United States

United States

Community wind: Where community wind began

US: The roots of the pioneering German wind industry lie in the northern state of Schleswig-Holstein, spun off from Danish wind energy enthusiasts over the border who sowed the seeds of the new industry in the 1980s. As with the Danes, it was people power that pushed developments forward, overriding the naysaying of monopoly energy companies.

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On the east and west coasts of Schleswig-Holstein, farmers, citizen groups and individuals embraced the concept of wind energy with enthusiasm. Politicians noticed wind could bring jobs to localities. Meantime, communities could benefit from local taxation on wind plants' profits. Leaders also saw that wind development could help stem a population exodus from the area, once reliant on farming and shipbuilding.

Community wind in the form of burgerwindparks - people's wind stations - is now widespread in parts of Schleswig-Holstein. In rural Nordfriesland, it accounts for 95% of the district's 600MW of wind capacity. "It is simply understood and accepted in Nordfriesland that only people living in a particular parish can build wind stations in that parish," says wind developer Henning Holst, who lives in Husum, Nordfriesland. The plant thus remains under the control of the local community. While this is not the case in all Schleswig-Holstein districts, Holst believes the concept is spreading and that community wind principles are part of the government's state planning.

Municipalities throughout Schleswig-Holstein are prioritising new development by only recommending areas on the understanding that they will be used as burgerwindparks. Almost all of those in Nordfriesland will be for the exclusive use of burgerwindparks, Holst estimates. In districts where developers have acquired rights to build plants for possible sale to institutional investors, parishes are appealing to landowners to insist that ownership remains local. Areas earmarked for wind are expected to become virtually immune to potential legal challenges.

Cultural icon

In Germany, community wind has become something of a cultural icon. The word burgerwindpark itself is widely associated with the concepts of social responsibility and civic activism. "One should only use this term if people from all walks of life are given a realistic opportunity to participate financially and actively in these sort of projects," says Werner Frohwitter of Energiequelle, one of Germany's largest wind and renewable energy developers. The term should not be applied to financing packages with only minimal investment by local individuals, he says.

But the meaning of burgerwindpark has changed over time, says Ulf Gerder, a spokesman for federal wind energy association Bundeseverband Windenergie. In the 1990s, wind power investment funds allowed individual ownership partners. Individual investors often lived in the same area as the wind farms. But a 1995 change in law abolished the tax incentives. New finance structures changed the nature of investments, making them more complex and less attractive to individuals. Either way, Gerder reckons that of Germany's roughly 25GW of wind capacity, around 75% of the finance has been arranged by medium-sized wind developers, turbine manufacturers and others - often with many individual investors. Only around 10% comes from Germany's four major energy companies - RWE, Vattenfall, EnBW and E.on - and regional company EWE. Institutional investors have raised another 10% and municipally owned utilities are the source of about 5%.

Hearts and minds

Local acceptance of wind power is critical to its expansion, say proponents of German community wind. Energiequelle agrees and has changed its approach accordingly. When municipalities earmark new areas for wind developments, Energiequelle aims to immediately sign up rent contracts with all landowners in areas prioritised for wind. Not all of these will end up with turbines installed, but all will receive annual payments proportional to wind power related activity on their property. Payments are small when no activity occurs but rise with, say, the construction of roads or cable routes to the sites and go higher yet to reward erection of turbines themselves. The company hopes this approach will stimulate local adoption of wind power by giving landowners shared economic objectives. "It is vital that parishes are not split over the issue of wind energy," says Frohwitter.

Even citizens outside priority wind zones benefit indirectly from local wind stations, via trade taxes flowing into municipality coffers. The tax is levied on business profits by local authorities, charged at varying rates depending on municipal policy. Countrywide, it averages around 14%.

In recent years, awareness of climate issues has sparked a new form of community wind in which municipal energy utilities, often entirely owned by the local town, buy up wind stations to reduce their carbon footprints. European Union CO2 emissions-trading rules require energy companies to buy all their CO2 certificate allocation at auction from 2013. This prospect is helping drive Germany's 500 municipal electricity utilities to invest in wind.

But in this kind of citizen-owned wind, communities are often far away from the generation capacity they own. In one much-watched deal in December, wind developer WPD sold nine wind stations in the eastern German state of Brandenburg, combined capacity of 163MW, to three municipal utilities in western Germany. Utility Stadtwerke Munchen, which took a 75% share, had earlier in the year bought five wind stations totalling 50MW from WPD. Despite weak ties to the community hosting the wind, the deals were key components of a strategy of increasing use of renewable energy while gaining independence from "the current oligopoly of energy producers", says HEAG Sudhessische Energie, a municipal utility in the western industrial town of Darmstadt that took a minority stake. It was referring to utility giants E.on, RWE, EnBW and Vattenfall Europe, which account for around 80% of electricity generation in Germany.

Community wind power has made forays into offshore, but with varying success. Project developer Butendiek Burgerwindpark in 2001 invited individuals to invest in a 388MW offshore wind station west of the island of Sylt. Nearly 8500 individuals bought up a total of 20,000 stakes, raising EUR5 million. A construction permit was granted in 2002. But project implementation was too big and complex, and the enterprise was sold in 2007 to Airtricity, which was later acquired by Scottish and Southern Energy.

The size and risk of offshore wind investments appear to make municipal utility involvement the only viable form of community involvement. Stadtwerke Munchen and HSE Darmstadt have each taken 24.9% stakes in the Global Tech 1 offshore project, and German energy company Trianel has acquired the 400MW Borkum West 2 offshore project. But while Stadtwerke and HSE are both owned by cities, Trianel may not meet the definition of community wind so easily. The company is owned by 44 municipal utilities and would hardly generate a community feeling with the average German citizen. Even so, it is evident that people continue to explore new ways to get involved in wind.

For more see 'Policy boost for citizen-owned projects'

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