THE CROFTER - Scottish Crofting Federation

12
An outline by Nickie May
U
nsurprisingly,
renewable energy in
Orkney equals wind, with
Orkney possessing one of the best
wind resources within the UK.
The topography of Orkney
makes for clean wind – a
relatively open landscape
ensures less turbulence
and more harvestable wind.
Harvesting the wind in Orkney
began in the 1980s and there
are several small-scale (c 5
turbines) commercial wind farms
which have been in existence
for a number of years. More
recently domestic wind turbines
have started to appear – there
are two here on Shapinsay –
and even more recently, six of
the smaller Orkney islands are
rolling out community-owned
wind turbine projects.
Before moving on to the
community-owned wind turbine
projects I would just like to offer
a few details of one of the small
turbines here on the island, as it
was actually a successful SRDP
application. One of the farms has
diversified into small-scale jam
and preserves manufacture. A
6 kW turbine now supplies the
electricity to the converted bothy
– an ABDS/marketing grant –
where the jam is produced.
Communities can benefit
from a wind turbine in their
midst in a number of ways. It is
standard practice for commercial
developments to offer £10-20,000
to an appropriate community
organisation to distribute to
suitable causes within that
community. The island of Sanday
has a similar arrangement with
Scottish and Southern Electricity
(SSE) who have a commercial
renewable energy
Wind power possibilities
development on that island.
There are plans for the Sanday
Development Trust and SSE
to have joint ownership over a
new turbine being added to the
site. The form of community
ownership currently evolving
here on the smaller islands
is where the developer is the
island development trust, run by
democratically elected members
of the island community.
Another alternative as to how
a community of individuals can
benefit from a turbine development
is the co-operative model. Either
a handful of folk get together to
invest – one of the turbines here
on mainland Orkney, described as
a community-owned wind turbine
is such an arrangement – or there
are larger scale co-operatives as
pulled together by Energy4All.
Basically the plans are to
install a 900 kW turbine which,
on some of the islands, will
create an annual income for
the community’s use of approx
£100,000 for the next 20 years.
Indeed, this dream has become
a reality for Westray with the
trust on that island installing its
turbine last autumn; Tiree, in the
west, is at a similar stage. The
recently-announced feed-in tariff
rates make these projects look
even more attractive although
community projects of this type
do look for grant funding where
possible and the interaction
between the tariffs and grants
has yet to be clarified.
Before you all get enthusiastic
and start clamouring for one, here
come the health warnings. The
projects are vastly complicated,
consume inordinate amounts of
time and can create an awful lot of
conflict within a small community.
Look seriously at the capacity
within the community. Are there
enough folk with relevant skills
with the time to throw at the
project or with the time and the
willingness to be outwith their
comfort zones to acquire the
skills? It’s essential to establish
that the community does indeed
support such a project. A postal
vote of the entire community,
independently verified, is the
most transparent way to go about
this. Getting a clear mandate from
the community can seriously help
smooth the path of the project.
A brief run through the
challenges these projects face.
Find a wind turbine manufacturer
willing to supply to your area – it
took Westray two years. Find a
suitable site; close to three phase
electricity and 10 times the blade
diameter from the nearest house
and be mindful of any resident
bird populations. Planning:
expensive, as an environmental
impact assessment (a weighty
tome) is required and two-stage
projects receiving local approval
then have to go to the Scottish
government. Watch out for the
conditions attached. Negotiate
with the department who told
planning to put the condition in if
it is likely to be onerous for the
project to comply with it.
Securing agreements over
the land and access to the site
– lease or freehold? If leasehold,
watch how the rental payments
are defined, compare them to
the cash flow predictions and
see if the formula comes up
with the sort of money you are
expecting to pay. Make sure that
the leases are for longer than 20
years and that there is no ability
for the developer to end or break
THE CROFTER, MAY 2010
the lease if commercial finance
is needed for the project. Grid
connection: discuss capacity on
the grid in your area, although
SSE would not confirm the
capacity that is actually available
until they made the offer of a grid
connection. Restricted capacity
equals restricted earnings. With
all these things, establish likely
timescales for delivery and
payment dates etc but remember
that milestones in these projects
are incredibly fluid.
Now the really scary stuff.
These projects face a complex
interaction of company, charity
and tax law so it is essential
that the community group is
protected by limited liability – the
general legal format is that it is a
company limited by guarantee or
a community interest company.
Check that the objects clauses
within the memorandum and
articles of association for the
company (its constitution) allow
the group to run a turbine. If
the group has charitable status
then it is not allowed to run a
commercial business and must
set up another company (a trading
subsidiary) to run the turbine
business to make sure that the
charity is isolated from the risk
associated with the business
of running a turbine. Take out
directors’ personal liability cover
as there are situations in which
the protection given by the
limited liability status can be lifted
and the directors face personal
liability. And then when you have
done all that, go and negotiate a
commercial bank loan for ooh at
least a cool £1 million, depending
on the capital costs of the project
and the amount of grant secured.
Good luck!
Skye Renewables Co-operative Ltd
Chairman Donald MacGregor
reports
T
he 572 members who
subscribed for shares in
Skye Renewables Cooperative
Ltd in December
2007 became shareholders in
the Ben Aketil wind farm – the
first commercial wind farm on
the Isle of Skye.
The landowners, MacLeod
Estates and the tenants, Feorlig
crofting township, granted
permission for the construction
and operation of the Ben Aketil
wind farm to a subsidiary of
Falck Renewables. Planning
permission was obtained on 7th
September 2006.
The wind farm consists of
10 x 23MW Enercon turbines.
Planning permission has now
been granted to extend the
site by a further 2 x 23MW
Enercon turbines.
The site has now been
operational for two full years and,
apart from the satisfactory return
being achieved by members of the
co-op, a substantial community
benefit fund is also administered
by Dunvegan Community Trust.