What is Power For?

Early wind power projects were often small-scale and based on cooperative principles where the governance and the benefits were evenly shared. That was somewhat swept aside in the 1990s, Industrial-scale renewable energy needs industrial-scale, efficient, market-based investment, it was argued.  As the climate changes, community ownership may show unexpected strengths.

In April 2012 the Scottish government approved construction of a 370 MW wind farm on the Shetland Islands off the North coast of Scotland. The wind farm will be 50%-owned by people from the community and 50% owned by Scottish utility SSE. Most of the electricity will be exported to consumers on the Scottish mainland.

After capital repayments and operational costs, the wind farm is expected to earn nearly US$50 million each year for the local shareholders.  Over $30 million of those earnings will go to the Shetland Charitable Trust to fund community enterprises, energy efficiency and further renewable energy projects, as well as training courses for local people.

The Shetland project takes community ownership of renewable energy projects in the UK to a new scale. There have already been a number of successes. The Westray community on the nearby Orkney Isles raised around $2.4 million for a single wind turbine. It generates a return of more than $320,000 each year towards community causes.

Clean and shared energy

The early wind industry in Denmark was closely linked to ideas of community ownership. At the end of the 1970s all wind projects were owned by local people, remembers Jane Kruse, former Chair of the Hornstrup Mark Windmill Cooperative in the Thy region of Northern Denmark. Across Denmark, more than 150,000 families invested in community wind turbines. Hornstrup Mark purchased and installed a 200kW wind turbine that generated electricity for 100 families.

“Local people could buy a maximum of 9 shares. Each share entitled you to 1,000 kWh per year. If you wanted more you had to provide documentation to show that you used more than the 9 shares allowed,” says Kruse.

But support for the community cooperative approach was gradually eroded during the 1990s with the connivance of the Danish government. The government wanted to maximize the power output from each potential wind turbine site.

Where before Jane Kruse and her fellow community members negotiated with local farmers to purchase the best wind turbine site, now a central planning authority specified exactly where wind turbines could be erected. The effect, says Kruse, was to increase the purchase prices of those spots on the map by up to 100 times.

At the same time, the restrictions on ownership and the number of shares that could be owned were removed, to allow capital from outside the region to be invested in wind turbines.

Finally, cooperatives could sell their existing wind turbines to private companies who would repower the wind farms. In 2005, Jane Kruse’s cooperative was one of those that took the private money.  Where each household had been restricted to 9,000 kWh, the new system could provide a single private owner with revenues from more than 5 million kWh per year for each wind turbine they owned.

Resentment of the Wind Industry

Resentment is strong. There are around 145 windpower or re-powering protest organizations in a country that has shown such solid support for the transition to renewable energy.

Jane Kruse is a member of one of those protest organizations. She is also an active campaigner on the wind power issue in the Thysted Regional Assembly. The region of 46,000 people produces more than 100% of its electricity needs from wind power and biogas.

Kruse is calling for a return to the promotion and protection of community power projects. “That can be done in different ways,” she says. It could be owned by the municipality. They would also manage it to ensure it functions well. “The other way is to let the local utilities be the operators. The profits go back to the people through green funding for electrical transport, biogas and energy-saving in different buildings.”

Her plan is to return to local planning control and to restrictions on who can invest. “We don’t want people in London to invest in  our energy systems. We can find our own money for it. Therefore, we will also have the profit from it.”

Decentralization creates resilience and security

The benefits of community ownership may be more than just more equal distribution of returns, better community cohesion and fewer objections to wind farms.

The first Australian community wind power project was officially opened at the end of December 2011. Some 1,900 cooperative members raised nearly US$14 million to construct two wind turbines near the city of Melbourne. A further 60 groups across Australia are also starting up community power initiatives.

Ray Ison a Professor of Systems and Sustainability at Monash University in Australia was one of those who attended the official opening of the two wind turbines. He welcomed the development and called for protections to ensure community energy projects are not ruled out due to their small scale. He also wants to see government support for community investors. There had to be recognition that engaging communities in the clean energy transition through community energy projects has a value.

Economies tends to search out the most efficient approach to a particular function – constructing and operating large scale wind farms, for instance. That approach – large scale wind projects funded by large scale international investors, for instance - is allowed to replace all less efficient approaches. It’s the law of the jungle, we are told.

In fact, nature tends to take a different approach. Many plants perform the same function in our ecosystems. Some perform it very efficiently, others less efficiently. That variety pays off in the event of an environmental crisis. While one plant may be exterminated by the change, it is unlikely that all will be. Therefore, it is less likely that the entire ecosystem will collapse.

As Professor Ison wrote in his blog: “Distributed, resilient, networked community enterprises make sense in a climate change world where surprise and breakdown in the face of extremes will be more common.”