Jan 17 - Scotsman, The


A Scotland-wide co-operative could be established next year to allow people to take a stake in, and earn money from, green energy developments.

Four local energy co-ops have been set up in Scotland and three in England and a national organisation is now being proposed.

It is felt that money from the Caledonia co-op will help some community-based renewable schemes get off the ground and the credit crunch will not deter potential investors.

Many developers provide benefits to people living near wind farms by paying into community funds to assist local projects.

Other areas fund and own their own small-scale wind farms through trusts, with profits ploughed back into local schemes. In 2004, the Isle of Gigha Heritage Trust established Gigha Renewable Energy, which runs the first community owned wind farm to be connected to the UK national grid.

The co-op model is being promoted by Energy4All, which helped develop the first wind farm co-operative in Scotland, at Boyndie in Banffshire in 2006, and has helped set up others at Ben Aketil on Skye, Kilbraur, in Sutherland, and Fort Augustus in the Great Glen.

More than 700 people invested GBP 750,000 in the Boyndie co-op, with stakes as small as GBP 250. More than GBP 800,000 was raised at Ben Aketil, while the Kilbraur Wind Energy Co-operative, which originally aimed to raise GBP 250,000 from shares costing as little as GBP 1, eventually pulled in more than GBP 1 million. The Great Glen co-op raised GBP 1.3 million.

A feasibility study into a national co-op will be completed in March and it is hoped it can be set up by the end of next year.

Mark Jennison, development director Scotland for Energy4All, said so far co-ops had been connected to specific wind farm sites. However, it is hoped Caledonia would offer a broad portfolio of renewable energy projects.

"We found that people heard about the co-ops but they don't have a particular project in their locality. A lot of people in the Central Belt are keen to help projects and invest in them but they don't have a renewable project on their doorstep.

"We also have projects in remote areas where there is such a small population that you could not have a successful co-op.

"What we want to do is bring these two things together and create a Scotland-wide co-op where anyone can own a stake in a portfolio of renewable energy projects without having to buy shares in a big commercial company."

He said the credit crunch may even encourage people to consider investing in these projects: "We thought the credit crunch might affect people but it's not proved to be that way.

"The Kilbraur share offer was opened at the start of the credit crunch and it raised over GBP 1 million. People may feel their money is safer in this kind of share offer. They are linked to the performance of the wind farm, so as long as the wind blows it should be a pretty good investment."

He said returns are not fixed but on the existing Scottish co- ops, a minimum of 6.5 per cent is guaranteed, with an expected average of 10 per cent if the project performs as expected.

"What we find a typical investor wants is something not too risky but that gives a better return than you might get in a savings account, while supporting ethical projects."

So far only one energy company, Falck Renewables, has signed up to the community co-op idea. Mr Jennison said: "Falck feels that having an element of community ownership is a good move.

"Not all developers see it that way. We have talked to every wind farm developer in Scotland. There has been a lot of interest but commitment has been slow, although I think that will change."

Charles Williams, Falck's business development director, said: "We got involved [in co-ops] because it's helpful to get wider understanding and acceptance of wind farms. We recognise there is an impact on the landscape when we install a wind farm and we want to give back something to the community and share some of the benefits. As people have become more comfortable with the concept we have seen more investment."

But Eric Dodd, national projects manager for Community Energy Scotland, which has helped set up more than 20 community renewables projects, is cautious.

"If it is a source of funding that can be used but ensures that projects are still owned and controlled by the local community, it can be a good idea. However, the devil is in the detail.

"Our concern, as with all funding, is that the control rests with the community, because they are doing it for a wider social purpose, to benefit everyone, rather than to benefit individual investors."

BACKGROUND

The four local co-ops set up so far are:

BOYNDIE AIRFIELD, ABERDEENSHIRE: The seven-turbine, 2MW project was approved in January 2004 and work started on the GBP 10 million- GBP 15 million scheme in June 2005 and is said to supply enough energy for 8,500 homes.

BEN AKETIL, SKYE: The majority of the development is on the MacLeod Estate and this land is crofted by the Feorlig Crofting Community. There are ten turbines, each producing 2.3MW of power, enough to supply around 14,000 homes.

GREAT GLEN: The Millennium wind farm is located in the hills north of Invergarry and southwest of Fort Augustus and Invermoriston. Sixteen 2.5MW turbines produce electricity to supply around 22,400 homes.

It is estimated that the wind farm could displace up to 84,000 tonnes of carbon dioxide each year which would otherwise have been produced by a power station burning fossil fuel.

KILBRAUR, BRORA: The wind farm is located in the Kilbraur area of Strath Brora, Sutherland. Nineteen 2.5MW turbines supply electricity to around 27,000 homes, saving up to 107,000 tonnes of carbon dioxide each year.

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