23,100 Marketing and share offer costs £15,500 Total contingency & related costs £130,400 Total construction & development costs £849,600 Total Capital raised £980,000

7 The cost of marketing and share offer to be capitalised exceeds the figure in the table below as Reading Hydro has financed part of this from existing funds.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 12

If we do not immediately secure the full £980,000 for completion of the work, Reading Hydro will extend the share offer. We will also consider commercial borrowing from ethical lenders such as Triodos or Unity Trust Banks, Co-operative and Community Finance or institutional investment or low-cost borrowing from public bodies, lottery funders, and Trusts & Foundation. We have modelled the impact of different scenarios (e.g. higher construction costs, use of short-term borrowing to make up shortfall on share offer). This modelling suggests there may be a delay to development and/or a short-term reduction in profitability. This could delay repayment of capital to investors or reduce the rate of return or community benefit granted for the first years of the project, but does not affect the fundamental viability of the project.

Depreciation is based on the straight-line method. Given the long-term uncertainties over the price of power, a higher rate of depreciation is used for the first 20 years, to reduce the assets to a residual value of £360,000. Depreciation for years 21 – 40 will write off the remaining balance, at £18,000 per year.

Over years 1 to 20 funds will be set aside in an Operating Reserve, to finance the replacement generators and bearings after 20 years, with an assumed £120,000 replacement cost.

The scheme is expected to generate electricity for 40 years. Generation in years 1 to 20 is estimated to be 320 MWh per year, based on generating capacity of 46kW. In years 21 – 40 the capacity is increased to 65kW and the annual generation is estimated to be 33% higher at 426 MWh per year.

Ongoing operational costs include maintenance and servicing of the turbines, which will be contracted out, based on a cost of 0.5% of capital; daily maintenance (e.g. clearing of trash screens, monitoring data); insurance of turbines; and organisational management (bookkeeping, liaison with investors), which is costed upon a quote for external management. We hope that some tasks may be carried out by volunteers, reducing costs, but this is not assumed.

Shareholders will make a long-term investment with the expectation that, once the scheme is built and operating profitably, they will each year receive a return on their investment, and a proportion of their capital repaid. We are aiming for a long-term return of around 4%, which is the minimum we judge necessary to raise the finance, although it will be lower in the first five years. The decision about how much to pay back to investors and how much to pay as a benefit to the community is made by the members at the AGM each year, depending on the finances of the society. As investors are repaid capital, the proportion of the income available to benefit the community will increase.

We intend to make our first payment to investors after the turbines are operational, for the financial year ending September 2021. We expect to make this payment early in 2022, and yearly thereafter. We have modelled an interest rate of 2% for our first years of operation, increasing to our long-term target rate of 4%. As income is linked to inflation, we always intend to pay interest at or above the inflation rate, so if inflation increases beyond the target rate the interest rate will also increase.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 13

Year Year 0. 2019/20 Year 1, 2020/21 Year 2, 2021/22 Year 3, 2022/23 Year 4, 2023/24 Year 5, 2024/25 Year 6 onward Date of investment / payment

Investment made Jan-Aug 2020 n/a Jan-Mar 2022 Jan-Mar 2023 Jan-Mar 2024 Jan-Mar 2025

Interest rate n/a 0% 2% 2% 2% 3% 4%

As a Community Benefit Society, any additional profits earned will be paid into a fund. The funds available for the first 10 years are very limited, providing £14,200 of benefit. The proportion increases to 9% of the net income after operating costs (EBITDA) for years 10 – 20, providing a further £63,500 of benefit. The projected benefit over 40 years is approximately £410,000 (total community benefit paid out, plus cash held for community use).

The society is expecting to repay 75% of the capital raised over the first 20 years of the project. It is anticipated that part of this will be in response to requests for withdrawal of shares from members, and part a pro-rata repayment of all members. In order to manage the cash requirements of repayments, we anticipate running further open share offers to raise funds for repayment, so the members holding share capital in twenty years may be different to those who initially invested.

