Meeting the UK’s climate targets will require a steady expansion in the supply of low-carbon electricity, for example from renewables. Most renewable energy projects in the UK are owned by private firms. This contrasts with experience in some European countries – particularly Germany and Denmark – where some firms are owned by local communities.
Community ownership offers potential benefits in increasing local approval rates for projects and in raising finance, potentially at relatively low cost. It can also help ensure local concerns are addressed in development and secure more of the benefits for the community hosting the project. There may also be disadvantages to community ownership: community schemes may not have access to the same expertise or experience compared to firms that run many installations, there may be challenges separating management of the assets from ownership and financing can be more complex.
Earlier this year, members of the CCC secretariat paid a visit to the UK’s first 100% community-owned wind farm based near Swindon to find out more about how these different issues play out. Located on a working organic farm, the Westmill Wind Farm has been in operation since 2008 and comprises five 49 metre high turbines with a total rated generating capacity of 6.5 MW. What is unusual about the project is the type of ownership in place, one that is based on a co-operative model comprising just under 2,500 members, many of whom live in the local area.
To enable as many locals as possible to participate, the minimum level of investment required to buy into the scheme was set at £245, with taxpayers able to claim back 20% tax under the Government’s Enterprise Investment Scheme. The share issue raised £4.6 million and members earn an annual interest payment from the profits. Additional funding was provided by a bank loan.
A second co-op was established to expand activities on the farm with the installation of a solar farm in 2012, which is believed to be one of the largest community-owned solar farms in the world. With a generating capacity of 4.8 GWhr/year, the Westmill Solar Park contains 20,000 photovoltaic panels spread over 30 acres of land saving an estimated 2,000 tonnes of CO2 annually. In addition to providing enough electricity to power around 1,400 homes, the grass (which is organically fertilised) provides grazing for sheep.
A noticeable aspect of the solar farm scheme was that it received no objections during the planning application stage, evidence, perhaps, that the experience of the community-owned wind farm had addressed any general concerns.
Community-owned projects continue to make up a very small proportion of the UK’s renewable energy capacity. That may reflect the balance of advantages and disadvantages discussed above. However, the two Westmill projects demonstrate that, in some circumstances, there is appetite for local people to become involved. As Adam Twine, a local farmer who leases the land to the co-op stated “At Westmill, we have seen the benefits of community ownership of distributed renewable energy projects both in terms of enabling consumers who are also owners (and especially those local to the project) to directly engage with both the environmental impacts of energy production and the financial rewards – both of which are important, to differing degrees for each individual.”
This blog was written by Indra Thillainathan, Senior Analyst at the Committee on Climate Change.