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Scottish island project cracks financing for community wind power
1 April 2005
The 121 strong population of the Scottish island of Gigha is now powered by the wind following the commissioning of three second-hand wind turbines. The project is Scotland's first grid connected community-owned wind plant. On their first day of operation, Gigha's "dancing ladies," as the Vestas 225 kW machines have become known, generated green electricity for £1000. The turbines come from the repowered Haverigg wind farm in Cumbria, England. "Gigha was the first because up until now nobody had managed to crack the financial nut enabling a community with little money to become a significant local generator," says Alan Hobbett from Gigha Renewable Energy, the community company set up to build and run the facility. The island's solution is to combine grant funding with loan and equity finance secured at commercial rates, he says. The company pays back the loan and buys back the equity within five years. "By year eight, we will have built up a capital re-investment fund sufficient to replace the machines without recourse to further financing." Even allowing for the repayments, the islanders expect the turbines to make a profit of over £75,000 a year from sales of Renewable Obligation Certificates and electricity. "This compares to a community benefit payment of approximately £2000 per annum if the wind farm was privately owned," says Willie McSporran, also from Gigha Renewable Energy.
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