The tables on the following pages show:

the expected finances over the 40 year period, showing figures at future prices (including inflation) the cashflow on a monthly basis from October 2019 to September 2021, when the turbines should be operational and generating income

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 14

Year (s) For Period Ending

0 Sep-20

1 Sep-21

2 Sep-22

3 Sep-23

4 Sep-24

5 Sep-25

6 - 10 Sep-30

11 - 20 Sep-40

21 - 30 Sep-50

31 - 40 Sep-60

Total Generation (kWh) n/a 127,335 318,338 318,338 318,338 318,338 1,591,692 3,183,384 4,260,864 4,260,864 FIT rate 0.0803 0.0827 0.0852 0.0877 0.0904 0.0931 0.1079 0.1450 Ends in 20 yrs Direct sale price 0.1150 0.1185 0.1220 0.1257 0.1294 0.1333 0.1546 0.2077 Export rate 0.0538 0.0554 0.0571 0.0588 0.0606 0.0624 0.0723 0.0972 0.1250 0.1600 Income FIT £10,532 £27,119 £27,933 £28,771 £29,634 £162,051 £405,640 Direct sales £14,329 £36,896 £38,003 £39,143 £40,318 £220,474 £551,883 Grid export £353 £908 £936 £964 £993 £5,429 £13,589 £532,608 £681,738 Grants & other income Total income £0 £25,213 £64,924 £66,872 £68,878 £70,945 £387,954 £971,112 £532,608 £681,738 Expenditure Operation & maintenance -£4,732 -£4,827 -£4,924 -£5,022 -£5,122 -£26,655 -£61,307 -£72,340 -£85,360 Financing costs /Administration -£25,830 -£5,400 -£5,508 -£5,618 -£5,730 -£5,845 -£30,418 -£69,961 -£82,550 -£97,410 Lease, rates, insurance -£1,200 -£638 -£2,001 -£2,040 -£2,080 -£2,120 -£11,033 -£25,375 -£29,940 -£35,330 Development cost / contingency -£37,236 -£12,864 -£255 -£260 -£265 -£270 -£1,405 -£3,232 -£3,810 -£4,500

Major equipment replacement £63,066 £12,864 Financing & Development costs capitalised

-£120,000 Replacements Total operating costs -£1,200 -£10,770 -£12,591 -£12,842 -£13,097 -£13,357 -£69,510 -£279,874 -£188,640 -£222,600 EBITDA -£1,200 £14,443 £52,333 £54,030 £55,781 £57,588 £318,444 £691,238 £343,968 £459,138 Depreciation -£29,322 -£29,322 -£29,322 -£29,322 -£29,322 -£146,611 -£293,221 -£180,000 -£180,000 Interest to members -£19,920 -£19,520 -£18,920 -£27,190 -£134,766 -£178,498 -£147,054 -£97,527 Community benefit -£700 -£1,250 -£1,350 -£1,400 -£1,500 -£8,000 -£63,500 -£14,400 -£114,800 Taxation -£44,426

Total surplus / loss -£1,200 -£15,579 £1,841 £3,838 £6,139 -£424 £29,067 £156,019 £2,514 £22,385

Reserves b/fwd £3,989 £2,789 -£12,790 -£10,948 -£7,110 -£971 -£1,396 £27,671 £183,690 £186,204

Reserves c/fwd £2,789 -£12,790 -£10,948 -£7,110 -£971 -£1,396 £27,671 £183,690 £186,204 £208,589

