Repowering Communities case study: Community-owned renewables in the UK

Community-owned renewables are quite rare in the UK, but extremely common – mainly wind farms – in Germany and Denmark.  Over 200,000 people own over €5  billion  worth of shares in 4Gw of wind farms in Germany. About 100,000 people own shares in wind farms in Denmark. 80% of older Danish windfarms began as co-operatives, although more modern ones are more often privately-owned or shared. Copenhagen harbour’s offshore wind farm (20 turbines) has 8,000 investors owning 50%, with a local utility owning the rest. The UK is at least now moving in the right direction, albeit slowly.

Baywind Energy Co-Operatives was set up in 1996 in Cumbria, to invest in local wind farms. However, in the UK, the private companies trying to develop wind farms have been encouraged or required to set up ‘community funds’ or ‘community benefits’ instead of going for community ownership. This means that the developer gives money each year to a community organisation. The company does not control what the money is then spent on, so in that sense the money is under community control. Most developers do not say how much money they will give before they receive planing permission, for fear that they will be accused of bribing the system. (They are accused of such bribery despite only talking about amounts of money after they receive planning consent.)

Baywind says that it was formed “on the lines of co-operative models successfully pioneered in Scandinavia.” It promotes both renewables and energy efficiency, with a focus on the community around renewable facilities, not just private investors. The original board of directors included seven members from Ulverston and Barrow, towns in Cumbria. The first share offer in 1996/1997 raised £1.2 million to buy two turbines at the Harlock Hill wind farm. In 1998/1999, the second share offer raised a further 670,000 to buy one turbine at the Haverigg wind farm:

“A co-operative society operates much like a traditional limited company except that the voting rights are distributed equally amongst the members, regardless of the number of shares held. Baywind has a minimum share holding of 300 and a maximum (by law) of 20,000. Hence a stake in the co-op is within easy reach of almost everyone but no single individual or organisation can have a controlling interest. The co-op currently has over 1,300 shareholders throughout the UK and abroad. The Board is elected by the whole membership at the AGM and is supported by a full time paid administrator, who is also a Director.”

(See Baywind Energy Co-operative Ltd.)

To encourage more community owned wind farms, Baywind formed a development company, Energy4All, in 2002:

“Energy4All is based in Baywind’s office in Barrow in Furness with development staff working throughout the UK, utilising key partnerships. Energy4All is owned by Baywind, Boyndie, Westmill, Fenland Green, Skye, Kilbraur and Great Glen co-ops, and as additional co-ops are established they too will share in the ownership of Energy4All.”

(See Energy4All.)

Some environmental NGOS argue that the UK’s regulatory regime to support renewables – the Renewables Obligation – is too complicated for the public and communities to navigate, so should be replaced by a Feed-in Tariff. The UK now has a Feed-in Tariff for schemes up to 5Mw, so this argument can be tested: will this lead to a great expansion of community-owned renewables in the UK?  In any case, before the Feed-in Tariff was introduced community ownership was already expanding quite fast in Scotland, under the Renewables Obligation, because the Scottish government was promoting it effectively. 

Most of the progress on renewables in Scotland so far (which is not enormous) is not community-owned. However, the previous (Labour) Scottish government and the current SNP one recognise the importance of community support. The last government operated the Scottish Community & Household Renewable Initiative, offering grants of up to £100,000 for renewable electricity and heat projects. (Heat is particularly important in Scotland: it is at high latitude, has many inefficient buildings and a major problem with fuel poverty, and much of the country is off the gas grid.)

The current government is operating the Community and Renewable Energy Scotland (CARES) scheme. This was set up in April 2009, with a budget of £13.5m, offering a maximum grant of £150,000 for capital and £10,000 for feasibility studies and installation costs. Only installations up to 1Mw can apply for a CARES grant, though this cap does not apply to district heating projects. Hydro, wind, geothermal, solar, heat pumps (ground, air and water source) and automated wood fuel heating systems are all covered. CARES is administered by the charity Community Energy Scotland. In August 2010, CARES closed to new applications. It was supposed to last two years, but demand had been so high that the money had all been allocated. Three hundred community groups have been awarded money for solar panels, biomass and wind turbines since April 2009. Another 300 will get help before April 2011. The Scottish government is looking to find more money to continue the approach, but like the whole UK public sector is currently facing extreme financial pressure.

