Cwmarian BusinessPlan Sept2009 v2

Business Plan
For
Cymdeithas Cwm Arian Association
To establish the Silver Valley area of North Pembrokeshire as
an area of best practice for energy efficiency by providing a
clean, renewable energy source.
Presented by
Michael Parcell
Business plan date

19th September 2009
Contact details
Michael Parcell
Llwynhelyg,
Hermon,
Glogue,
Pembs.
SA36 0DT
Tel: 01239 831458

Email: mrjparcell@aol.com
Contacts
Client
Michael Parcell
Cymdeithas Cwm Arian Association
Llwynhelyg,
Hermon,
Glogue,
Pembs.
SA36 0DT
Tel: 01239 831458

Email: mrjparcell@aol.com
Accountant
Currently Cris Tomos is carrying out all accounting requirements of the renewable energy working group. CCAA will
appoint accountants when the necessity for this arises.
Bank
The working group will set up a bank account specifically for the renewable energy project. This will be with the
Charity Bank who will also help fund the project via a loan.
Business Consultant
West Wales Consulting Ltd
PO Box 99
Haverfordwest
SA61 9AR
Tel: 01550 777040.

Email: westwalesconsult@aol.com
Renewable Energy Consultant (Feasibility Study)

Dulas Ltd
Unit 1
Dyfi Eco Park
Machynlleth
Powys
SY20 8AX
Tel. 01654 705000
Business Plan for Cymdeithas Cwm Arian Association

Page 1
Table of Contents
1. Executive Summary 4
2. Business Background 8
2.1 Projected Business Activity 8
2.2 Legal Business Description 9
2.3 VAT Status 9
2.4 Owners Experience 10
2.5 Support Team 10
2.6 External Support 10
3. Aims and Objectives 11
3.1 Mission Statement 11
3.2 Business Objectives 11
3.3 Critical Success Factors 12
3.4 Key Performance Indicators 12
4. Delivery of Products and Services 13
4.1 Products and/or Services 13
4.2 Customer Service 14
4.3 Terms of Business 14
4.4 Technology, Processes and Equipment 14
4.5 Suppliers and Terms of Trade 15
4.6 Premises 15
4.7 Distribution 18
4.8 Legislation 18
4.9 Insurances 18
4.10 Future Staff Requirements 19
4.11 Employment Policy 19
4.12 Training Policy and Plan 19
4.13 Equal Opportunities Policy 19
4.14 Health and Safety Policy 19
4.15 Welsh Language Policy 20
4.16 Environmental Policy 20
4.17 IT and eBusiness Policy 20
4.18 Confidentiality Policy 20
5. The Market 22
5.1 Market Overview 22
5.2 Customer Profile 25
5.3 Competition 25
5.5 Competitive Advantage 26
5.6 External Influences 26
6. Marketing 28
6.1 Message 28
6.2 Positioning 28
6.3 Branding 28
6.4 Pricing Objectives 28
6.5 Price Determination 29
6.6 Price Adjustment Strategies 29
6.7 Marketing Methods 29
7. Sales 31
7.1 Sales Channels 31
7.2 Sales Personnel 31
7.3 Managing Enquiries 31
7.4 Invoicing and/or Payment Collection 31
8. Finance 32
8.1 Financial Accounts of Existing or Acquired Business 32
8.2 Financial Projections 32
8.3 Sensitivity Analysis 32
8.4 Existing Assets 32
8.5 Funding Requirement 32

Page 2
8.6 Sources of Funding 33
8.7 Assumptions 34
8.8 Case for Grant 37
8.9 Benefits of Grant 37
Appendices 37

Page 3
1. Executive Summary
Purpose of Plan
The purpose of this plan is to present a written document indicating how
Cymdeithas Cwm Arian Association (CCAA) proposes to trade. This plan will
be used to (1) ensure the renewable energy project is successfully developed
and (2) thereafter, that its performance is monitored according to the plan.
The plan may also be used to engage the support of appropriate third parties
(banks, accountants, grant providers).
Projected Business Activity

The Ynni Cwm Arian Energy working group was formed to enable background
research to be carried out into utilising Renewable Energy resources and to
investigate Lowering Carbon Footprint by 50% and Energy Efficiency for local
households in the Silver Valley area, and the Neighouring 4 wards of Clydau,
Crymych, Trelech and Llanboidy in West Carmarthenshire and North
Pembrokeshire.
A study carried out by Dulas Ltd (with funding from PLANED and a small
Sustainable Development Fund grant) identified a site that looked promising
for the siting of two wind turbines on the hills behind Llanfyrnach. These wind
turbines would provide income from selling the generated electricity to the
National Grid; this would generate money that can be put back into the
community for the benefit of its residents.
On satisfactory completion of wind speed tests and gaining planning

permission work will begin to build 1.2 million Megawatt turbines. It is
estimated that from selling electricity generated to the National Grid, Cwm
Arian will bring in an income of over 300,000 pa. Once costs are covered the
surplus would be used for local community development.
The purchase and installation costs of two turbines is circa 1,100,000
Committee Experience
The key members of the Community Association who are going to take
responsibility for this project are as follows:
Mike Parcell Design Engineer

Cris Tomos Chairman of community
Bill Davies Vice Chairman
Aidan Langdon Secretary
Products and/or Services

The wind turbines will be formatted as two 1200 kW turbines to give a total of
2400 kW. This will produce an estimated Annual output of 5,256,000 kWh
based on the plant working at 25% of capacity.
These wind turbines would provide income from selling the generated
electricity to the National Grid. Once costs are covered the surplus would be

