B6: Building Benefits - Building a Legacy
B6: Building Benefits - Building a Legacy Rachel Ruffle RenewableUK Board Member and Director of Development, UK & Ireland, RES climatechangematters limited
Democratising the value of wind : steps to create lasting community value
And transform the current energy debate RenewableUK Annual Conference Birmingham 6 November 2013
Jonathan Johns Director Climatechangematters limited and Chair of Communities for renewables CIC
[email protected] tel 01392496864/07831486987 Democratising the value of wind :steps to create lasting community value
The UK has long been on the threshold of community wind
Delabole The first commercial wind farm in the UK 1991 now Good energy
Baywind The first community wind farm in the UK at Harlock Hill 1997 led to Energy4all
Westmill solar energy coop 2012 (followed the 2004 Westmill wind farm coop)
Community for renewables CIC 2013 taking planning risk for communities
There’s much less than 100mW community wind in the UK
Its conceivable community solar could overtake in 5 years
Without a vibrant community sector the UK may not get to fully exploit its onshore resource : Government focus is shifting……
climatechangematters limited Democratising the value of wind :steps to create lasting community value
In Germany, Denmark, the Netherlands community wind has consistently been one of the leading ownership models
And not just for de-rated 500k turbines but 2 to 15 MW projects and even Offshore In parts of north Germany 46% even 90% of onshore wind is community owned: utilities are minor players Middelgrunden Denmark (4% of Copenhagen’s power) 40MW community offshore wind project Why is this ? 50% funded by co-op share offer, 50% by municipal utility
Feed in tariffs combined with tax efficient investment and local bank finance
Developers quick to tap into retail investors (and later retail infrastructure funds).
A less consolidated electricity industry with greater municipal participation
climatechangematters limited Democratising the value of wind :steps to create lasting community value
In the UK under the RO the model shifted to a utility dominated develop and sell model
The economic connection with local communities narrowed…. As energy prices rose so did moral hazard
Now we have Mr Pickles 6 month Recovery of planning appeals and Mr Cameron’s green roll back. There is a point In return for hosting wind farms we need to let the people invest and communities have tangible benefits.
The building blocks are there
Utilities no longer want or are able to be the dominant source of capital
The public and institutions have invested over £1billion in aggregated renewables at 6 to 7 per cent returns witness Greencoat, RIG,Foresight : with Infinis to come.
climatechangematters limited Democratising the value of wind :steps to create lasting community value
Why does community involvement matter for UK developers ?
Increased availability of land more planning support and reduced moral hazard
Increased chance of project extension and hybridisation eg solar and wind.
Sharing of the development risk and effort with community partners (eg Cfr ) defra loans
Opportunity to participate in Escos , private wires models and future energy demand smart grid and renewable heat businesses
climatechangematters limited Democratising the value of wind :steps to create lasting community value
Why does community involvement matter for UK developers ?
project economics
Funds/utilities typically bought/funded projects at an IRR of 9 to 12% (and higher) ;
often sold to aggregators at 8 to 9%
on to retail investors at 6% to 7% .
Community projects offer the ability to access retail EIS investors direct at 7%
And provide greater local benefits .
climatechangematters limited Democratising the value of wind :steps to create lasting community value
Developer business models: alternatives to aggregate and sell
Light touch: Generous community fund: compared to current Renewables UK guidelines. Provision of power discount within defined catchment, use of private wires
Replacement of bank debt with public bonds or crowd sourced equivalent
Part ownership of project
Community ownership of spliced project using qualifying EIS preferred shares
Sale of whole project to local EIS coop at defined margin
Co development of project with community vehicle sharing profits
Service and asset management provider to community funded schemes
Community orientated development and Escos helping the local fuel poor
climatechangematters limited Democratising the value of wind :steps to create lasting community value
There are some issues :Lets hope the community consultation brings tangible encouragement
A 10MW community fit and PPA support for Cfd fit ?
