Wind bank opens to Swedish co-operatives

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A local utility has created a new and innovative model for co-operative ownership of wind turbines that is expected to at least double the number of members of wind plant co-ops in Sweden and inject a great deal of capital into new development.

Falkenberg Energi, which has inaugurated a wind farm of ten Vestas 660 kW turbines on Sweden's west coast (Windpower Monthly, February 1999), has taken advantage of the deregulation of Sweden's electricity market to set up a "wind bank" for co-operatives. Ordinarily, a company or association that sells power to customers must take "balance of responsibility," a guarantee to deliver to full demand at any given moment along with economic responsibility to pay for extra power when consumption is greater than production. Today most wind co-operatives avoid this responsibility, selling their power to a local utility; their members then buy back power from the utility at the ordinary price-about SEK 0.45-0.50/kWh (EUR 0.05-0.06/kWh). Any surplus of funds, including revenues from VAT and energy tax returns, is distributed among the members once or twice a year.

Falkenberg Energi created a different model when two of its wind turbines were taken over by a co-operative. The utility agreed to take the "balance of responsibility" on behalf of the association, allowing the co-operative to sell the power directly to its members at a competitive price. Falkenberg co-op members only pay SEK 0.225/kWh, but they must invest SEK 4000 in the wind bank for every 1000 kWh they use each year. Members can at any time and at short notice take their shares out of the bank.

Attracting investment

Since the market was deregulated in Sweden two years ago, power prices have dropped to an all time low, making it difficult for wind power to compete. Thus, seen from a wind developer's perspective, the wind bank model can increase private investment interest in wind power, giving consumers a chance to buy electricity at half the market price.

So far, Falkenberg Energi has used the wind bank model within its own distribution area. Co-operative members living in other districts have had to install a special metre, at a cost of SEK 2500 (EUR 290). From November this will no longer be necessary as the market deregulation law is being extended to include ordinary households. With this new opportunity in sight, Falkenberg Energi plans to start a new nationwide wind power association for co-operatives.

The company says it will recruit members from around Sweden, install new turbines as membership and available capital grow, and offer existing and new co-operatives in Sweden to join this umbrella association, where Falkenberg Energi will take the "balance of responsibility" on the behalf of the co-ops.

Local wind power co-operatives in Sweden have more than 10,000 members, who together have invested some SEK 160 million in wind turbines. One industry observer expects the Falkenberg model to at least double the number members within a year or two, with all the associated investment capital such growth will bring.

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