Page 4
used for local community development and in the education of the local
population in further energy saving techniques.
Market
The Renewable Obligation (RO) is the mechanism by which the Government
is intending to achieve its target of 10% Renewable Electricity (RE) supply by
2010. It is a requirement on all licensed electricity suppliers in England and
Wales to supply a proportion of their electricity from RE generation. The
obligation on each supplier will rise to 10.4% by the year ending 31st March
2010.
The RO will run until 2026 providing a guaranteed market for renewable
energy. The expected market for eligible renewables is expected to expand
three fold from the present level of 10TWh to 25TWh in 2010. Government
estimates that by 2010 the Renewables Obligation and Climate Change Levy
will be worth 1bn a year to the renewables sector.
The Welsh Assembly Government has committed to achieving 800 megawatts

(MW) onshore wind by 2010. This target was published in TAN8, their
national planning policy statement on renewable energy.
Financial Projections
As a result of our findings we are very confident that a market exists for
provision of renewable energy for sale to the National Grid and for the
services that CCAA offer to the local community. As such, in the next five
years we are confidently forecasting income and profits of:
Year Projected Turnover Profit Before Drawings/Tax

2008-2009 0 -83
2009-2010 9,616 -15,184
2010-2011 325,039 198,844
2011-2012 336,939 208,231
2012-2013 349,191 221,834
Funding Requirement
The success of CCAAs renewable energy initiative is dependent on an
investment of 1,210,000 to cover essential start up and ongoing
maintenance costs as detailed below:
Development Costs
Land Cost 0
Wind Testing Cost 0
Planning Cost 40,000
Plant & Equipment Cost 600,000

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Building Cost 386,600
Financial Service Cost 18,000
Legal Cost 4,500
Insurance Cost 9,000
Project Management 25,000
Other Project Start Up Costs 66,000
1,149,100
Cash Flow Requirements 60,900

Total Funding Requirement 1,210,000
This investment will help ensure the successful launch and long-term
prosperity of the wind turbine project.
In addition, a restoration fund will be set up in order to establish an account

that can be used to either restore the site at the end of the life of the project
(15 20 years) or be used to re-instate a new turbine on the site. This will
commence after five years of turbine revenue generation in order that ongoing
costs can be reduced by repayment of much of the loans that are financing
the project and a fund for the support of local initiatives and education can
commence immediately revenue is generated.
Sources of Funding
CCAA hopes to raise the finance as detailed below:
Source of Funding Amount

Unity Bank 300,000
Low Carbon Communities Fund 500,000
Community Share Offer (Credit Union Support) 300,000
Other Funding* 110,000
Total 1,210,000
* Other Funding - is required in order to finance the Planning process

(40,000) and the repayments of the Finance Wales and
Charity Bank Loans prior to revenue generation
(70,000).
This additional funding will be via a combination of

sponsorship, grant funding and other loan schemes which
are to be identified.
Case for Grant

Due its environmental and community development nature, the CCAA wind
turbine project will be eligible for some grant. The scheme will generate a
significant new income stream into the local community and create both direct
and indirect local employment. An example of an eligible grant scheme is
Environmental Goods and Services for 20,000 of grant funding.

Page 6
Benefits of Grant
By supporting this scheme the Welsh Assembly Government (WAG) would
demonstrate support of a community based environmental project. This
project will also help WAG to achieve its commitments to their Renewable
Obligation and to achieving targets set by TAN8. In addition permanent jobs
and revenue will be generated within a rural community and there are no
displacement issues.

Page 7
2. Business Background
2.1 Projected Business Activity
Achievements To Date
The Ynni Cwm Arian Energy working group was formed to enable background
research to be carried out into utilising Renewable Energy resources and to
investigate Energy Efficiency for local households in the Silver Valley area, of
North Pembrokeshire.
Part of the work being carried out in the Heritage work identified various
historical means of using water power on farms, mills and in Glogue Quarry.
An investigation into the use of local streams for modern micro-hydro systems
was carried out. This investigation identified one existing unused water turbine
and three potential micro-hydro sites. A Preliminary Feasibility Study was
produced which included calculations of potential energy production and
example diagrams of installations.
Using this study as an example of the Energy Groups credentials, an

application was made to the Pembrokeshire Coastal National Park Authority
for a Sustainable Development Fund (SDF) grant to carry out a wider study
into all forms of sustainable energy within the Silver valley area. In December
2005, the group was awarded a small SDF grant to employ a specialist
company to undertake this study. PLANED also came forward with some
match-funding to cover the ancillary costs of the work. After tendering, the
work was awarded to Dulas Ltd of Machynlleth to carry out a feasibility study
into the possibilities of using wind, water and biomass sources to generate
electricity locally and to advise in the implementing of Energy Efficiency in the
home.
Over January, February and March of 2006, Dulas carried out site visits to
investigate wind and water sites, met with the Energy Group and carried desk-
based work using specialised computer packages. The finalised
Renewable Energy Feasibility Study Report was presented to the Silver Valley
association in late March and public meetings were held to broadcast the
findings. In addition, a questionnaire was delivered by hand to all the
households within the area to invite comment upon various aspects of Energy
Efficiency and Renewable Energy.
The study identified a site that looked promising for the siting of two wind
turbines on the hills behind Llanfyrnach. These wind turbines would provide
income from selling the generated electricity to the National Grid; this would
generate money that can be put back into the community for the benefit of its
residents. The micro-hydro and biomass options appeared less viable and
have been put on hold for the time being.

