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COMMUNITY POWER SCOTLAND Text and Layout: Anne Schiffer Recommendations: Clientearth Published By: Friends of the Earth Scotland Date: September 2014

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COMMUNITY POWER SCOTLAND Text and Layout: Anne Schiffer Recommendations: Clientearth Published By: Friends of the Earth Scotland Date: September 2014 FROM REMOTE ISLAND GRIDS TO URBAN SOLAR CO-OPERATIVES COMMUNITY POWER SCOTLAND Text and layout: Anne Schiffer Recommendations: ClientEarth Published by: Friends of the Earth Scotland Date: September 2014 Contact: Friends of the Earth Scotland Thorn House 5 Rose Street Edinburgh EH2 2PR E: [email protected] T: 0131 243 2700 This report is printed on Revive 100% recycled Uncoated matt paper Cover: Friends of the Earth Scotland CONTENTS 3 WHAT’S IN THIS REPORT INTRODUCTION COMMUNITY POWER IN SCOTLAND P. 4 SCOTTISH CASE STUDIES THE SPIRIT OF LANARKSHIRE WIND CO-OPERATIVE P. 7 EIGG ELECTRICITY P.10 DINGWALL WIND CO-OP P.12 KINGUSSIE HYDRO P.14 EDINBURGH COMMUNITY SOLAR CO-OPERATIVE P.16 HARLAW HYDRO P.18 NEILSTON COMMUNITY WIND FARM P.20 BRIGHT GREEN HYDROGEN P.22 FETLAR ELECTRIC MINIBUS P.24 ABERDEEN HEAT & POWER LTD P.26 BLUEMULL TIDAL ENERGY LIMITED P.28 FINTRY ENERGY EFFICIENT TRANSPORT P.30 BEINN MHOR WIND FARM P.32 SCORAIG WIND ELECTRIC P.34 DISCUSSION REALISING THE SCOTTISH COMMUNITY POWER POTENTIAL P.37 RECOMMENDATIONS SUMMARY P.38 INTRODUCTION COMMUNITY POWER SCOTLAND WHAT IS COMMUNITY ENERGY WHY COMMUNITY ENERGY The term community energy is used in In the context of climate science and our a variety of different contexts including historical responsibility for greenhouse gas electricity and heat generation, grid emissions, perhaps the most important legacy management and collective power that Scotland can leave for future generations purchasing. Community energy may describe is the transformation of our energy system a geographic community or a community of from one dependent on dirty, finite fossil interest. fuels to one run on clean, green renewables. Blessed with abundant renewable resources As such it is useful to define community including wind, hydro, tidal, wave and solar, energy through common characteristics. Scotland is already making good progress on These include: this front. • Ordinary people or citizens are involved However while the transition to a renewable in running the project through community energy system is broadly understood to be groups such as co-operatives or necessary, it is crucial that in our urgency to development trusts address the climate problem we do not miss • There is a co-operative, democratic or this opportunity to address the underlying specifically non-corporate structure inequalities of our current highly centralised • There are tangible local benefits to people energy system. living or working close to projects • The profits go back to the community or Both the environment and people must be at are re-invested in other community energy the heart of the renewables transformation schemes. and the best way to achieve this is through Community Power - people’s ownership of As community energy grows and develops as renewable energy. In order to really deliver in a concept, its benefits are better understood. terms of climate change and a fairer energy In addition to helping achieve emissions system, community energy needs to become reductions, it enables communities to harness much bigger and broader than the current, local natural resources to build social capital, albeit expanding, niche it occupies. create local and regional employment opportunities, create revenue to address COMMUNITY ENERGY IN SCOTLAND community development needs and combat The aim of this report is to show the great fuel poverty. diversity of community energy projects that exist in Scotland by sharing some great Community ownership and participation in examples. Community power has been projects can also help generate support and instrumental in helping Scotland establish acceptance of renewables more broadly. itself as a leader in renewable energy and Furthermore, involvement in community keeping the Scottish Government on track to projects helps stimulate citizen interest meet its ambitious target of the equivalent of in other areas of energy such as energy 100% demand for electricity to be met from conservation and demand side management. renewable sources by 2020. 