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 15

Year (s) For Period Ending

0 Sep-20

1 Sep-21

2 Sep-22

3 Sep-23

4 Sep-24

5 Sep-25

6 - 10 Sep-30

11 - 20 Sep-40

21 - 30 Sep-50

31 - 40 Sep-60

CASHFLOWS EBITDA -£1,200 £14,443 £52,333 £54,030 £55,781 £57,588 £318,444 £691,238 £343,968 £459,138 Capital expenditure -£255,226 -£691,216 Operating cashflows -£256,426 -£676,773 £52,333 £54,030 £55,781 £57,588 £318,444 £691,238 £343,968 £459,138 Shares invested / repaid £980,000 £0 -£19,920 -£29,880 -£39,840 -£49,800 -£209,000 -£358,570 -£169,031 -£120,000 Interest to members £0 £0 -£19,920 -£19,520 -£18,920 -£27,190 -£134,766 -£178,498 -£147,054 -£97,527 Community benefit £0 -£700 -£1,250 -£1,350 -£1,400 -£1,500 -£8,000 -£63,500 -£14,400 -£114,800 Taxation £0 £0 £0 £0 £0 £0 £0 £0 £0 -£44,426 Change in creditor / debtors -£31,106 £14,123 £5,957 £292 £301 £310 £997 £820 £1,200 £1,500 Increase / decrease in cash £692,468 -£663,350 £17,200 £3,572 -£4,078 -£20,592 -£32,325 £91,490 £14,683 £83,885 Cash c/fwd £712,498 £49,148 £66,348 £69,920 £65,843 £45,250 £12,925 £104,415 £119,098 £202,983 BALANCE SHEET Tangible assets £255,226 £917,120 £887,798 £858,476 £829,154 £799,832 £653,221 £360,000 £180,000 £0 TOTAL FIXED ASSETS £255,226 £917,120 £887,798 £858,476 £829,154 £799,832 £653,221 £360,000 £180,000 £0 Cash balances £712,498 £49,148 £66,348 £69,920 £65,843 £45,250 £12,925 £104,415 £119,098 £202,983 Other current assets / liabilities £31,106 £16,983 £11,026 £10,734 £10,433 £10,123 £9,126 £8,306 £7,106 £5,606 TOTAL ASSETS £998,830 £983,251 £965,173 £939,131 £905,430 £855,205 £675,272 £472,721 £306,204 £208,589 Represented by: Operating reserve £6,000 £12,000 £18,000 £24,000 £30,000 £60,000 General fund £2,789 -£18,790 -£22,948 -£25,110 -£24,971 -£31,396 -£32,329 £183,690 £186,204 £208,589 Share capital £996,041 £996,041 £976,121 £946,241 £906,401 £856,601 £647,601 £289,031 £120,000 £0 TOTAL FUNDS £998,830 £983,251 £965,173 £939,131 £905,430 £855,205 £675,272 £472,721 £306,204 £208,589

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 16

Project Finance, by month Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Month 1 2 3 4 5 6 7 8 9

Construction Costs £5,490 £0 £0 £0 £8,185 £1,667 £11,743 £23,000 £38,301 Archimedes Screw £0 £0 £0 £0 £0 £0 £0 £0 £23,000 Civils contract £0 £0 £0 £0 £0 £0 £0 £0 £0 Fish pass, access, grid connect £0 £0 £0 £0 £0 £0 £0 £0 £0 Contingency costs £0 £0 £0 £0 £0 £0 £0 £0 £0 Project management £0 £0 £0 £0 £0 £0 £0 £23,000 £0

Development Fees £0 £0 £0 £0 £0 £0 £0 £0 £1,907 Op & maintenance, insurance £0 £0 £0 £630 £0 £0 £0 £200 £900 Share Offer Doc & Marketing £0 £0 £3,000 £5,450 £5,000 £0 £1,400 £0 £0 Share capital Finance cost £0 £0 £2,700 £800 £600 £2,800 £800 £0 £1,080 Administration & contingency £0 £0 £0 £0 £0 £500 £810 £0 £0 Subtotal £5,490 £0 £5,700 £6,880 £13,785 £4,967 £14,753 £23,200 £42,188 VAT £1,098 £0 £1,140 £1,376 £2,757 £993 £2,951 £4,640 £8,438 VAT Refund £0 £0 £0 £0 £0 £0 £0 £0 -£10,315 Equity subscribed -£400,000 -£300,000 -£50,000 -£270,000 Subtotal: cash spent £6,588 £0 £6,840 -£391,744 -£283,458 -£44,040 £17,704 £27,840 -£229,689 Cumulative Balance £6,588 £6,588 £13,428 -£378,316 -£661,774 -£705,814 -£688,110 -£660,270 -£889,959 Total Equity Subscribed -£16,041 -£16,041 -£16,041 -£416,041 -£716,041 -£766,041 -£766,041 -£766,041 -£1,036,041 Income received £0 £0 £0 £0 £0 £0 £0 £0 £0 Community benefit paid £0 £0 £0 £0 £0 £0 £0 £0 £0 Bank balance b/fwd £20,030 £13,442 £13,442 £1,236 £377,418 £664,662 £791,554 £790,960 £787,330 Bank balance c/fwd £13,442 £13,442 £1,236 £377,418 £664,662 £791,554 £790,960 £787,330 £782,224

