Once upon a time, the Water of Leith River that runs through Balerno, a suburb on the outskirts of Edinburgh, powered approximately 70 mills located on its banks. Concerns over climate change and the need for green energy are now driving the local revival of hydro technology.
Harlaw Hydro aims to produce electricity through a 95kW hydro scheme that will generate enough electricity for approximately 56 homes and save 129 tones of carbon.
Legal structure & set-up
In September 2012 the Balerno Village Trust (BVT) set up Harlaw Hydro Ltd, an Industrial and Provident Society (IPS), to install and manage the proposed hydroelectric scheme at the local Harlaw Reservoir.
Harlaw Hydro Ltd is a co-operative structure owned by its members who have one vote at the Annual General Meeting regardless of the amount of shares they own. The current board of directors was elected at the society’s first AGM in May 2014 when they took over from the interim board that had governed until then.
Feasibility studies were funded through grants from the Scottish Government’s Community and Renewable Energy Scheme (CARES). Expense was kept to a minimum with team members giving their skills and time for free. The funding needed to get the project to the share offer, including £1500 (€1,900) for the share offer document, it largely came from earnings of BVT’s monthly farmers market.
The legal set-up of Harlaw Hydro Ltd made it possible to raise the capital investment needed for the scheme through a share offer, something the legal structure of BVT a company limited by guarantee with charitable status does not allow. The share offer was so successful, raising all the £313,000 (€393,000) required, that there was no need to look for other funding sources as originally anticipated. In fact it raised a total of £335,250 (€421,500) through minimum investments of £250 (€314). However, delays and changes to the project including an increase in turbine size from the originally planned 65kW to 95kW have since led to a rise in cost of an additional £50,000 (€63,000), which is likely to be raised through a re-launch of the original share offer.
The scheme will generate income by selling electricity to the national grid at a commercial rate of 3.2 pence (4 cent) and Feed-in Tariff payments, which are guaranteed for 20 years at 20.21 pence (25 cent). Members of Harlaw Hydro Ltd will receive approximately 4% interest payments on their investments. The surplus generated will be used for the benefit of the community through the Balerno Village Trust. Members also have the opportunity to benefit from Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme (EIS) tax relief: 50% of the value of shares for SEIS or 30% for EIS can be claimed back against income tax.
- Though generally supportive Edinburgh City Council caused delays through lengthy processes
- Generation of green electricity
- ncome generation to fund local community initiatives
- Educational benefits
- Community involvement
* At the time CARES was administrated by Community Energy Scotland.
Size of Community
232 members and growing plus wider community of Balerno
Type of Energy Project
Stage of Development
Balerno Village Trust sets up Harlaw Hydro Ltd
SEPA granted Controlled Activities (Scotland) Regulation (CAR) license
Planning permission granted
Terms of lease for City of Edinburgh Council approved
Application for connection to national grid
Share offer launch
Share offer closes
Contract for construction work goes out to tender