Page 8
A pre-planning application including the findings of the Dulas Report was
submitted in May 2007 and the committee are awaiting a response from the
planning department in response to this.
Projected Activity
The group is now considering the next phase of undertaking a detailed study
of the identified wind-power site to take measurements over a period of 3-6
months. CCAA are investigating the possibility of using readings from another
nearby site to satisfy this for planning application and financial forecasting
purposes and it is assumed that this is possible within this plan. If this is not
acceptable it is estimated that the study will cost circa 3,000 to complete and
the committee are currently identifying possible funding options in order to
proceed with this.
At the same time CCAA will be identifying possibilities for funding the full
project on the assumption that full planning permissions are gained and that
the wind tests confirm the projections made within the Dulas report.
On completion the two 1.2 million Megawatt turbines, it is estimated that from
selling electricity generated to the National Grid, Cwm Arian will bring in an
income of 300,000 pa. Once costs are covered the surplus would be used
for local community development.
The purchase and installation costs of two turbines is circa 1,100,000
2.2 Legal Business Description

The proposed renewable energy project is currently being organised by
Cwmdeithas Cwm Arian Community Association. However due to the
significant investment and revenue potential involved it is proposed that a
separate business entity is set up.
The community Association will take legal, accountancy and business advice
(including from the Wales Co-Operative Network) as to the best trading format
for the new business. It is intended that the business will operate as a social
enterprise.
2.3 VAT Status

Having spoken to an independent energy consultant CCAA have been
advised that they will have to become VAT registered on commencing the
project and that energy sold to the national grid will be charged at 17.5%.
The price per kWh quoted in the financial plan is inclusive of all Renewable
Obligation Ceritificates (ROCs) and Climate Change Levy Exemption
Certificates (LECs).

Page 9
2.4 Committee Experience
The key members of the Community Association who are going to take
responsibility for this project are as follows:
Mike Parcell Design Engineer. Worked as an energy manager with local

authority.
Cris Tomos Chairman of community
Bill Davies Vice Chairman
Aidan Langdon Secretary.
2.5 Support Team

Dulas Ltd Renewable Energy Consultants
Welsh Assembly Government
Pembrokeshire County Council Planning Department and Pembrokeshire
National Parks
Sustainable Development Fund
Members of the Community Association
The local population to Hermon and surrounding areas
Land Owner, on whose property the turbines will be built.
2.6 External Support

Source(s) of Funding: Finance Wales
Unity Bank
Sponsorship
Earned Revenue
Accountant: Cris Tomos
Bank: LloydsTSB Bank
Business Consultant: West Wales Consulting, Haverfordwest.

Page 10
3. Aims and Objectives
3.1 Mission Statement

To establish the Silver Valley area of North Pembrokeshire as an area of best
practice for energy efficiency by providing a clean renewable energy source.
3.2 Business Objectives

Year One Key Objectives
Complete wind testing by January 2009
Obtain full planning approval by June 2010
Secure Funding required.
Year Two Key Objectives

Apply won funding to capital works
Complete All building works and turbine erection by June 2011.
Year Three Key Objectives

Commence electricity generation in July 2011
Generate turnover of over 300,000
Employ a maintenance/monitoring employee in July 2010
Employ a community energy liaison officer in January 2010
Commence reducing Household Carbon Footprint by 50%
Establish a profit level of over 190,000 for investment into local community
schemes.
Year Four Key Objectives

Maintain all staffing in line with the plan
Set 10 year goals for a total annual Carbon Tonnage Reduction of 12,500
tonnes across 2834 house holds (population of 6,827)
schemes.
Year Five Key Objectives

Maintain all staffing in line with the plan
Monitor Carbon usage to and average of 4.4 tonnes per household down
from 8.8 tonnes
schemes.

Page 11
3.3 Critical Success Factors
Gaining Planning Permission in a timely fashion and to budget
Wind Tests support evidence from existing research to erect the turbines
Support of Landowner
Securing full funding to complete work
Maintaining local resident support for the project
Arranging or being able to provide facilities/services that local people want
and are willing to support
Monitoring each household Carbon Tonnage usage
Maintaining the continued support of main stakeholders during the
planning and building process
Maintaining continuity and ongoing commitment of the existing Committee
3.4 Key Performance Indicators

Results from the wind tests as compared with projections made within this
plan.
Price paid by the National Grid in comparison to projected pricing
Actual kWh output level generated once in operation
Revenue generated that can be used to support local initiatives
The number of local initiatives promoted as a result of the project
Reduction of 12,500 Carbon Tonnes per annum from 2834 households.
The number of local residents directly affected by initiatives introduced as
a result of the project

Page 12
4. Delivery of Products and Services
4.1 Products and/or Services
The potential technologies have been assessed by the ReSolutions
team at Dulas and are summarised in the table below as the
potential for implementation in Cwm Arian.
This illustrates that other than general promotion of energy efficiency the Wind
Turbine is the only suitable technology available for a large scale development
in this area. For the full analysis of all the options available please see the
ReSolutions Report.
Wind Turbine
The wind turbines will be formatted as two 1200 kW turbines to give a total of
2400 kW. This will produce an estimated Annual output of 5,256,000 kWh
based on the plant working at 25% of capacity.
These wind turbines would provide income from selling the generated
electricity to the National Grid; this would generate money that can be put
back into the community for the benefit of its residents. Once costs are
covered the surplus would be used for local community development and in
the education of the local population in further energy saving techniques.
Carbon Foot Print Reduction & Energy Efficiency

This community based education will focus on how sustainable energy can
help to tackle many of the problems that confront individuals and communities
in the following areas:
Save money and reduce debts

Reduce waste and improve the environment
Improve housing conditions
Create jobs and training opportunities
Improve health
Contribute to community regeneration
This will be achieved via community initiatives and education that will focus on
the following areas:

