To Nordic Folkecenter for Renewable Energy Document Type Memo, Draft translation Date January, 2013 WIND ENERGY AS A LEVER FOR LOCAL DEVELOPMENT IN PERIPHERAL REGIONS WIND ENERGY AS LEVER FOR LOCAL DEVELOPMENT IN PERIPHERAL REGIONS Version 03 Date 10/12/2012 Made by Kasper Brejnholt Bak Checked by George White Approved by Søren Juel Petersen CONTENTS 1 INTRODUCTION 1 1.1 National Planning Perspectives 2 1.2 The Role of Municipalities 3 2 WHY LOCAL OWNERSHIP? 4 3 EXAMPLES OF LOCAL OWNERSHIP MODELS 5 3.1 Industrial Foundation: Hvide Sande 7 3.2 Consumer owned: Nørre Nissum Bay, Lemvig 9 3.3 Municipal Ownership: Samsø Municipality 11 4 POTENTIAL FOR CREATING JOBS IN PERIPHERAL AREAS THROUGH WIND TURBINES 13 5 A NEW MINDSET AND LOCATIONS WITH SPECIAL POTENTIAL 16 6 RECOMMENDATIONS TO PROMOTE LOCAL OWNERSHIP OF WIND TURBINES 17 7 THE WAY FORWARD 19 1 1 INTRODUCTION Nordic Folkecenter for Renewable Energy has asked Rambøll to develop this memo, which illustrates the potentials of local ownership of wind turbines as a possible lever for local development in remote areas. The aim of the paper is to raise awareness of the potentials of local ownership models, in order to create a more positive interest in wind projects for both municipalities and the general public. Local ownership models have two distinct advantages which should have a nationwide policy interest: 1. By ensuring local ownership, local acceptance of wind turbines increases and, instead of protests, active initiative from a broader group of local players will be achieved. That way the government's goal of increased onshore wind power capacity of 1,800 MW on-land can be realised with sufficient support. 2. The regions of Denmark where the wind is stronger are also the ones with the greatest development challenges. This way ensuring that profits from electricity generation support local economy should create a basis to improve development in marginal areas of Denmark. local ownership acceptance and initiative increased onshore wind power capacity and strengthened local development in peripheral regions This memo illustrates through three examples with different ownership models how local ownership can contribute to acceptance and to local development of peripheral regions and finally puts those experiences into perspective regarding the possible actions that can support the proposed development. 2 1.1 NATIONAL PLANNING PERSPECTIVES In the Energy Agreement of March 2012 the government decided that 50% of Danish electricity production must come from wind turbines by 2020. This has raised focus on possible locations for wind turbines and the barriers that may exist for a successful implementation of wind projects. According to the Energy Agreement, 1,800 MW onshore wind capacity should be installed by 2020, 500 MW near-shore and 1,000 MW offshore. This means that a significant share of wind turbine construction should happen on land. From a national policy point of view, there is a great potential in linking energy policy, land planning and rural development since there is a significant overlap between the peripheral regions in Denmark, often called "the rotten banana", and the regions with the largest wind resource. From this emerges the contours of a possible new map of Denmark, where these areas could have a new and stronger role on the basis of their natural potentials. Production of sustainable energy has enormous social value, which should be supported and valued both locally and nationally, since it creates a more solid industrial foundation for local economic development in rural areas, which can help to create greater balance in Denmark. There is a very interesting correlation between peripheral areas in Denmark with developmental challenges, often called "the rotten banana", and the areas with the greatest wind resources. This underlines the potential for locally owned wind power to become a lever for local development in remote areas. 3 If the anticipated 1800 MW onshore capacity could not be installed due to local protests, the alternative solution would be to increase offshore capacity more than already planned, which is a much more expensive option. In this way, the higher the capacity installed on land, the lower the electricity price, which benefits both consumers and competitiveness. With the expansion of onshore wind turbines several billions can be saved compared to producing the same amount of electricity offshore, while there are potentially significant local profits from electricity production that could support development in peripheral areas, because this is where the greatest wind resource is. There will be a significant potential for creating sustainable income in the country's remote areas from 1,800 MW new wind capacity, probably distributed between 600-800 turbines. Even with a conservative estimation expecting also other actors' participation, local ownership could create an annual surplus of not less than 500 million DKK, which could help maintain or create local development in peripheral areas. 