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Home > Case Studies > Scottish Case Studies > The Small Wind Co-op

The Small Wind Co-op

Background

What is the project and how did it come about?

Sharenergy has worked with communities across the UK to set up over 30 successful energy co-operatives. Talking to people up and down the country, they found that many communities are frustrated with the fact that they can only feed electricity their schemes generate into the grid but not supply it back to their members. This has led to a new venture – The Small Wind Co-op – that manages to link local generation and supply within this restrictive context. The co-operative will initially develop two farm scale turbines in Scotland and one in Wales. Sharenergy co-founder and director of the Small Wind Co-op Jon Hallé says: “We are always being asked whether we can find a way for people to use the electricity generated by their co-operative in their own home. UK regulations make this really hard to achieve but the Small Wind Co-op is an important step forward. By working with Co-operative Energy we can offer linked generation and supply, both completely mutually owned. We’re slowly prising bits of the UK energy infrastructure out of the hands of the corporations and into the control of ordinary people where it belongs.”

Legal structure & set-up

How does the partnership work?

People become members through investing in The Small Wind Co-operative Limited. The co-operative follows the one-member-one-vote principle, which means members have an equal say in decisions regardless of the size of their investment. In addition members are able to consume the energy their wind turbines generate. In order to bypass the restrictive policy environment of the UK, the Small Wind Co-op has linked up with Co-operative Energy, an established renewable energy supplier. Co-operative Energy will buy all the electricity generated by the scheme. If Small Wind Co-op members then sign up with Co-operative Energy, they can ask for their energy to be sourced from their wind turbines. They will in effect receive a special green electricity tariff only available to members of the Small Wind Co-op.

Financing

How was the project financed and what happens with the profits?

Finance for the project comes from ordinary people buying shares from a minimum of £100 (€110) to a maximum of £100,000 (€110,000). The share offer initially raised over £1 million (€1.1 million) providing an estimated return on investment of up to 6.5%. According to Stuart McMillan, MSP: “One million pounds is a fantastic achievement and I’m delighted that work can now go ahead on the Kellybank turbines, supporting initiatives that improve employment prospects and grow a further sense of community in Inverclyde.” A second tranche looks to raise a further £550,000 (€610,000).

For both sites, the scheme also makes a limited number of bonds available for people who want to support the project but who prefer a shorter-term investment. Six-year bonds will pay 4.5% of annual interest. The development benefits from Feed-in tariffs, which are included in the financial projections. However, the turbines have to be operational by April 2017 to guarantee the pre-accredited tariff. Over the 20 year lifespan of the project both sites will generate income to local community funds of at least £3,000 (€3,400) each per year, while members will be able to receive affordable electricity from local renewable sources.

Key Challenges

  • Developing a new model
  • Retaining local benefits in a cross-border co-operative
  • Working in the rapidly changing UK policy environment

Key Benefits

  • Co-operative ownership of energy
  • Connecting generation and supply
  • Local community funds
  • Supporting marginal upland farms

Type of Energy Project

Wind generation and supply

Stage of Development

Post-planning

Website

http://www.smallwind.org.uk

Twitter

http://www.twitter.com/sharenergy_uk

We are always being asked whether we can find a way for people to use the electricity generated by their co-operative in their own home. UK regulations make this really hard to achieve but the Small Wind Co-op is an important step forward. By working with Co-operative Energy we can offer linked generation and supply, both completely mutually owned. We’re slowly prising bits of the UK energy infrastructure out of the hands of the corporations and into the control of ordinary people where it belongs.

Jon Hallé - Director of the Small Wind Co-op; Sharenergy

 

Jan 2014

Registered with the Financial Conduct Authority

2015

Planning permission granted on both sites

June 2016

Launch of first share and bond offer

August 2016

First share and bond offer closes with over £1 million (€1.1 million) raised

October 2016

Second share offer launches; turbines on order for both sites

April 2017

Turbines are expected to be operational in line with FIT pre-accreditation timeline

 

Case Study PDF

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