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Using energy more efficiently
Behavioural changes
Measures (e.g. loft and cavity wall insulation)
Appliances
Reducing lighting costs
Reducing water usage
Low carbon technologies

Using technologies which produce less or no carbon dioxide when
generating energy
Identification of grants available to community associations and individuals
to help implement strategies
Other Association Activity

As well as the promotion of better energy efficiency to the local community,
CCAA will also carry out work through a number of working groups in support
of the local community in the following areas:
The Environment
Local Heritage
Recycling
Promotion of Tourism
Promotion Business / Local Employment
Development of Community Facilities/Resources
Transport Traffic and Rights of Way.
We have plans to utilise the revenues from the sale of wind energy assits with
household revenue to be spent as follows
40% of revenue - capital cost grants to households for the installation of
insulation/ draught-proofing, solar hot water systems, biomass heating
systems and energy efficiency measures.
20% of revenue - refurbishment of community buildings followed by support
for local affordable housing.
10% - information leaflets/ house to house training about carbon footprinting.
10% - initiatives that support a reduction in travel through the establishment of
car-share schemes and timetabled bus services.
10% - support for local initiatives that assist with community carbon reduction
(such as community composting initiatives, mobile shop/service provision)
10% - administrative fees Cwm Arian
4.2 Customer Service

CCAA understand that they need the support of the local community if they
are to achieve their mission. They encourage two way communications with
local residents and hold regular meetings to show transparency and inclusion.
A questionnaire has also been distributed to every household in the local area
to encourage further feedback.

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4.3 Terms of Business
CCAA will offer standard trade terms with the National Grid for payment of
electricity produced from the win turbines.
4.4 Technology, Processes and Equipment

CCAA, in association with their support network, will make excellent use of
technology and equipment to establish the feasibility of the site for wind power
and the impact this will have on the local environment. This includes the
software and equipment used to produce the Dulas Report as well as future
use of anemometers to establish wind speeds at the site. On construction the
site will offer two 1.2MW wind turbines.
4.5 Suppliers and Terms of Trade

Post development there will be little requirement for formal suppliers. Where
regular transactions are envisaged with a supplier trade account, terms of 30
days credit would be arranged.
4.6 Premises
The map below shows the area in which the turbines are to be situated and
the local area to be served:

Page 15
Initial site identification was undertaken via a desk based study scoping the
area for suitable sites for electricity generation using large scale wind
turbines. Two sites were identified - these being at the cross roads above
Rhos-y-llyn at grid reference 239 320, and along the ridge above
Pantygwyddel at grid reference 230 300, as follows:

Page 16
Preferred site due to good
access thus requiring
minimal roadway investment
An idea of the sizes of such plant can be gained from the illustration
below, as well as an indication of the level of electricity output.
Using Windfarmer software and the GIS information which provides

topographical information it is possible to assess the field of visual
impact on the surrounding area. The map below shows the zones
from where any installed turbines may be seen, based on the
proposed 1.2MW machines, known as a Zone of Visual Impact (ZVI).
Smaller machines will have shorter towers and a smaller blade
diameter and hence will have less of a visual impact than the largest
machines modeled. The ZVI generated is considered by Dulas
experts to be favourable for the site, especially as there is little
impact to the National Park.

Page 17
Grid Connection
It is known that the Dyffryn Brodyn windfarm connects to the grid at a
substation in Llanfrynach. There should be potential to connect to the grid for
the community wind power scheme at this point with the proximity to the
potential site helping to minimise the capital cost of connection. Should the
scheme proceed at the site a full investigation and negotiation with the
network operator will be required.
Ecological Impact Issues

The impact of large turbines on the ecology of the surrounding area is
relatively benign. The main impacts are during construction and installation
when foundations must be dug and concreted; access roads and crane
standings must also be built. The impact of these operations will be assessed,
and mitigated, as with any construction works. On completion of the
construction phase, foundations will be overfilled and made good allowing
uninterrupted use of the land right up to the foot of the turbine tower. Access
roads and crane standings will see a degree of vegetation overgrow reducing
their visibility.

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A full noise assessment, including background noise monitoring, would need
to be carried out to assess whether it is feasible to have turbines of a
particular size located on this site.
4.7 Distribution
The energy produced by the wind turbines will be sold to the National Grid. It
is however the revenue from this sale that will offer the real benefit to the local
community. A more detailed analysis of the local population can be viewed in
section 5.1.
4.8 Legislation
CCAA will have to comply with Planning Permission rules and regulations
including an Environmental Survey.
Once the legal business type has been established the business will have to
run within the appropriate legal framework.
If details of committee members, member or donators are kept then the CCAA
must comply with the Data Protection Act 1998, which covers confidentiality
issues surrounding the retention of personal information.
When CCAA provide employment they must comply with health and safety
and employment law legislation. Key regulations include the:
Health and Safety at Work etc. Act 1974 and the Health and Safety
(Miscellaneous Amendments) Regulations 2002, which set out general
obligations towards staff, clients and members of the public in terms of
health and safety.
Fire Precautions (Workplace) Regulations 1997 and the Regulatory
Reform (Fire Safety) Order 2005.
Other employment considerations include National Minimum Wage
legislation, arranging employer's liability insurance and ensuring equality of
treatment in recruitment.
4.9 Insurances
It is estimated that insurance costs at the development stage will be circa
6,000 and that ongoing annual insurances during the life of the operational
period will be in the region of 6,000. The insurer chosen will specialise in
this type of installation.