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 17

Project Finance, by month Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

Month 10 11 12 13 14 15 16 17 18 Construction Costs £42,670 £52,130 £92,430 £220,640 £178,030 £220,070 £18,230 £33,555 £33,555 Archimedes Screw £41,240 £0 £0 £67,110 £0 £44,740 £0 £33,555 £33,555

Civils contract £0 £50,700 £0 £152,100 £152,100 £152,100 £0 £0 £0 Fish pass, access, grid connect £0 £0 £20,000 £0 £0 £18,300 £15,000 £0 £0

Contingency costs £0 £0 £61,000 £0 £24,500 £3,500 £1,800 £0 £0 Project management £1,430 £1,430 £11,430 £1,430 £1,430 £1,430 £1,430 £0 £0

Development Fees £1,030 £4,288 £4,288 £4,288 £4,288 £4,288 £0 £0 £0

Operation & maintenance, insurance £200 £600 £200 £558 £558 £558 £558 £558 £558

Share Offer Doc & Marketing £0 £0 £0 £0 £0 £0 £0 £0 £0 Share capital Finance cost £0 £600 £0 £0 £0 £0 £0 £0 £0

Administration & contingency £495 £495 £495 £495 £495 £495 £495 £495 £495 Subtotal £44,395 £58,113 £97,413 £225,981 £183,371 £225,411 £19,283 £34,608 £34,608

VAT £8,879 £11,623 £19,483 £45,196 £36,674 £45,082 £3,857 £6,922 £6,922

VAT Refund £0 £0 -£20,180 -£11,623 -£19,483 -£45,196 -£36,674 -£45,082 -£3,857 Equity subscribed -£150,000

Subtotal: cash spent £53,274 -£80,264 £96,716 £259,554 £200,562 £225,297 -£13,534 -£3,552 £37,673 Cumulative Balance -£708,920 -£789,184 -£692,468 -£432,914 -£232,352 -£7,055 -£20,589 -£24,141 £13,532

Total Equity Subscribed -£830,000 -£980,000 -£980,000 -£980,000 -£980,000 -£980,000 -£980,000 -£980,000 -£980,000

Income received £0 £0 £0 £0 £0 £0 £0 £0 £0

Community benefit paid £0 £0 £0 £0 £0 £0 £0 £0 £0

Bank balance b/fwd £782,224 £728,950 £809,214 £712,498 £452,944 £252,382 £27,085 £40,619 £44,171 Bank balance c/fwd £728,950 £809,214 £712,498 £452,944 £252,382 £27,085 £40,619 £44,171 £6,498

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 18

Project Finance, by month Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Year 0 Total

Year 1 Total

Month 19 20 21 22 23 24 Construction Costs £0 £0 £0 £0 £0 £0 £192,160 £704,080 Archimedes Screw £0 £0 £0 £0 £0 £0 £44,740 £178,960

Civils contract £0 £0 £0 £0 £0 £0 £50,700 £456,300 Fish pass, access, grid connect £0 £0 £0 £0 £0 £0 £20,000 £33,300

Contingency costs £0 £0 £0 £0 £0 £0 £61,000 £29,800 Project management £0 £0 £0 £0 £0 £0 £15,720 £5,720

Development Fees £0 £0 £0 £0 £0 £0 £37,236 £12,864

Op & maintenance, insurance £558 £558 £558 £2,232 £558 £559 £1,200 £8,371 Share Offer Doc & Marketing £0 £0 £0 £0 £0 £0 £15,200 £0

Share capital Finance cost £0 £0 £0 £0 £0 £0 £7,660 £0 Administration & contingency £495 £495 £495 £495 £495 £625 £2,970 £6,070

