Sark asks Crown Estate to lend £11.5m for its power plans
SARK has approached a UK company with strong royal connections to help fund its new community power project.
The island is seeking £11.5m. to realise its ambitions to resolve its issues with the island’s electricity supply.
And having recently met Lord Ponsonby, the Justice minister with responsibility for relationships with the Crown Dependencies, it has approached him directly to ask for help to secure a grant or loan.
The island’s target for assistance is The Crown Estate, the vast portfolio of land and holdings belonging to ‘the monarch’.
In a letter seen by the Guernsey Press, Conseiller John Guille, chairman of the island’s Policy & Finance Committee, has formally asked Lord Ponsonby to investigate assisting the island with a grant or loan at a rate below what would be commercially available, including lower than borrowing from Guernsey’s treasury bond.
Although the documents do not mention King Charles by name, they state that Sark would be grateful for ‘the Palace’s guidance and assistance’.
Sark is currently dependent on a private company for its electricity generation, a system that Chief Pleas has described as ‘obsolete, dangerous, expensive and at high risk of failure’.
Sarkees currently pay more than twice as much for their electricity as users in Guernsey or the UK.
Ambitious plans for a new community-owned system were unveiled in January and include two 30m-high wind turbines and a field of solar panels.
Estimated costs for the projects were then £8.6m. but are believed to have increased by almost £3m., after Sark committed £175,000 – 10% of its reserves – to finalise designs.
It is believed that initial discussions about a loan took place when Lord Ponsonby visited Sark at the beginning of the month.
‘Together, a partnership with The Crown Estate could potentially make Sark’s energy supply more secure and sustainable,’ Mr Guille wrote, ‘and support our shared fight against climate change.’
Guernsey’s Policy & Resources Committee said that there were no constitutional issues with Sark approaching the UK for funding.
‘The Bailiwick of Guernsey is fiscally autonomous from the UK and Sark has fiscal autonomy from Guernsey,’ it said in a statement. ‘Any discussions between Sark and the UK government are a matter for those jurisdictions.’
It went on to say that representatives from P&R regularly met with members of Sark’s Policy & Finance Committee through the Sark Liaison Group and the Bailiwick Council. The Sark Community Power project had been discussed but there had been no formal approach for funding to Guernsey.
In scenarios laid out within funding documents, Chief Pleas said that if it had to raise the capital from a 30-year loan from the States of Guernsey, electricity prices would increase further from its current price of 54p/kWh to 65p. Loans from other sources would appear to be even higher and would push the price closer to 75p.
This was described as unaffordable for Sark’s tourism and hospitality industries, and for local residents.
Chief Pleas was approached for comment but had not replied by the time of publication.
Sark has previously secured UK funding for a major project. It had a post-war loan from the UK government to build its harbour, which was finally repaid in the 1990s.
BOX
The Crown Estate is a vast portfolio of land and property believed, valued at some £16bn, which belongs to the reigning monarch ‘in right of the crown’. It is not the King’s private property. The monarch surrenders the revenue from the estate to the Treasury each year for the benefit of the nation’s finances, in exchange for the sovereign grant – the payment paid annually to the monarch by the government in order to fund official duties. The funding arrangement dates back to 1760, when George III reached an agreement to surrender his income from the estate in return for an annual fixed payment.
The estate owns the seabed and half of the foreshore around large parts of England, Wales and Northern Ireland, generating revenues from oil and gas drilling rights and royalties, as well as wind and wave farm developments. The portfolio also includes property across large parts of central London, including St James’s and Regent Street, as well as farmland, offices and retail parks. It also responsible for managing the Windsor estate, which includes parkland and ancient woodland, and Ascot racecourse.
It states that its focus is on delivering three strategic objectives – climate resilience and energy security, thriving communities, and nature recovery.
