What risk assessment have you undertaken?

The following is the risk assessment which was undertaken as part of the Business Plan put together to obtain the loan from the North York Moors National Park Authority Sustainable Development Fund.

Likelihood – high

Of high likelihood is an increase in the loan interest rate. Bank interest rates are at an historic low and are widely predicted to increase. The financial forecast includes a sensitivity analysis to consider the effect on the project of interest rate increases.

Likelihood – medium

Of medium likelihood is the succession plan for people to manage the project through its anticipated 25+ year life. Currently the majority of active members are 50+ in age but there has been renewed interest from younger members of the community. It is hoped that the proposed apprenticeships will open up a broader cohort from which future project leadership will come and mentoring will be a part of this. Should this not occur, the Society would approach a generating company to manage day to day operations.

Likelihood – low

Of low likelihood is localised weir failure. However, the extant weir supports local business (boating) and also permits upstream abstraction of water by Yorkshire Water. It is likely that a small failure of the weir would be repaired by the Environment Agency (EA) (as in previous occurrences) or in co-operation with the Society. Catastrophic major failure of the weir (thought unlikely) would severely impact the project but Yorkshire Water would have an urgent need to repair the weir to allow continuing water abstraction to supply Whitby. Changing weather patterns may increase the water flows; these have been modelled in the original design. Reduced water flows would reduce electricity production and a sensitivity analysis has been undertaken on the effect on the financial forecast.

The successful commissioning of the completed turbine is dependent on the manufacturer and installer continuing in business. It is anticipated that stage payments will be made to the contractor, in arrears, for work completed to minimise the financial risk to Esk Energy.

The proposed technology is proven with many working examples across the world The technology has been shown to be ‘fish friendly’ and the simplicity of the design allows for uncomplicated maintenance. Protective measures already designed into the system will prevent (for example) tree damage. Any failure of the electrical grid would be repaired by the distribution network.

The EA’s own employees are on record saying that the turbine will help to improve fish transit up the weir. However, the EA fish monitoring project will continuously check the correlation between fish movements and turbine operation to allow for remedial action. In the extremely unlikely case that the EA were to discover the project had an adverse effect on fish populations and decided to revoke the Abstraction Licence the operation would cease until remediation measures could be implemented.

The principal tariff for the electricity production is the Feed in Tariff. This, when signed, is contractual and set to rise by the RPI. However, it is possible (though unlikely) that the government could revoke or change the law. More likely is that renewable energy sources benefit from better returns than planned as demand for them increases.

The planning process identified local concerns regarding noise, amenity etc. Full noise studies were undertaken and additional capital has been allocated for noise abatement measures. It is hoped that the project will attract interest and therefore enhance amenity in the area.

Vandalism is thought unlikely as the site is on private land with restricted access across the main Middlesbrough – Whitby railway line. Access from the road, the other side of the river, requires traversing the long weir which would be hazardous).

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