A Somerset council is hailing its investment in renewable energy as “a success story” after its two battery storage sites made more money than expected last year.

South Somerset District Council has purchased more than £141m of commercial investments in recent years, using the rental income from tenants to provide long-term funding for front-line services in the face of falling funding from central government.

Two of the council’s more contentious choices have been the creation of two battery storage energy facilities, which store surplus electricity and sell it back to the National Grid at peak times.

The council has now revealed the two sites are exceeding expectations, generating more than £2.8m in gross income between them in the last financial year.

Of the £141.6m the council has invested in property (such as the Wilko and Marks & Spencer stores in Yeovil), around £43.5m has been spent on creating the two battery storage facilities – one on the outskirts of Taunton (known as Fideoak) and one near Fareham in Hampshire (known as FERL).

The Fideoak site was purchased in 2018 but was not fully operational until 2020 due to legal issues, while phase one of the FERL site began running in February 2022 and phase two will be operational from July 19.

The facilities are run through the “joint venture company” SSDC Opium Power Ltd., with the National Grid paying for energy it draws from the batteries within 45 days of each use.

In the last financial year (April 2021 to March 2022), the Fideoak and FERL installations generated gross income for the council of £2,846,021.74 – with more than £400,00 being earned in February alone.

Bridgwater Mercury: Councillors, officers and site managers at the battery storage facilityCouncillors, officers and site managers at the battery storage facility

Councillor John Clark said: “We have stopped making new investments under government instructions; luckily, we had most of our fund invested before that happened.

“The gross return is currently 6.9 per cent, and the net return certainly on the property elements is on our three per cent target.

“The returns on the battery storage projects is in the form of profit on the purchase and sale of electricity from and to the National Grid against a business plan projection, and I’m pleased to note that this profit flow is greater than the profit flow that was projected in the business plan.

“Overall, it’s a success story.”

While the council’s overall investment portfolio is performing well, one of its investments – redeveloping a former care home in Marlborough into new homes – has underperformed.

The project – which has delivered three homes and 15 flats – has been “considerably delayed” due to the coronavirus pandemic, and is “not expected to deliver any profit” even though the remaining homes are being sold at commercially competitive prices.

Robert Orrett, the council’s commercial property, land and development manager, admitted: “This is probably going the best it has done.

“We’ve completed sales of the three houses and four flats, and we’ve got another six flats in solicitors’ hands, which leaves five remaining to sell.

“It’s moving quite well at the moment, and we’re holding at or close to guide prices – we’re not giving significant discounts.”

Mr Clark added: “We previously recorded a number of problems which actually come down to flood and pestilence, rather Biblically.

“We were saying in previous reports that we were really looking at a break-even situation, and the current sales confirm that.

“Some of the portfolio is higher risk and higher return than others, which is normal in a portfolio. This one hasn’t worked out at a profit, but overall the portfolio has.”