Subtotal £1,053 £1,053 £1,053 £2,727 £1,053 £1,184 £256,426 £731,385

VAT £211 £211 £211 £545 £211 £237 £51,286 £146,279 VAT Refund -£6,922 -£6,922 -£211 -£211 -£211 -£545 -£20,180 -£176,937

Equity subscribed -£980,000 £0 Subtotal -£5,658 -£5,658 £1,053 £3,061 £1,053 £876

Cumulative Balance £7,874 £2,216 £3,269 £6,330 £7,383 £8,259 -£692,468 £8,259

Total Equity Subscribed -£980,000 -£980,000 -£980,000 -£980,000 -£980,000 -£980,000 -£980,000 -£980,000

Income received £0 £0 £10,085

£0 £0 -£15,128 £0 -£25,213 Community benefit spent £0 £0 £0 £2,000 £0 £0 £0 £100

Bank balance b/fwd £6,498 £12,156 £17,814 £26,846 £23,085 £22,032 Bank balance c/fwd £12,156 £17,814 £26,846 £23,085 £22,032 £36,284 £712,498 £36,284

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 19

Our organisation Reading Hydro is run by volunteer Directors, who bring a range of experience, skills and enthusiasm to the society. Members are encouraged to stand for election to the Board, and also to support the board with specific expertise as advisory members. Communication between meetings uses Slack channels.

SOPHIE PAUL CHAIR

Sophie has lived in Reading for 23 years. She has a background in hydrogeology, IT development, governance and strategy, in addition to many years of involvement in a wide range community projects in the UK and abroad.

“I delight in the smell of the water going over Caversham Weir, along with the sight and sound of power in that water.”

ANNE WHELDON SECRETARY

Anne started life as a physicist, quickly steering this towards the environment with a PhD in environmental physics. She spent a large part of her career in sustainable energy and international development, also at the University of Reading, running the MSc in Renewable Energy and the Environment. More recently, she worked for 12 years for the sustainable energy charity Ashden as technical director and adviser.

“We really need to have more hydro to give a balanced sustainable energy supply mix, and where better to do it than in Reading.”

TONY COWLING TECHNOLOGY & FOUNDER

Tony graduated from Reading University in the seventies with a PhD in chemistry. Inspired by sustainability, he’s been involved in a variety of initiatives in Reading and beyond, including, Reading Energy Pioneers and the DraughtBusters project initiative of ‘Transition Town Reading’

“Passions of mine are both renewable energy and driving forward sustainability through Education. Originating from The Reading Sustainability Centre the Hydro project combines the two!”

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 20

ANDY TUNSTALL BUSINESS STRATEGY

Andy has a background in oil, water and energy in posts ranging from finance, IT, sales, marketing and strategy. He has recently completed the MSc in Renewable Energy at University of Reading and is also a director of The Green Group UK Ltd which intends to market renewable heat and power products to homes and businesses. He joins Reading Hydro CBS to help advise on business strategy, partnership development and the all-important share raise to make the idea into reality.

“It’s great to be involved with something that will have so much benefit to the community of Reading on so many levels. It fits perfectly with Reading’s objective of reducing energy use and increasing renewable generation. Hopefully this will be the first of many schemes that Reading Hydro can help facilitate.”

David Whipple TECHNOLOGY

David’s whole career has been working with water. Now retired, he worked for a big Reading-based engineering consultancy as a hydraulic specialist on many large dams and hydro-electric projects including Kariba Dam in Zambia, Victoria Dam in Sri Lanka, Glendoe, Sloy and Foyers in Scotland, plus numerous smaller dams, weirs, river training works, flood defences and fish passes both overseas and at home.

“I keep my hydro skills refreshed by helping my grandchildren dam streams on the beach on holiday.”

Michael Beaven FUNDRAISING

Michael has a background in finance and fundraising in the voluntary sector, and is a licenced Community Shares practitioner. He works for Our Community Enterprise, an employee-owned company based in Maidenhead. He is also a Director of MaidEnergy, a renewable energy co-op that has installed 100kW of solar panels on community buildings, financed by a Community Share offer to the public.