5 Support for community energy will be critical motivated by combating fuel poverty, to meeting nationally-binding greenhouse creating income for community development gas reduction targets for 2020 and 2050, and or concerns about climate change. The decarbonisation of the power sector by 2030. studies highlight the key challenges as well as the sometimes unexpected benefits of The Scottish Government continues to these schemes, and explore different legal demonstrate support for community energy, structures and financing mechanisms. Finally, for example, through its unique locally and the report concludes with discussion and community owned energy target of 500MW recommendations for policy and legislative by 2020 and funding opportunities. These changes that will be essential to enable include the Community and Renewable communities the length and breadth of Energy Scheme (CARES), the Renewable Scotland to play a leading role in the Energy Infrastructure Fund (REIF) and the £20 transition to a clean, green, fair energy million Local Energy Challenge Fund which system. was announced in August 2014. In the following pages we share examples of communities who have come together to create local energy projects whether HIGH GENERATING HIGH GENERATING CAPACITY CAPACITY Scotland needs LOW COMMUNITY HIGH COMMUNITY to be here OWNERSHIP OWNERSHIP LOW GENERATING LOW GENERATING CAPACITY CAPACITY LOW COMMUNITY HIGH COMMUNITY OWNERSHIP OWNERSHIP BLUEMULL TIDAL ENERGY LIMITED FETLAR ELECTRIC MINIBUS SCORAIG WIND ELECTRIC ABERDEEN HEAT & POWER LTD DINGWALL WIND CO-OP EIGG KINGUSSIE ELECTRIC HYDRO BEINN MHOR BRIGHT GREEN WIND FARM HYDROGN FINTRY ENERGY EDINBURGH EFFICIENT COMMUNITY TRANSPORT SOLAR CO-OPERATIVE THE SPIRIT OF HARLAW NEILSTON LANARKSHIRE HYDRO COMMUNITY WIND WIND FARM CO-OPERATIVE Location South Lanarkshire ENERGY 7 Size of community 607 co-operative members DEMOCRACY Type of energy project Wind energy SPIRIT OF Stage of development Implemented LANARKSHIRE WIND CO-OPERATIVE BACKGROUND of Spirit of Lanarkshire and thereby own it. Under an innovative agreement between Legally, members are protected by limited commercial developer Falck Renewables liability and allowed to make decisions Wind Limited and not-for-profit company through a ‘one member one vote’ system in Energy4All, Scottish wind farms developed by Annual General Meetings. Energy4All will the former allow local energy co-operatives carry out administrative services on behalf set up by Energy4all to buy an economic stake of Spirit of Lanarkshire for which it will be in the developments. Spirit of Lanarkshire compensated by Falck. is the fifth project under this agreement but the first to have stakes in two separate wind Nutberry Wind Farm became operational in farms near Strathaven: Six 2.5MW turbines are August 2013 and West Browncastle started located at Nutberry Hill and twelve 2.5MW generating electricity in April 2014. The Spirit turbines at West Browncastle. of Lanarkshire co-operative started trading with the purchase of a stake in the Nutberry LEGAL STRUCTURE & SET-UP Wind Farm in September 2013. Energy4All has established Spirit of Lanarkshire as a Co-operative Society, and FINANCING bought a combined stake of £2.7 million (€3.4 Spirit of Lanarkshire was required to raise a million) in the developments. This means Spirit minimum of £250,000 (€316,000) for each of Lanarkshire does not own a percentage wind farm to be entitled to purchase a stake in of the physical asset but rather that it is the developments and the ‘right to revenue’. entitled to a percentage of financial earnings, The maximum investment was £1 million (€1.3 appropriate to its investment. million) for Nutberry and £1.7 million (€2.1 million) for West Browncastle. The operation and management of the sites is handled by Falck subsidiaries NWEL at To achieve its target the co-operative launched Nutberry Wind Farm and WBWEL at West a share offer that allowed members of the Browncastle Wind Farm. Energy4All monitors public to buy between 250 and 20,000 shares Falck’s performance which has a good track- with a £1 value each. Local investors take record of providing returns for members of priority over regional investors and members other co-operatives under its agreement with of other Energy4All co-operatives. Energy4All. The co-operative itself is governed Falck has guaranteed that the return on by a Board of Directors under rules approved investment excluding expenses incurred by by the Financial Conduct Authority (FCA). the co-operative does not to drop below 6.5% Through investment in shares individuals per annum. It is however estimated that the or other co-operatives become members annual return is likely to average at 9.92% In the UK, we have a long way to go to match what has already happened in Germany and in “some parts of the United States “ but the Spirit of Lanarkshire is a very welcome step in the right direction. Tom Greatrex - Shadow UK Energy Minister Photo: Spirit of Lanarkshire Wind Co-operative 9 over the project’s 25 year lifespan. After 25 Sep 2006 Initial planning proposal for Nutberry years the full investment will be returned to submitted shareholders. May 2010 Nutberry planning application granted South Lanarkshire Council strongly Sep 2010 Initial planning proposal for West encourages wind farm developers to commit Browncastle submitted to payment into its Renewable Energy Fund. South Lanarkshire Council then takes control Nov 2011 West Browncastle application granted of community
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