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4.10 Future Staff Requirements
On completion of the project, CCAA would like to train a new employee to be
responsible for the running of the project in the form of the ongoing monitoring
and maintenance of the wind turbines.
In addition, CCAA would like to employ a liaison officer whose responsibility

will be to help educate the local community in relation to energy efficiency.
This officer would also help with formal bids and awards of grants for energy
efficiency initiatives within the community.
A budget of 15,000 per annum has been set aside for employment. This will
be 7,500 for the monitor/maintenance engineer and 7,500 for the
community liaison officer.
As well as direct employment CCAA will also generate significant indirect work
such as installation of energy saving devices etc.
4.11 Employment Policy

In all matters relating to future staff employment, CCAA will give utmost
consideration to the preservation of good staff relations, training, development
and employment best practice.
4.12 Training Policy and Plan

CCAA will ensure that training requirements of the committee, volunteers and
staff are monitored on a regular basis and that relevant training/development
is provided where necessary or beneficial.
4.13 Equal Opportunities Policy

All job applicants and staff in post will be treated equally regardless of ethnic
or national origins, race, gender, age, disability, language ability, literacy,
religious belief, sexual orientation or any other improper grounds.
All employees are to be recruited, maintained in employment, trained and

promoted on the basis of ability to fulfil the requirements of the role.
The aim is to allow individuals fair and equal opportunities to develop abilities
and realise potential. Also, to actively promote tolerance and understanding
amongst staff based on an awareness of inherent attitudes, customs and
beliefs of others.

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4.14 Health and Safety Policy
CCAA is committed to ensuring the health, safety and welfare of the public, its
Committee, volunteers and any employees. CCAA will ensure that its
statutory duties are met at all times. Each Committee member and employee
will be given such information, instruction and training as is necessary to
enable the safe performance of activities. It is the duty of the Committee to
ensure that all processes and systems are designed to take account of health
and safety.
4.15 Welsh Language Policy

CCAA is committed to the promotion of the Welsh language. Signage and
promotion will carry both Welsh and English. Also, new employees who are
bilingual would be advantageous but not essential.
4.16 Environmental Policy

This project is intended to become a model for an environmentally friendly
community. It is also intended to be seen as a centre of best practice and
education with regards to environmental and energy reduction issues.
CCAAs environmental and energy policies will include the following:
Undertaking activities that are respectful of the natural environment and

which seek to protect it
Imparting knowledge indicating a caring, environmental stance
Developing customers, suppliers and other stakeholders own responsibility
and knowledge for protection of the environment
Advising customers, suppliers and other stakeholders where possible on
processes or options which help preserve the environment
Choosing the most environmentally friendly route where requirements and
economics allow
Promotion of recycling and/or reusing materials used
Promotion of safe disposal of any waste products which may be harmful to
the environment
Saving energy where possible and educating others of how to do this.
4.17 IT and eBusiness Policy

CCAA is committed to the appropriate use of IT in delivering services and will
seek advice as to best practice within this field. A review of IT usage and
improvements to delivery would take place annually.

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4.18 Confidentiality Policy
CCAA will adhere to the Data Protection Act (1994) in all matters relating to
customer, visitor, stakeholder and employee information that may be held. No
information will be disclosed to third parties without the prior knowledge and
consent of the persons concerned.

Page 22
5. The Market
5.1 Market Overview
Market Background
Renewable energy sources have been known for many years, but it is only
during the past 20 years that modern technology and investment has been
applied to produce viable alternatives to fossil fuel that can produce energy on
a useful scale.
The stimulus to develop renewables is being driven by several factors:
Carbon emissions from fossil fuels are causing global warming and there is
pressure to reduce the amount of carbon dioxide produced in energy
production.
The UK is soon to become a net importer of gas and later of oil, as North
Sea reserves are depleted. By 2020, the country could be dependent on
imported energy for 75% of its primary energy needs.
Rising gas prices.
As a result renewable energy is now formally part of the government energy

policy to reduce carbon emissions and to diversify the UK's energy supply.
Alternative methods have to be found for:
The Renewable Obligation

The Renewable Obligation (RO) is the mechanism by which the Government
is intending to achieve its target of 10% Renewable Electricity (RE) supply by
2010. It is a requirement on all licensed electricity suppliers in England and
Wales to supply a proportion of their electricity from RE generation. The
obligation on each supplier will rise to 10.4% by the year ending 31st March
2010.
The RO will run until 2026 providing a guaranteed market for renewable
energy. The expected market for eligible renewables is expected to expand
three fold from the present level of 10TWh to 25TWh in 2010. Government
estimates that by 2010 the Renewables Obligation and Climate Change Levy
will be worth 1bn a year to the renewables sector.
Industry Growth
In 2005, the UK became one of only eight countries in the world to break the 1
gigawatt installed capacity barrier and the following graphs show that this
period of growth is set to continue.

Page 23
Source: The British Wind Energy Association (BWEA) Annual Report for 2005
Welsh Assembly Commitment

The Welsh Assembly Government's has committed to achieving 800
megawatts (MW) onshore wind by 2010. This target was published in TAN8,
their national planning policy statement on renewable energy.
Energy Efficiency at a Local Level

Via the program of community based initiatives and education, CCAA will aim
to tackle some of the issues relating to domestic energy use as highlighted
below:
Domestic Households are responsible for 25% of CO 2 emissions. This could

be reduced to 18% through better energy efficiency.
The average UK household spends 620 on fuel and power every year and
could save 250 through better efficiency
Households spending more than 10% of their income on fuel are in fuel
poverty
1.2 million UK households are in fuel poverty
Low income pensioners and single parents are at higher risk from fuel
poverty
2 million gas customers are in debt (OFGEM)
30,000 people die of cold-related illnesses every year

