United Kingdom

United Kingdom

AN ALTERNATIVE APPROACH

A new report concludes there are no obvious legal blocks or planning problems hindering community wind development in Britain. But it seems odd that after nearly five years of commercial wind energy development not a single wind scheme can boast the involvement of its local people. This is in stark contrast to the European continent. In the UK, however, the Non Fossil Fuel Obligation makes private investment in wind power a risky business. Alternative ideas suiting the British culture might be groupings of small projects under the sponsorship of a large wind park developer who would construct wind schemes but introduce a vehicle for local funding.

After nearly five years of commercial wind energy development in Britain not a single wind scheme can boast the involvement of its local people. On the contrary, as big business had descended upon the countryside with large wind farms, local people have been divorced from being allowed to help themselves. What is worse, communities which would have gladly participated in putting up their own wind plants, have been put off the whole idea of wind generated electricity.

This is in stark contrast to the European continent where from their own property thousands of people smile benignly on wind turbines in which they have a financial stake. Most of them are founders of wind development co-operatives in which they have pooled their resources in the knowledge that by owning a stake in a wind turbine, electricity bills could be fast-frozen for many years to come because wind would supply their electricity while they paid off the capital loan. If the wind plant outlived the loan, not only would it continue to provide them with pollution free power, but do so free of charge.

Now a report by Ray Mitchell of Rubicon Link in the UK has concluded that there are no obvious legal blocks or planning problems in the way of community wind development in Britain. Moreover the report -- paid for by the government's Energy Technology Support Unit (ETSU) -- finds evidence that it would be in the interests of the renewable energy industry as a whole to give a clear commitment to getting local people involved. Community schemes can contribute to positive public perception of renewable energy.

On closer investigation, however, proponents of community involvement have found a major obstacle lies in the very support mechanism that has kick-started British wind energy into being. It appears that the Non-Fossil Fuel Obligation (NFFO) must bear some of the blame for the lack of progress of even the most modest amount of community ownership. According to Garry Jenkins of North Energy Associates this is because the high risks associated with bidding for NFFO contracts are an impediment to community led initiatives. And the early stages of the NFFO process before contracts are awarded are the most uncertain.

Jenkins, who heads the British Wind Energy Association's community ownership committee, points out that in Denmark and Sweden, where community involvement in wind energy projects flourishes, the application and sign-up processes for financial support are simpler and more clear-cut. Under present NFFO arrangements, applying for a contract is a lengthy process and the uncertainty of whether a bid is sufficiently competitive to win a contract persists up to the government announcement of which schemes have been successful. No concessions are made to ease community wind projects through the uncertainty of this process..

"Community participants want to have a low risk, low return investment, but because of the NFFO you cannot simply sign up for a contract as you can in Denmark and Sweden," says Jenkins. "NFFO is a much riskier process because of the uncertainty at the front end. That is why there are so very few grass roots initiatives," he adds.

Jenkins believes the large scale of many wind energy developments kick-started by NFFO is inappropriate for a small densely populated country like Britain. "It has encouraged the American system of large wind schemes, but we are European. We need a different approach..

In contrast to the BWEA's finding, the Rubicon Link report claims that the NFFO bidding and pricing system does not preclude community involvement in renewables. The report does however criticise -- albeit somewhat gently -- the time taken up by NFFO bidding and the uncertainty of the procedure. Although it believes no major structural changes to the legislation are needed, it nevertheless goes on to recommend a fixed purchase price for electricity from renewable schemes developed by local communities. This could be set at the level of the highest contracted price under NFFO-3, thus allowing community projects to opt out of the bidding process and remove much of the development risk. Rubicon Link may regard this as a "small adjustment" to the NFFO process, but it would require an about-turn in government thinking. The government seems wedded to its course of awarding contracts on a strictly competitive basis.

While the BWEA intends to lobby the Department of Trade and Industry (DTI) to give some special consideration to community schemes, Jenkins is pessimistic about the likelihood of NFFO-4 being less of a "competitive gamble" for community wind. "I do not really think we are going to get fundamental changes to NFFO. The government has already decided what it is going to do for the next round and it is going to be much the same as before. What we need is a more controlled price for renewable generated electricity. With the government's commitment to free market economic that is very unlikely."

For this reason the BWEA's community ownership committee, an organisation not yet noted for its dynamism, is also investigating other ways to overcome the NFFO obstruction. "One of the things we have to look at is the possibility of setting up a seed fund to raise money to help communities get schemes off the ground and through that particular stage," explains Jenkins.

Others are approaching the community involvement issue from an entirely different angle. Robert Tudway from lawyers Nabarro Nathanson says that NFFO is potentially an impediment, but other more pressing problems need to be resolved before community owned wind schemes can really take off. With the City University and another firm of solicitors, Waltons and Morse, his company is engaged on a European Union Altener project to look at the barriers to community involvement.

One of these barriers is cultural, he believes. Unlike some other European nations, the British are slow to mobilise themselves into groups to develop projects. To overcome this he favours grouping several small projects together under the sponsorship of a large wind farm developer who would design, construct and operate wind schemes and then introduce a vehicle for local funding. In this way a number of projects could be developed as a single entity. "It would spread costs, make raising finance easier and introduce economies of scale," he says. If the study finds this route to be feasible it will then look at the NFFO implications. "I certainly agree that there are difficulties with NFFO. But we need to discover the best practical ways of taking community wind schemes forward first of all -- and then address NFFO's shortcomings. Otherwise it is a case of putting the cart before the horse..

At present developer-led projects would seem to offer the best opportunity to get community ownership off the starting blocks. And at last there are sings of few moves in this direction. The Wind Company -- a British offshoot of Sweden's Vindkompaniet -- has brought its parent company's methods of realising community projects over to the UK (Windpower Monthly, April 1995). In Sweden Vindkompaniet takes all development risks itself and sells the project to the community when commissioned. Now in Britain, having got planning permission and a NFFO contract for its scheme at Harlock Hill in Cumbria, The Wind Company is on course to realise the country's first community owned wind cluster. In addition, Britain's Wind Fund (Windpower Monthly, May 1995) has disclosed that it has negotiated to invest in four NFFO-3 projects.

These are small beginnings but Jenkins claims that greater hopes are pinned on finding a market for energy from community wind schemes when electricity supply is opened to full competition in 1998. Then the Regional Electricity Companies will no longer have their franchise monopoly of domestic consumers. "After market liberalisation, 22 million electricity consumers will be able to choose their electricity supplier. Some people will want to buy their electricity from clean sources so we as a committee are looking at how we should take advantage of that," he says.

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