At a time when community involvement and action is making headway in the case against global warming, Allegra Spender is leading the way as a catalyst for change for more renewable community energy.
Working as the business side of the female-run family fashion house, and the mother of two young girls, Allegra is also the chair of Sydney Renewable Power Company, a company providing 520 kilowatts of solar panels on what will be the new International Convention Centre, Sydney (ICCS) at Darling Harbour.
With a BA in Economics from the University of Cambridge, and a background in business strategy, I was curious to find out how Allegra wound up working in Kenya as a volunteer consultant with TechnoServe – a not for profit organisation promoting sustainable business solutions for agriculture development.
“It was really sympathetic actually,” she told The Carousel. “I did development economics as part of my degree and felt there were lots of ways of building businesses. I’ve always looked for long-term sustainable ways. Sustainable in the sense that you don’t need people to keep giving you money. That’s what drove me to it. And it was an adventure, something I’d always wanted to do.”
EM: So you were taking that idea of give a man a fish and he’ll eat for a day, teach him how to fish, he’ll eat for a lifetime.
AS: Exactly right. I guess it’s the same principle with Sydney Renewable Power Company, it’s trying to say, how do you move beyond charity to drive renewables? How do you make this something that is both a benefit economically for people and a contribution to what they believe is good for the planet?
EM: How has your mother Carla Zampatti and Bianca Spender given you their support? Are they also passionate supporters of sustainability and if so, how?
AS: Both Mum and Bianca are believers in sustainability so it has been great to have their support. In particular, Bianca’s partner Sam McGuinness is passionate environmentalist working at Waverley Council, so he and Bianca have really helped us connect with other like-minded people.
EM: How did you get involved in the Sydney Renewable Power Company?
AS: It was through a friend, Andy Cavanagh-Downs, who’s one of the board members and works for Embark. Embark is a non-profit organisation that focuses on building and growing community renewable energy. He and I were talking about his various projects and I said, ‘If there was ever an opportunity to get involved please let me know.’
When the International Convention Centre tender came out, he approached Lend Lease and said why don’t we partner? They then included the energy project as part of their bid. When they were successful, a business was effectively born, so then Andy called me and we built the board together.
EM: Lend Lease are a great partner because they really focus their projects on sustainability and sustainable communities.
AS: We had the end of year drinks with our volunteer network and Lend Lease. They were really passionate individuals who drove the project, which I think you need in any organisation. You need someone who’s really going to stand up in meetings and say ‘Hey, we should do this.’ They were great.
EM: That’s (ICCS) not due for completion until the end of this year (2016).
AS: Yes, the panels have started to go up, so we’re very excited. There are 520kW of panels- about 4 panels to a kilowatt, so it’s a huge project.
EM: In terms of the project, did you purchase the panels?
AS: We needed to integrate Sydney Renewable in the large public private partnership for the redevelopment of the site. We have a contract with Darling Harbour Live, who are responsible for the site, where we pay them to manage the installation of the panels from start to finish. It’s a very complex construction and it’s a very big building, this is a small component. The way to do that was to work with Lend Lease, who are construction partner for the overall project, ensuring an integrated build that meets our specifications.
EM: Tell me more about the model you’ve adopted for the project.
AS: So we’re paying them an upfront cost to install. We have a contract that has various performance hurdles, including a target for how many kilowatts have to be produced in a period of time etc. Their job is to put together a solar array that’s going to deliver that. We’re working really closely with them, but it’s their responsibility effectively to ensure that what they put up is going to deliver what they’ve agreed to in the contract. And then we have a maintenance agreement as part of the contract. We have provisions for reporting, so if something goes wrong we have clauses on how quickly they have to deal with it and things like that. Sydney Renewable receives revenues based on every kilowatt hour of electricity generated from the installation
EM: In terms of the returns, you get returns based on the actual power generated and that goes to your investors?
AS: Yes, exactly right. We will raise money from the community to pay for the upfront investment and then when we are paid for the electricity generated, the income from that will flow back to shareholders once the costs of running the business have been taken out. We’ve agreed an electricity price as part of the contract and the ICCS will purchase all our electricity so there’s no chance we’ll have excess electricity.
EM: You have a 25 year contract relating to the panels and electricity produced. What happens after the 25 years?
AS: We give it back to the government. What happens after that will depend on the company and the shareholders. If the shareholders decide they want to invest in something else, they could. They can do that any time through the life of the project. We expect that will happen, but you don’t know. Who knows where people will be in 25 years time.
EM: So at this stage it’s just a one-project initiative. What other projects have you got planned?
AS: We’ve been looking at other projects. Finding the right site and getting the right agreement is complex and is harder than we expected. At this stage, with the timings, we don’t feel we can get a project to the right level for the share offer, but our business planning works with our existing site only, so it is not critical to add other sites to Sydney Renewable. We have a few options with a project; we can take it to the shareholders and say, do you want to invest in this? Or, we’re in touch with other community groups so we might say, we can’t do this, do you want to? Because we just want to see it done, it’s not about us in particular. We want to see more renewable community energy, so we don’t mind how it’s done.