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A third of all housing falls below the decent home standard
Non decent housing leads to cold and damp-related illnesses such as
hypothermia and respiratory problems
Local Population Analysis - Census 2001
At the time of the Census in April 2001, the

resident population of LSOA Pembrokeshire
001D (the LSOA in which the project is to be
placed) was 1,124 of whom 49 per cent were
male and 51 per cent were female. This
compared with a resident population in
Pembrokeshire of 114,131 people, of whom
48 per cent were male and 52 per cent were
female.
The average age of the population in LSOA

Pembrokeshire 001D was 37.7 years. This
compared with an average age for England
and Wales of 38.7 years.
Resident population: percentage in each

age band, April 2001:
The populations with settlements in the Crymych Electoral Division is shown

below.
Settlement Population

Page 25
BRYNBERIAN 30 It is important to note that the
BRYNBWA 25 settlements listed opposite are located
within the Crymych Electoral Division
CROSSWELL 30 (total population of 2,340) which
CRYMYCH 610 covers a wider area than the LSOA on
EGLWYSWRW 180 which the previous figures are based.
GLANDWR 55 The population in settlements within
GLOGUE 50 the Electoral division clearly shows
HERMON 185 that nearly half of the population live in
rural locations outside these main
LLANFYRNACH 60 settlements.
PENYGROES 10
POSTGWYN 20
RHYDWENFACH 10
It is estimated that through Analysis of these figures together with local

knowledge and distribution and return of the questionnaires that the total local
population in the three main areas directly affected by this project is roughly:
Focus Population to kick off Low Carbon Reduction.

GLOGUE 120
HERMON 385
LLANFYRNACH 110
Total Local Inhabitants 615
Wider 4 Wards Population and Households (2007 stats)

Population Households
Crymych 1,170 502
Clydau 1,494 640
Trelech 2,075 861
Llanboidy 2,088 831
Total 6,827 2,834
5.2 Customer Profile

The customer for the generated power is clearly identified as the National Grid
who are under pressure to increase energy from renewable sources in Wales
in light of the TAN8 policy statement by the Welsh Assembly Government.
In addition to the sale of energy CCAAs customers can also be identified as

the local residents of the area. Although these residents will not make a
financial transaction they are the ones that will benefit from the direct action
that CCAA will implement in the form of further environmental education as
well as support of local causes that will aim to improve the standard of living
for residents.

Page 26
5.3 Competition
Although there are other sites offering wind generated (and other renewable
forms such as solar, hydro etc) power due to the commitments to the TAN8
policy it is estimated that demand for renewable power will continue to be
greater than available supply for some time into the future.
The lifespan of the CCAA project is 20 years and although the market place
may have changed dramatically within this time (for instance the proposed
wave power development in the Milford Haven estuary) it is still expected that
there will be demand for as much energy that can be produced throughout the
life of the project and certainly for the number of years until CCAA achieve
breakeven.
5.5 Competitive Advantage

CCAA will achieve competitive advantage through a combination of the
following factors:
Strong foundation of committee members who are committed to developing

the project and helping the local community on a voluntary basis.
Support of the land owners on which the wind turbines are to be sited.
Support of the local community
The ability to call upon other community based projects to establish best
practice
5.6 External Influences

The external influences relating to CCAA are shown below:
SOCIOLOGICAL TECHNOLOGICAL
Pembrokeshire made up of 97% micro SMEs, Internet allows quick, interactive and low cost
very few large businesses. communication.
Pembrokeshire is primarily a service WWW and web site presence can aid
economy. business profile and generate business
Population in rural and coastal areas is Renewable energy sources such as wind
increasing, which means higher service sector power are capable of producing useful energy
requirement. at local level. This feature could lead to a
redistribution of energy with less reliance on a
Society is recognising the dangers of transmission network and more locally
continued global warming and many are generated power.
committed to reducing carbon emissions and
supportive of Eco policies. Wind Power is currently the cheapest form of
renewable energy that can be produced on a
Due to the visual nature of Wind Farms there large scale.
will be the inevitable Not In My Back Yard
(NIMBYs) response from areas within the
local community.

Page 27
ENVIRONMENTAL ECONOMICAL
Planning sensitivities, especially in Pembs. Current significant central funds available

National park area. dependent on project/business need for
SMEs/social enterprises.(e.g. Objective
Recycling and minimum wastage policies. 1/matched funding etc)
Use of materials with high insulation/energy Subsidised consultancy fees for SMEs
saving characteristics through central funding schemes.
Environmental grants for commercial Grant funding available from various public
businesses bodies.
Carbon emissions from fossil fuels are Integration of the Euro into the UK over the
causing global warming and there is pressure next 5-10 years.
to reduce the amount of carbon dioxide
produced in energy production. Salary/earnings levels in rural areas are below
the Welsh average.
National minimum wage
The UK is now facing a situation in which it will

soon become a net importer of energy, first for
gas and second for oil. Although renewable
energy will only make a small contribution to
import substitution, its contribution will grow.
POLITICAL LEGAL
Welsh Assembly committed to development of Insurance implications such as vehicle

SMEs in Wales insurances, public/ employers liability and PI.
Stable political climate in Wales encouraging National Minimum wage

significant inward investment.
Data Protection Act
EU legislation regarding new entrants to EU.
This could reduce the amount of fund Employment contracts and employees
available to support Welsh businesses. statutory rights
Ongoing commitment to regeneration in key Planning Regulations

areas in Wales.
There will be continued pressure from the

Government to reduce carbon emissions and
renewable energy will continue to be an
important part of this strategy. Commitment to
the Renewable Obligation (RO) is evidence of
this.