“I’ve seen new turbines start generating renewable electricity elsewhere on the Thames, and am inspired by the work that has been done to make this happen in Reading too.”

The development of a hydropower project is heavily regulated, with permissions required from the local planning authority (Reading Borough Council), the network operator (SSEN) and the Environment Agency. This has been achieved by determined volunteer activity, combined with support from professional

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 21

advisers as required. In autumn 2018 we tendered for professional support, and selected Renewables First. They have provided outline and detailed designs and managed the tenders for the construction of a relevant hydropower system, together with professional support to secure the permissions required.

In October 2019, the Reading Hydro directors contracted with Our Community Enterprise CIC to develop the Business Plan and Share Offer document, ready for independent assessment for the Standard Mark in November 2019. As Michael Beaven is a Director of both organisations, Our Community Enterprise CIC offered to do the work at a discount, to ensure Reading Hydro got best value. Michael took no part in the decision by Reading Hydro to award the contract.

Reading Hydro grew out of the work of The Reading Sustainability Centre (TRSC), a CIC limited by guarantee (09379870), and Tony Cowling is a volunteer Director of both organisations. TRSC initially applied for planning permission and Environment Agency licences, and the relevant permissions have been granted to them. Agreement has been reached for Reading Hydro to develop the hydropower site, with an in-kind donation from TRSC of the permissions granted, and for both organisations to work together co-operatively.

Other than disclosed above, no directors received remuneration from Reading Hydro CBS Ltd. Our role as Directors is voluntary and has no payment, other than expenses.

Member and community engagement are important and key aspects of the Society’s governance and we welcome support, ideas, comments and assistance. A large number of members have helped the project in various ways over time.

We encourage membership of Reading Hydro. Anyone can contact us by emailing reading.hydro.cbs@gmail.com, through the Reading Hydro Project Facebook group, through @rdghydro on Twitter or Instagram, and by signing up for our newsletter via our website: hydro.readinguk.org. Anyone can get involved in person by attending our Annual General Meetings (only members may vote) and (when Covid-19 restrictions permit) frequent open action evenings and events, which are announced through our main communication channels above.

The volunteer Directors of the society are drawn from, and elected by, the membership, and welcome individuals who can strengthen the governance of the society. This could be due to expertise or knowledge, or through links to communities in the local area, and support and mentoring is offered to potential Directors to encourage wider participation.

Our Society’s community engagement involves an increasing variety of events and publicity, including a strong online presence and attractive e-newsletter, press releases, action evenings, public social gatherings, partnership with other community groups, and educational links. Some of these are currently on hold because of Covid-19 restrictions.

Operation of the hydropower site in the long term will be carried out by a mixture of volunteers and professionals with relevant qualifications, skills and experience. Many tasks (such as clearing trash screens, routine maintenance) are suitable for community involvement.

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 22

Risks General Renewable Energy Risks

• Government policy towards renewable energy may change. A significant source of income for Reading Hydro is the Feed-in Tariff. Reading Hydro’s profitability depends on the FIT continuing to be paid in accordance with current legal regulations and future governments honouring this obligation.

• Long-term changes to weather patterns could result in lower levels of production. However, there is no evidence that Reading Hydro is aware of that this will affect energy production at our site disproportionately more than anywhere else. Atypical short-term weather conditions could affect expected levels of generation, although overall patterns outside anticipated parameters are unlikely.

• It is very difficult to predict either the generation of, or the demand for, electricity in 20 years’ time. Some National Grid scenarios project that rapid decarbonisation could lead to an oversupply of electricity in the 2040s, with insufficient storage capacity to utilise this. Equally, rapid adoption of electric vehicles and heat pumps, for example, could increase demand for electricity as fast as generation increases. New developments in electricity storage and electric cars may also significantly increase distributed storage capacity on the Grid.

• Ofgem is reviewing how the infrastructure costs of the grid are financed, and the Targeted Charging Review may lead to increased cost for distributed generation.

• Operational costs may rise faster than anticipated during the life of the project. The Society will enter into contracts for operation, maintenance and administration to reduce this risk as far as practicable.