In 2004 the Gigha wind farm opened. This was the first  community-owned, grid-connected wind farm in the UK. (Baywind only owned some turbines at a larger wind farm.) The inhabitants had bought the island in 2001 and there was unanimous support for a wind farm. It generates about two-thirds of Gigha’s electricity consumption, with carbon saving estimated at  903 tonnes CO2 per annum. The profit is up to £150,000  a year. £85,000 a year of this has been spent on housing renovation (see Repowering Communities case study: Gigha).

The Isle of Egg is off the electricity and gas grids.  There are 37 houses and five commercial properties, and all are taking part in a renewables scheme there. The community has installed four new 6kW wind turbines and a 10kW solar photovoltaic array.  It has also improved insulation, and is aiming to live within a 5kWh/household energy cap. CO2 emissions have been cut by a third. Eigg previously had two 6kW hydro plants, which have been integrated into the new island grid. To these have been added a 100kW run-of-river hydro scheme. There is a diesel back-up generator for when there is not enough water, wind or sun. The cost  of the hydro project was just over £1.65 million. £764,000 was a grant from the European Regional Development Fund, the rest from the Scottish government, the Highlands and Islands Council and the UK National Lottery, and £93,000 from the residents.

Baywind, Gigha and Eigg are small schemes. A much larger community-owned scheme is being proposed in Shetland. It is perhaps another reference to the Scandinavian origins of community ownership that this is called Viking Energy.

At present there is no electrical connection between Shetland and the UK mainland, so  most of Shetland’s electricity is generated in Lerwick by a diesel power station. Some electricity – sometimes  20% of demand – is generated by the five turbines at the small Burradale wind farm just west of Lerwick  and by micro turbines on community halls and some houses. Shetland, off the north coast of the Scottish mainland, is exposed and windy, so ideal for major wind expansion.

The Viking project is a joint venture between the Shetland Charitable Trust, the developers of the Burradale wind farm and energy utility Scottish and Southern Energy. It submitted an application for a 150-turbine, 540Mw wind farm on Shetland to the Scottish Government in May 2009. If constructed, the project would involve a grid connection to the Scottish mainland. This would open up great possibilities not only for wind, but also for wave and tidal stream power.

The Viking website states that the farm would:

  • Avoid over 1 million tonnes of CO2 per year.
  • Supply 20% of Scotland’s domestic electricity needs.
  • Generate an estimated £37 million for Shetland’s economy every year.
  • Create around 50 new skilled jobs for operations and maintenance for the 25 years of the farms operation, and an average of 230 new jobs for its five-year construction period.
  • Cost around £800 million.

(See viking energy.)

Shetland Council has been central in promoting community ownership. Viking’s project manager, Aaron Priest, has said:

In 2003, Shetland Islands Council made it clear that no large-scale renewables development should take place in Shetland without the community having the opportunity to obtain a stake. This study validates what we inherently understood those many years ago. The unique structure of the Viking Energy project gives Shetland control over how the project might come forward and will keep the greatest benefits locally.

(See The Shetland Times: Community stake in windfarm will bring three times more jobs than private project, says study.)

If the farm is built, Shetland Charitable Trust will get about £23 million each year. Viking Energy will also invest over £1 million a year in wider community benefit payments. (The fear among developers of talking about amounts of community funds before getting planing permission is less in Scotland than in England.)

In the past Shetland’s economy has been largely based on North Sea oil.  However, North Sea oil is running out (though it is thought that there is extensive oil reserves west of Shetland).  So it is excellent that Shetland is looking to move beyond fossil fuels and harness its enormous capacity for clean energy.

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