Page 28
Page 29
6. Marketing
6.1 Message
To establish the Silver Valley area of North Pembrokeshire as an area of best

practice with regards to energy efficiency and by provision of a clean
renewable energy source.
6.2 Positioning
CCAA will position themselves as a provider of a renewable energy source for
sale to the National Grid.
CCAA will position themselves within the community as a source of

information and education in relation to energy efficiency and in the support of
local good causes.
6.3 Branding
The branding for CCAA as displayed on the Associations web site is
illustrated below:
This branding is simple yet effective at portraying the environment in which

the Association works. This, together with other marketing material and
information published, will help to explain the particular challenges that the
local area faces and strengthen CCAAs message in facing these challenges.
6.4 Pricing Objectives

CCAA will look to maximise the pricing received from the National Grid from
the renewable energy production.
Depending on the activity CCAA aims to provide other local services at a

nominal rate or free of charge.
6.5 Price Determination

Renewable energy price will be determined by the current price offered by the
National Grid. Due to the size of the operation it is expected that there will be
little room to negotiate pricing.

Page 30
Where a nominal price is charged for CCAAs other services/events this will
be to cover costs incurred by the Association and to fund other projects or
support local charities.
6.6 Price Adjustment Strategies

Pricing for local services/events will be determined on a case by case basis
and all pricing will be justified by a clear statement of how these funds are to
be used by the Association.
6.7 Marketing Methods

Direct Liaison with the National Grid
Due to the government targets for renewable energy sources CCAA will not
have to market their services to the National Grid but rather establish a
communication structure to negotiate and liaise with the National Grid. This
contact will be made via telephone, e-mail, letter, fax and face to face
meetings where appropriate.
Marketing of Other Services

The revenue generated from the sale of energy to the National Grid is
designed to make a difference to the local community in the form of education
to reduce in energy usage and costs including awarding a number of grants to
help make the changes required. In addition this revenue will help other
community based schemes and local charities. It is this message that needs
to be portrayed in order to help to establish local support for the scheme.
After the scheme has been implemented and revenue is being received it is
important that all events and initiatives are well publicised so that the largest
proportion of the local community can be reached.
In order to market these messages to the local community the following media
will be utilised:
Questionnaires to establish the type of services wanted by the local

community
Newsletter to maintain regular contact with the community and to
notify of progress and future initiatives
Leaflets for promoting specific events
Web Site - with updates on the scheme progress and to notify of
future initiatives
Local Meetings to act as a forum in which the community can voice their
views
Word of Mouth CCAA should encourage the local community to discuss
the initiatives being proposed

Page 31
Local Signage The Association will place local signs in strategic places
around the local community in order to raise awareness
of events.
Press Releases - CCAA will make regular press releases to the local media
such as the Western Telegraph and Radio Pembrokeshire
to try and gain free exposure.
Meetings/Events - The events organised by CCAA should be used as a
platform in which to promote future events and initiatives.

Page 32
7. Sales
Current research indicates that the following turnover for CCAA is realistically
achievable:
Year Projected Turnover

2008-2009 0
2009-2010 9,616
2010-2011 325,039
2011-2012 336,939
2012-2013 349,191
It is important to note that further wind tests are to be conducted which will
offer further evidence to projected turnover.
7.1 Sales Channels

Any enquiries would be handled by the nominated committee member
responsible for the activity in question.
7.2 Sales Personnel

The chair of the management committee and other committee members will
take responsibility for promoting the services and facilities provided. In
addition other voluntary members of the local community may help to promote
CCAAs work through organised activity or word of mouth.
7.3 Managing Enquiries

Enquiries about CCAA will be dealt with by a member of the management
committee. All enquires would be dealt with within 48 hours. Enquiries would
be dealt with via telephone, email and at organised events.
7.4 Invoicing and/or Payment Collection

For the purposes of this plan it is assumed that payment from the National
Grid will be on a monthly basis in arrears.

Page 33
8. Finance
8.1 Financial Accounts of Existing or Acquired Business
As the Renwable Energy project is being run by a new Working Group there
are no existing Financial Accounts available.
8.2 Financial Projections

As a result of our findings we are very confident that a market exists for
provision of renewable energy for sale to the National Grid and for the
services that CCAA offer to the local community. As such, in the next five
years we are confidently forecasting sales and profits of:
Year Projected Turnover Profit Before Drawings/Tax

2008-2009 0 -83
2009-2010 9,616 -15,184
2010-2011 325,039 198,844
2011-2012 336,939 208,231
2012-2013 349,191 221,834
8.3 Sensitivity Analysis

The breakeven point of the business is shown below:
Year 1 Year 2 Year 3 Year 4 Year 5
Income 0 9,616 325,039 336,939 349,191
Fixed Costs 83 24,800 114,945 113,708 112,357
Variable costs 0 0 11,250 15,000 15,000
Profit -83 -15,184 198,844 208,231 221,834
Breakeven income n/a 24,800 119,066 119,006 117,400
8.4 Existing Assets

CCAA do not currently have any owned assets. The land on which the
turbines will be built will be leased.
8.5 Funding Requirement

The success of CCAAs renewable energy initiative is dependent on an
investment of 1,210,000 to cover essential start up and ongoing
maintenance costs as detailed below:
Development Costs
Land Cost 0
Wind Testing Cost 0
Planning Cost 40,000

Page 34
Plant & Equipment Cost 600,000
Building Cost 386,600
Financial Service Cost 18,000
Legal Cost 4,500
Insurance Cost 9,000
Project Management 25,000
Other Project Start Up Costs 66,000
1,149,100
Cash Flow Requirements 60,900

