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United Kingdom

United Kingdom

Model for citizen development -- Over 100 projects in the works

British farmers and landowners are being offered a simpler route to developing small wind projects under an initiative launched by wind project developer National Wind Power (NWP). Its WindWorks plan provides a one-stop-shop for small projects -- typically of one, two or three turbines -- helping farmers and landowners develop a low risk income stream from wind by providing the project equity.

WindWorks hopes to encourage the spread of small projects in which local citizens have an interest, a market model which has formed the backbone of wind development in Denmark -- the world's leaders in wind energy, says NWP's Alan Moore. "If we can replicate the success that small wind projects have had in Denmark and elsewhere, it will greatly help in meeting the UK's renewables targets," he says. "WindWorks will unlock the potential of small wind projects in a financially attractive, cost effective way." Unlike the NWP approach, however -- in which NWP owns the turbines -- citizens in Denmark own their own projects.

Energy minister Brian Wilson indicated a keen interest in WindWorks and launching the initiative last month. "This scheme offers a great opportunity for small scale involvement in the generation of electricity from wind power. Many farmers will look with interest at the chance to create another revenue source while contributing to the drive for green energy," he said on launch day last month.

WindWorks has the backing of farmers' representatives and countryside groups. Peredur Hughes from the National Farmers Union Wales says: "This is an excellent opportunity for farmers to diversify and increase their incomes, particularly in the light of the recent farming crisis that has led to an average farmer's income dropping to just £4100 last year."

Reward without risk

According to NWP the new package provides farmers and landowners with the financial rewards associated with ownership of a wind energy project while avoiding their exposure to new financial risks at a time when great uncertainty exists in the rural economy.

NWP says it will provide a supporting role throughout the development of a project. It will give guidance on how to prepare and take forward a planning application for a small wind project and undertake the supporting assessments of environmental effects. But the farmer or landowner is expected to be the "project champion," opening a dialogue with councillors, planners and the public and seeing the project through the planning system.

When siting consent has been granted, NWP will manage arrangements for grid connection, the financing and purchasing of the wind turbines, and construction of the wind project. Throughout the project's operational life, NWP will operate and maintain it and eventually be responsible for decommissioning and reinstating the site.

When projects are up and running, the landowner will initially receive around 2% of the gross revenue, but after the project debt is repaid, his income from the project will increment significantly as if he were the project's co-owner, says Peter Musgrove from NWP. This arrangement avoids the problems caused by the high cost of financing small wind energy projects. He explains that NWP had originally hoped to develop the WindWorks scheme as a co-ownership deal between the company and the landowner. But the £2 million cost of a typical small project is an awkward project sum to finance, he says. "What we are doing instead is to give the landowner a payment stream designed to reflect co-ownership," says Musgrove.

Fifteen projects are currently being taken forward under the WindWorks scheme. "And we are getting a large volume of enquiries," adds Musgrove. "We would anticipate that over the next year we might take through planning upwards of 100 projects."

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