EM: How does the government Renewable Energy Target (RET) scheme come into play?
AS: One of the income streams we hope to get is from the sale of LGCs (Large-scale Generation Certificates) which are part of the whole process. There’s less uncertainty with the RET agreement now than a year ago, although it’s been pulled back from where it was. That uncertainty has been detrimental to the renewable energy industry as well as the carbon price. The back and forth on energy policy hasn’t been great for people wanting to invest. I guess the hope is that now, from a political point of view, there’s a more stable and consistent approach, which, I think will enable more investment. It’s been a tumultuous time.
EM: Sounds like the whole idea and process has been a big risk?
AS: Yes it has been a risk. Our job has been to minimise risk and that’s why we’ve taken the approach we have, to put as much as we can around contracts and certainty, but you know there’s always risk in business.
EM: What has been your experience of the barriers to building renewable power in Australia?
AS: Lack of certainty around policy so people can make investments has been a barrier. We need to transparency in the marketplace where the full cost to the community of the different sources of renewable and conventional power are taken into account. That includes cost to health from carbon in the atmosphere.
Ultimately we would like to see the decommissioning of some of the dirtiest power sources in Australia and a move to cleaner ones but bearing in mind we are a country of significant and cheap resources, you have to balance things out. That’s what I’d like to see.
EM: It does look like we are winning that war a bit at the moment where things are becoming more difficult for conventional power sources.
AS: Yes, I think you’re right and I’m cautiously optimistic about the policy framework now. It seems more stable and less political and I think that’s really a positive thing. And certainly the international framework is moving in the right direction. There’re a lot of positive things out there so hopefully it keeps up.
EM: In comparison to the rest of the world how does Australia compare in taking up renewable energy?
AS: We’re very strong on household solar, I think we’re one of the highest in the world. We’re behind on community energy projects. In Denmark, UK and parts of the US there’s actually much more progress. We’ve looked overseas and can see it working and people really getting behind it and that’s one of the reasons we feel more can be done here.
EM: So far, what are some of the key lessons you’ve learnt from this process?
AS: There are a few things. First one is working out the site and who’s going to buy the electricity. I think it’s easier if you’re selling it back to someone who wants to buy it rather than selling it back to the grid.
Second one is about the team. We’ve got a really nice multi disciplinary team. Andy, who used to be a banker, has a lot of deal experience and also works for Embark so has a deep understanding of this sector.
We have a lawyer, we have an accountant, someone who’s focused on communication and an engineer. It’s been fun, because you sit down in a meeting and you’re always learning something from someone else and you’re hearing different perspectives, but you also feel people have core areas of responsibility and they’re bringing their expertise to something they’re passionate about. It’s actually been a lovely team environment and it’s also meant we can keep our costs down.
Third, it’s easier to be the provider of finance than it is to be the technical installer of panels. We employ specialists for their expertise. We’ve found this to be an easier model.
Last is to choose your company structure based on what you need. We have a public company structure. We wanted to reach a broad group of shareholders and we wanted to do it in a formal way. But people like ClearSky Solar do smaller projects. Their structure allows them to have a lot less regulation. And not being afraid to ask other people what works and what doesn’t. We’ve learnt lots of things, we’ve shared things like constitution and we’re going to share our governance with other organisations. Because we’re all after the same thing. It’s not a competition.
EM: Moving forward, what would you like to see happen in the renewable energy space?
AS: I think we’d like to see more community energy projects. If we want to warm less than 2 degrees it’s going to take a lot to get there. We need to create the right policy framework to make that possible, to make people want to invest in renewables. Politicians will react to what individuals in the community say they care about so I think that people taking action locally sends the message that this is important to the country and this is important to us and its all pulling in the same direction.
EM: So how can people get involved?
AS: We have been very lucky to have a wide variety of people volunteer with Sydney Renewable. They have made so much possible. People can volunteer if they wish. We expect to be offering shares in Sydney Renewable so people can also invest. And finally, they can just spread the word about what we are doing, and perhaps come up with their own community energy projects as well.
EM: What is the best way to get your message out to the Community? How do you plan to get them all on board wanting more renewable energy? What’s the key?
AS: How do you get people interested? It’s a bit of everything. People in leadership taking positions, people talking about it and also I guess, one of the benefits of community energy is it makes you feel like you can do something and I think it’s one of the nice things, it’s like doing your recycling. It’s something practical. It’s not a theory and so I think that the more people can do practical local things, the more they will feel involvement.
EM: How do you think this project helps that?
AS: We did some markets, Glebe market and Bondi, just to let people know what we were doing. There’s a lot of interest out there. It’s really lovely.
Also, it’s a very public project. You can see the panels when you drive by the site. It’s a very visible location. I believe it’s the biggest CBD installation in Australia, so we hope that it will be a catalyst project.
EM: Me too…
Picture credit: Bec Howell