1.2 THE ROLE OF MUNICIPALITIES The planning of onshore wind turbines is a municipal responsibility. Many municipalities have entered the field as active participants in a green transformation of the Danish society, some have even formulated climate policies with the goal of future CO2 neutrality, and most have also signed an agreement with the Danish Society for Nature Conservation to become a so-called Climate Municipalities. The agreement includes a declaration that municipalities will reduce their CO2 emissions by 2% per year for a fixed number of years. Wind energy will play a significant role in achieving these municipal ambitions which has also given wind turbine planning a renewed focus. The Planning Act has also been amended so that it is now possible to incorporate the goal of climate change adaptation and prevention of pollution in the objects clause of the plans. It is possible to prospectively impose requirements for new construction and renovations justified by climatic conditions. In other words it seems that municipalities will play a much more active role in the transformation into a sustainable energy system where energy demand is reduced through building renovations and stricter requirements for new construction, and energy supply becomes more sustainable due to the development of renewable energy which will mainly come from wind turbines. Municipalities in peripheral areas in Denmark are challenged by emigration, stagnation and decline. They are generally areas with a low population density, low house prices and a declining economy. However, there is more than twice as much wind as in the rest of the country, therefore these municipalities have some special opportunities for the use of the wind as leverage for local development. Imagine if there could be a new role for these municipalities with a higher degree of economic independence, entrepreneurial innovation in sustainable energy and energy production for the whole country due to the installation of wind turbines! For this to succeed it should be possible to reinvest the profits from electricity generation locally so that they act as a catalyst for green growth and sustainable transition in remote areas. This is why local ownership is essential and local authorities should play a much more active role than has been the case so far. 4 2 WHY LOCAL OWNERSHIP? In order to achieve the very ambitious targets of both the state and the municipalities of increasing wind power capacity, there should be a minimum degree of acceptance of wind turbines in the affected part of the local population so that wind projects can actually be implemented. 80% of Danes are generally positive about wind turbines, however a similar proportion is against the establishment of wind turbines in their community. "Not in My Back Yard" seems to be the motto, and the challenge is how to create an ownership of wind turbines with a wide public acceptance; being aware of the necessity of a transition to renewable energy and where a local activation of profits from the turbines would create a greater acceptance and understanding of the nuisances and changes in the visual environment that wind turbines can cause at least to the closest neighbours. After the residence requirement was repealed in 1998, wind turbine owners / investors may live far from the communities where turbines are erected, generally in tax havens in the Cayman Islands or elsewhere. This means that the value of the wind, which is one of the few resources in remote areas, is effectively drained out of local areas while local citizens have to live with the nuisances that may be associated with turbines. This has created a situation in which almost automatically there is local resistance when considering the installation of wind turbines. There are currently as many as 200 local groups opposed to wind turbines nationwide. By putting local ownership in the centre a positive and self-reinforcing effect can be created where it becomes clear that wind turbines are for the benefit of local communities or municipalities in a broader sense. This makes it easier to gain acceptance for the subsequent projects since citizens will notice that the initiative is increasingly created locally due to the economic incentive of ownership models that promote local development. L oca l ownership Development Acceptance Economy Initiative Putting local ownership in the centre can create a positive cycle of development. 5 The local political dilemma for politicians who want to be re-elected is whether they will support the development of renewable energy by "stepping on local people's toes" by neglecting the often many objections because projects primarily benefit just a handful of people - often developers who do not live in the area. In Thisted municipality, for example, experience from 2012 shows that there were over 500 pages of objections in connection with the approval towards a number of wind projects.