Total Funding Requirement 1,210,000
This investment will help ensure the successful launch and long-term
prosperity of the wind turbine project.
In addition a restoration fund will be set up to establish an account that can be

used to either restore the site at the end of the life of the project (15 20
years) or be used to re-instate a new turbine on the site. This will commence
after five years of turbine revenue generation so that ongoing costs can be
reduced by repayment of much of the loans that are financing the project and
a fund for the support of local initiatives and education can commence
immediately revenue is generated.
8.6 Sources of Funding

CCAA hopes to raise the finance as detailed below:
Source of Funding Amount

Unity Bank 300,000
Low Carbon Communities Fund 500,000
Community Share Offer (Credit Union Support) 300,000
Other Funding* 110,000
Total 1,210,000
* Other Funding - is required in order to finance the Planning process

(40,000) and the repayments of the Finance Wales and
Charity Bank Loans prior to revenue generation
(70,000).
This additional funding will be via a combination of sponsorship, grant funding
(such as 20,000 from Environmental Goods and Services) and other loan
schemes (such as Pembrokeshire Lottery Interest Free Loan) which are to be
identified. CCAA will also approach the loan providers to establish the
possibility of having a payment holiday at the start of the loan until revenue
generation starts.

Page 35
8.7 Assumptions
The revenue and cost assumption on which the financial plan is based can be
viewed in the following pages.

Page 36
Page 37
It is important to note that no costs have been shown for investment by CCAA into community schemes. The level of investment
possible is shown on the next sheet which summarises the total profit possible throughout the life of the scheme.

Page 38
Page 39
8.8 Case for Grant
Due its environmental and community development nature the CCAA wind
turbine project will be eligible for grant. The scheme will generate a significant
new income stream into the local community and will create both direct and
indirect local employment. An example of an eligible grant scheme is
Environmental Goods and Services for 20,000 of grant funding.
8.9 Benefits of Grant

By supporting this scheme the Welsh Assembly Government (WAG) would
demonstrate support of a community based environmental project. This
project will also help WAG to achieve its commitments to their Renewable
Obligation and to achieving targets set by TAN8. the In addition jobs and
revenue will be generated within a rural community.

Page 40
Appendices
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats

Page 41
SWOT Analysis
Strengths
Dedicated voluntary committee with wide ranging skills
Support of the land owner
CCAA is an existing Association so the infrastructure is already in place to
market this new project to the local community.
Strong Community Spirit
Attractive Rural Setting of the three villages
Weaknesses
Lack of experience amongst committee members in relation to setting up or
running large scale energy projects.
Reliance on external funding
Reliance on planning permission
Reliance upon voluntary help in order to establish the project
Outside the TAN8 areas.
Opportunities
Ongoing Government support of schemes producing renewable energy
Future Energy Initiatives
Grant Funding Support
Threats
Wind Tests show that under 25% utilisation is possible
Unable to obtain planning permissions
Unable to secure external funding
Resistance from the local community to the construction of wind turbines

Page 42

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Business Plan

Business plan date

Tel: 01239 831458

Tel: 01239 831458

Tel: 01550 777040.

Renewable Energy Consultant (Feasibility Study)

Tel. 01654 705000

Business Plan for Cymdeithas Cwm Arian Association

Business Plan for Cymdeithas Cwm Arian Association

Business Plan for Cymdeithas Cwm Arian Association

Projected Business Activity

On satisfactory completion of wind speed tests and gaining planning

The purchase and installation costs of two turbines is circa 1,100,000

Mike Parcell Design Engineer

Products and/or Services

Business Plan for Cymdeithas Cwm Arian Association

The Welsh Assembly Government has committed to achieving 800 megawatts

Year Projected Turnover Profit Before Drawings/Tax

Business Plan for Cymdeithas Cwm Arian Association

Cash Flow Requirements 60,900

In addition, a restoration fund will be set up in order to establish an account

Source of Funding Amount

* Other Funding - is required in order to finance the Planning process

This additional funding will be via a combination of

Case for Grant

Business Plan for Cymdeithas Cwm Arian Association

Business Plan for Cymdeithas Cwm Arian Association

Using this study as an example of the Energy Groups credentials, an

Business Plan for Cymdeithas Cwm Arian Association

The purchase and installation costs of two turbines is circa 1,100,000

2.2 Legal Business Description

2.3 VAT Status

Business Plan for Cymdeithas Cwm Arian Association

Mike Parcell Design Engineer. Worked as an energy manager with local

2.5 Support Team

2.6 External Support

Business Plan for Cymdeithas Cwm Arian Association

3.1 Mission Statement

3.2 Business Objectives

Year Two Key Objectives

Year Three Key Objectives

Year Four Key Objectives

Year Five Key Objectives

Business Plan for Cymdeithas Cwm Arian Association

3.4 Key Performance Indicators

Business Plan for Cymdeithas Cwm Arian Association

Carbon Foot Print Reduction & Energy Efficiency

Save money and reduce debts

Business Plan for Cymdeithas Cwm Arian Association

Low carbon technologies

Other Association Activity

4.2 Customer Service

Business Plan for Cymdeithas Cwm Arian Association

4.4 Technology, Processes and Equipment

4.5 Suppliers and Terms of Trade

Business Plan for Cymdeithas Cwm Arian Association

Business Plan for Cymdeithas Cwm Arian Association

Using Windfarmer software and the GIS information which provides

Business Plan for Cymdeithas Cwm Arian Association

Ecological Impact Issues

Business Plan for Cymdeithas Cwm Arian Association

Business Plan for Cymdeithas Cwm Arian Association

In addition, CCAA would like to employ a liaison officer whose responsibility

4.11 Employment Policy