Ofgem developed community friendly rules for shared metering + connection
Removal of red tape preventing sale of electricity to local customers/ businesses
Why not a Dutch Zeleverings model or remote net metering whereby utilities transport and balance power from generators to consumers
If this occurred even offshore could become community and high energy user owned
climatechangematters limited Democratising the value of wind :steps to create lasting community value
In the next 7 years (before Nuclear is built) Community wind and direct public investment in renewable infrastructure could radically increase deployment,
allow local power sales fund local fuel poverty initiatives bring forward grid parity
…….transforming the current energy debate .
And offer an alternative route to aggregators: for developers seeking to recycle capital – and benefit from a more sustainable business model
climatechangematters limited Democratising the value of wind :steps to create lasting community value
CfR’s model provides genuine local ownership, a meaningful community benefit fund and electricity discounts for locals
CfR provides Success fee rewarded development and consultancy services :surplus profits recycled to further projects
CfR works with communities and partners with developers.
There are practical, regulatory and structuring issues to consider
Contact: Jake Burnyeat CEO [email protected] jjohns@ climatechangematters.biz 07815 014540 07831 486987 http://www.cfrcic.co.uk To download climatechangematters The Big society and renewables Climatechangematters and Regen Southwest reports Let the people invest Climatechangematters and Transform UK High energy users and renewables Climatechangematters (with the REA) go to http://renewablematters.biz See also: The community renewables economy res republica
climatechangematters limited
Achieving positive impact and legacy with community benefit
Rachel Searle-Mbullu, Foundation Scotland Matt Pilkington, UK Community Foundations Content
• Community Foundations - who we are & what we do • The scale of the legacy opportunity • Some current investments • A conceptual framework for achieving legacy • Creating the enabling environment for impact & legacy Partners in Philanthropy
Scottish Charity No. SC022910 Legal Structure of client funds managed by Foundation Scotland
Foundation Scotland Trustee Board
E.ON Camster AES Drone Hill EDF Burnfoot Community Fund Community Fund Community Fund Community Panel Community Panel makes Community Panel makes makes funding decisions funding decisions funding decisions
Over 200 funds, locally focused, under one governance “roof”
Scottish Charity No. SC022910 Community benefit funds managed by Foundation Scotland
Confirmed Sites Annual Fund value (base year) Bay Wa r.e. UK Kildrummy £25,000 Vattenfall Clashindarroch £185,000 Infinis A'Chruach £100,000 RWE nPower An Suidhe £29,000 EDF Burnfoot Hill £30,000 AES Wind Gen. North Rhins £29,000 SSE Clyde £150,000 Lairg Wind Farm £15,000 E.ON Camster £150,000 E.ON Rosehall £63,000 Vattenfall Edinbane £9,000 Whirlwind Renewables Wathegar £42,000 RWE nPower Lochelbank £20,000 Ochil Developments Blackford £20,000 FIM Services Ltd Torrance Farm £36,000
Capital Dynamics Torrance Farm Extension £24,000
AES Wind Gen. Drone Hill £40,000 EDF Longpark £45,000 Infinis Glenkerie £70,000 Falck Earlsburn £35,000 £1,117,000
Scottish Charity No. SC022910 The legacy challenge/opportunity in Scotland
2012/13 £6.92 million
2017 £18.87 million
2020 circa £50 million Community owned facilities & services (i) Community owned facilities & services (ii) Community owned facilities & services (iii)
Investing in community assets
Capital Examples of relevant assets Examples of flows of goods and services in a rural context Financial Income; wealth; security; credit; Models of finance - eg commercial loans; investment private sector partnerships Shares in the community shop Built Housing; transport and Broadband connection, public spaces telecommunications infrastructure; Community transport utilities; buildings Renewable energy Human Self-esteem; education; skills; health; Local leadership development programme; jobs recreational & leisure clubs & services Social Leadership; groups; bridging and Committee for the agricultural show bonding networks; trust; reciprocity Farmers' market; youth groups Rural women's network Natural Natural resources; ecosystems (land; Raw materials (eg land used for crops; minerals/energy; soils; water) water/barley used for whisky) Food produced from the land Fish/farm stock Cultural Language, rituals and traditions, a Festivals; Revival of indigenous language; sense of place Tourism features Political Inclusion; voice; power Development trust Source: www.scotland.gov.uk more than weaknesses
rather than problems
What can be done instead of what can’t be done Half-full or Half-empty?
