New model for ownership

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The renewable energy agency of the inland state of Hessen in Germany has set up what appears to be one of the most complicated financing arrangements yet for harnessing wind energy. The scheme concerns a project to be owned by the town of Ulrichstein, which will be financed in such a way that it costs the town virtually nothing.

HessenEnergie agency was set up to promote renewables and energy saving. It has now developed a contracting model for the proposed Ulrichstein wind plant aimed at favourable financing at minimum risk. In short, the agency will install the wind turbines and operate and maintain them for the town for a period of 12 years. During this time the turbines will pay for themselves with income from the sale of the electricity generated.

Of the initial investment, Ulrichstein will contribute only DEM 1.55 million from a grant made available by the Hessen government. The rest will be provided by HessenEnergie, financed by transferring the receivables -- or the right to income -- from the electricity sales to the Commerzbank. This financing model was developed with the Commerzbank along the lines of a procedure known as "factoring," often used in financing public projects. During the 12 year period covered by the project contract, Ulrichstein and HessenEnergie will share any profits. HessenEnergie will use its 25% share to cover the risks of the project, such as low winds or technical problems. Once the 12 years are up and the wind station paid for, it becomes the property of Ulrichstein.

The turbines will be sited at Ober-Seibertenrod in the Vogelsberg hills. They will feed power into the grid of regional utility OVAG once it has built its long planned transformer station in Ulrichstein, reports HessenEnergie.

The Ulrichstein project will be the first entirely communally owned wind station in Germany. Under the motto "It's easy once you know how," the agency is encouraging other parishes and municipalities with suitable sites in the Mittelgebirge hills to follow suit.

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