Community Energy. Why bother. A landowners perspective

Community group having a look-see at a 600kw hydro. (Garnedd hydro thanks to RWE)

Last thursday in Birmingham i was invited to present in a workshop hosted by the Centre for Sustainable Energy. My task was to give a land owners perspective on community renewable energy scheme. Why would you bother brining in a partner and more complicated a whole community in to run what could be a very expensive but very profitable business or joint venture? In terms of renewables I have found that the funding and technology are fairly straightforward if you have the much rarer thing which is a site.

Why bother?

We all know that it feels like the right thing to do in terms of equity and helping. But in the cold light of commercial day it also has many benefits that going alone does not. I split my benefits into hard and soft outcomes

Hard

  • Working with a community or leasing to a community can make the planning permission much simpler especially in the light of localism (but it has to be a true partnership and not a vehicle of convenience as I have seen some developers offer – sort of the loose change from large projects) simply put – without the community it might not happen
  • Most large renewables and especially wind and hydro have a very risky first phase. this is the development to planning permission which can involve a lot of risk money. finding a rare something during the development stage can stop a project in its tracks. Communities can access grant monies much easier for this aspect (but beware the dreaded ‘state aid interpretation’ which can mean no FIT or RHi)
  • Recent development with our energy supplier the co-operative has also highlighted an added financial value aspect which is trading the energy to the community (energy sleeving)

Soft

  • Reputation enhancement
  • Multiplier. for example working on the Anafon hydro has resulted in more communities approaching us to discuss further commercial partnerships
  • Working on one project is proving beneficial on other aspects of our work.  old disputes, other non energy projects can become easier

    learning from others is key to successful community renewables

Aspects which are proving challenging for the National Trust and probably most other charities. Working on the Anafon hydro with the community has been invaluable in highlighting tax and legal implication of a charity commercially partnering with a community.

  1. Section 36 of the charity act is there is ensure a charity always receives fair and reasonable terms for the use of its assets eg land leasing. this means that we can be hampered working with a community because benefit i am afraid is currently is only measured by the charity commission in monetary terms. Therefore the community theoretically is matched against a commercial company when it comes to using a charities assets. Not right but could not have been envisaged when the act came out. (perversely its easier for a commercial company to work with a community than a charity!)
  2. Trading energy – the charity can not sell the energy produced on its properties because this would be trading and have very large tax implications. Even through we also purchase millions of pounds of energy. Common sense would say that you should be able to offset your generation against your consumption but not at the moment. We have to use our trading arm National Trust Enterprise but it too has to adhere to Section 36 as well!
  3. The articles of a charity – why has the charity been set up and if like the National Trust your focus is about ‘properties’ then you have to be very clear when you go outside this ownership boundary. Not insurmountable but takes a bit of explaining in terms of why would you work with a community several miles away from your property?

This is all new (for everybody i think) and its encouraging that this work is also bringing in a  lot of pro-bono support to help us tackle these ‘issues’ or should i say establish solutions for others to borrow. If it was simple then it would not be fun! (mind you 6 solicitors on a telephone conference for 5 hours figuring out a contract on renewables does stretch the term fun!) work in progress and more ‘implications’ to find and deal with

Thanks again to CSE for getting us thinking further!

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