Individuals & Communities have deficiencies & needs
Individuals & Communities also have skills and talents
Source: Forever Manchester – the Community Foundation for Greater Manchester In what context is the fund designed & delivered?
A transactional resource A transformative resource… Focus on Deficiencies Focus on Assets Short term view Long term vision Problem Response Identify Opportunities Welfare/benefit Orientation Investment Orientation Grants Grants, Loans, Investments, Leverage Competitive Collaborative Maintenance - Dependency Development - New Ideas Community in the back seat Community in the driving seat Tame problems Wicked problems Sticking plasters Systemic change Source: Foundation Scotland adapted from Forever Manchester A community-led approach
Towards legacy & impact
Fund Priorities Community Plan Distribution Administration Decision making Review & Learning Relationship with the external environment
Source: DFID, 1999
The legacy of community benefit funds….
• About Us • Options • Effective Use – Sancton – Roskrow – M48 • Conclusions • Cornwall Light and Power Ltd was initially established in 1993. • In November 2010 the company became REG Windpower. • REG Windpower operates 14 wind projects in the UK, with a total capacity of 67.15MW. • Over 33MW projects in or awaiting construction and over 140MW in the planning system. • Offices in Truro, Bath, Leeds & Guildford. Reduced Habitat Enhancement Sponsorship Electricity Opportunities Cost
Crowd Funding
Mentoring Joint Internships Benefits Ventures Local Contractors £5k per Community Investment MW Improved Access Open Community Days Ownership Retention Educational of Business Visits Rates
Turbine Naming Since the wind farm received consent it has supported the following projects: £35,000 Per Year Sancton Village Hall Sancton Play Equipment Water supply to Sancton Allotments All Saints Church Carpets & Furniture Fund will Sancton Methodist Church floor & windows Administered by a continue Cookery Courses in Newbald panel comprising throughout members of two turbines’ Newbald Village Hall repair nearest parishes operational lifespan 93% of our visitors felt “It’s good that your company is positive or very involving the local community” positive about wind energy after the Open “It’s good that your -companySarah Wright, is Broughinvolving the Day local community” -Sarah Wright, Brough“Before I was unsure, now I feel more positive” “Before I was unsure, now I feel more positive” -Josh Thorpe, SanctonDfgb sgb -Josh Thorpe, Sancton “It’s very good to seecfdsfdsff the commitment being made to the local community”“It’s very good to see the -William“It’s good Gant, that Sancton yourcommitment company“It’s good is that beinginvolving your made the to the “It’scompanylocal good community” thatis involving your companylocal the community”local is community”involving the local-Sarah community” Wright, Brough -Sarah Wright, Brough-William Gant, Sancton -Sarah“Before“Before Wright, I was I was unsure,Brough unsure, now now I feel I feel more more positive” positive” -Josh-Josh Thorpe, Thorpe, Sancton Sancton “It’s“It’s very very good good to tosee see the the commitment commitment being being mademade to tothe the local local community” community” -William-William Gant, Gant, Sancton Sancton It’s not all about the money
Ongoing community interaction Access to supporters (not NIMBYs) Low installed capacity vs high local Challenging population local politics
Innovative approach to community involvement
Option to Buy M48 windfarm with Bristol Energy Coop Communicate Ask for suggestions Clearly – constantly!
Be Innovative Be Flexible
Identify Key Give good Stakeholders examples
Clear Strategy Use Operating for Each Project Projects Questions?
@roskrowwindfarm www.facebook.co.uk/roskrowwindfarm