Risks specific to the Reading Hydro project

Reading Hydro maintains a detailed risk register which is reviewed at each board meeting. The main risks identified, and their mitigation, are:

• Warranties will be in place in the event of breakdown of the equipment. However, equipment suppliers, contractors, purchasers of electricity or other contracting parties with the Society could fail to meet their obligations.

• Accidental and malicious damage are also covered under insurance and public liability insurance is provided. However, there may be equipment fitting charges associated with replacing failed equipment which may not be covered by insurances and warranties, and this would increase maintenance cost and this impact on the organisation’s profits. Reading Hydro may self-insure, and accept the risk of loss of income and increased costs, in return for long-term savings on insurance costs which can be retained within the society.

The projections are based on the predicted energy yield of the project. If this were to be lower on average over the project period, then members’ returns would reduce for the years in question.

The project only uses a small part of the flow of the Thames at Caversham, which allows it to operate with a high (79%) load factor, based on calculations from Renewables First, using Environment Agency data for the site. Experience suggests this may vary by 8-9% (i.e. from 79% to 72%). The average load factor in other local schemes is lower than we expect to achieve at Caversham, so we have tested the financial model with a 70% load factor. This would

Reading Hydro CBS, updated Business Plan, August 2020

P a g e | 23

reduce the overall funds available to investors and to community benefit by approximately £158,000 over the life of the project, but the financial model is still viable.

Directional drilling to enable the private wire may not be successful, requiring alternative arrangements that may involve a wayleave with the Environment Agency to use existing infrastructure.

The site includes some difficult ground conditions (flints within chalk, 100 year old embankment), which may slow progress, require additional strengthening or repeated operations. The risks associated with this have been included in the contingency.

Problems may arise with operating the crane to transfer materials to the site – e.g. unstable ground or a load dropped. Close liaison with the crane operator and review of the temporary works design will mitigate this.

Direct sales to an individual client may not achieve the price or quantity modelled, or may be ended before the expected period, because of closure of the business or prolonged interruption to its operation, e.g. as a result of fire or Covid-19 restrictions. We are confident that an agreement with Thames Lido at the price and quantity expected can be reached, and that the business is likely to be operational in the medium-term. Legal agreements will ensure that there are pass-through arrangements in place to allow electricity to be sold to other clients if Thames Lido could not use our power.

The project is reliant upon commissioning before the expiry of the validity period for FITs, which is September 2021 for a community organisation, although the government is currently considering extending this because many hydro projects have experienced delays due to the impact of Covid-19. Delays caused by technical problems (e.g. the embankment found to be unstable and causing flooding or needing reinforcement) impacts of weather (e.g. flooding delaying the laying of cable and the installation of the turbines), or failure to secure a lease for using the land for the fish pass, might cause us to miss the deadline. We are mitigating this risk by specifying early deadlines for completion of key parts of the project, keeping close check where undertaking one activity is contingent on completing another, and liaising closely with Reading Borough Council on the fish pass lease. In the remote event that the FIT deadline is not met, it is unlikely that investors would receive much more than their money back.

Covid-19 may cause delays. The number of people on site may be reduced because of regulations or illness, slowing the rate of work. Should transmission to a construction worker or volunteer occur on site, then the site may be shut down for 14 days. Reading Hydro itself and all contractors involved will undertake specific risk assessments to minimise the risk of Covid-19 transmission.

The cost of the turbines may increase because of fluctuations in the exchange rate between the pound and euro, or through levying of import duty if the UK fails to agree a satisfactory trade deal with the EU. We will mitigate this risk by paying a significant proportion of the turbine cost in advance.

The site is on unregistered land, but requires use of land owned by Reading Borough Council, and there is a possibility that work could be delayed if permission for use are not in place. The site is included in the Local Plan, and officers and Councillors have been supportive, so we are confident that any delays will be minimal.

If the share offer does not raise the finance required, work could be halted until alternative financing arrangements are in place. These arrangements may raise the cost of capital, and lengthen the period during which returns to investors will be below our long-term target rate of 4%.