Saturday, 3 November 2012
Is co-operative energy the solution to climate change?
With climate change increasingly having a disastrous global impact, growing numbers of local communities are responding by launching their own renewable energy co-operatives in an effort to slash the UK's greenhouse gas emissions.
In fact green energy co-ops are now one of the fastest growing parts of the UK co-operative sector having grown by 24% in the past four years.
"The first co-operatively-owned wind farm opened in Cumbria in 1997," explains Rebecca Willis, co-author of a report into co-operative renewable energy published earlier this year.
"Since then, over 7,000 individual investors have ploughed over £16 million into community-owned wind turbines and other renewable technologies resulting in that there are now over 40 co-operatively-run renewable energy projects across the UK."
Typical of the motivation that lies behind this behind this surge in the numbers of renewable energy co-ops is that demonstrated by Mark Wells, a director of the newly-launched Sheffield Renewables co-op: "When we bring future generations to mind, ignoring the problem of climate change is not an option. So even though climate change is a very big problem, we want to do our bit, and so we chose to work as a community to build a renewable energy scheme."
The co-op aims to build a hydro-electric generator on the river Don which will be the largest community-owned hydro scheme in England providing enough electricity to power 80 homes.
The project is being funded by a share offer which aims to raise £200k and which will pay individual investors up to 3% interest.
"Investing in Sheffield Renewables is about much more than the financial return," cautions Wells. "It's about working together to bring carbon-free local energy to the city with profits going back into more green initiatives. Plus once people become involved with the project they're more likely to think about climate change and start to reduce their own carbon footprint."
Simon Gilhooly who helped launch the Green Energy Nayland project in Suffolk last year agrees that renewable energy projects are a great way to get the issue of climate change onto the agenda: "We've installed a photo-voltaic system onto the roof of local primary school and this has really helped raise awareness of climate change within the school and the wider community."
In the first year of their operation Gilhooly estimates that the school's solar panels has saved around £1,000 in energy bills. The scheme has also generated an income of over £4,000 through the government's feed in tariff resulting in that members who bought shares in the scheme are being paid a healthy level of interest on their investment.
All of the UK's renewable energy co-ops have been funded through share issues that target individual ethically-minded investors.
To help match up would-be investors with renewable energy projects a new website Microgenius has been launched as its founder Emily Mackay explains: "Microgenius is designed to simplify the process for both new renewable energy projects and investors. It has been specially developed to manage the administration of fundraising and to make it possible to reach a much wider range of people with the share offer."
Another source of financial support for new co-ops is from the Co-operative Group. "We have earmarked £1 million to support the establishment of new renewable energy co-operatives through our Co-operative Enterprise Hub," says Paul Monaghan, head of social goals and sustainability at the Co-operative Group. "This provides free business support for new and existing co-operatives."
So what are the key benefits of launching a renewable energy project as a co-op?
"One of the main advantages of co-operative structures is the strong message that the project is done by and for the community and is not imposed from the outside," answers Willis.
This is exactly what the Valley Wind co-op in West Yorkshire has found whilst planning its wind farm in the Colne Valley.
"So far we've had a pretty positive response from the community to our plans," says Chayley Collis, spokesperson for Valley Wind.
"A big part of this is because we're a co-operative and so people feel that the wind farm is going to benefit the community and that it is something that they will be able to invest in."
With opposition to wind farms growing around the country, the local paper in nearby Huddersfield ran a poll about the planned windfarm.
"Over 70% of respondents were in favour which is a fantastic vote for co-operative windfarms," says Collis.
However despite the passion and dedication of the renewable energy co-op community, the sector contributes only a minute amount of energy to the National Grid and scaling up their numbers remains an uphill task.
"If the government put the right policies in place then renewable energy co-op schemes could generate electricity equivalent to three conventional power stations," says Willis.
"Currently though with its jungle of red-tape the market is designed to favour the established large-scale developments which have specialist teams to tackle the mountain of bureaucracy involved in bringing a scheme to market."
One way that co-ops have been able to bypass this bureaucratic-nightmare is to team up with existing windfarm developers.
In Scotland four community co-ops have been launched which now have a small stake in major windfarms that have been built by Falk Renewables, one of Europe's leading renewable energy companies.
"Community groups receive a pro rata per centage of energy production from the windfarm," explains Paul Phare from Energy4All which works to develop renewable energy co-ops.
"It's an opportunity to engage everyone within the community, whether it be through a new playground paid for by the windfarm developer or as individuals who can personally benefit from investing in the wind farm scheme."
One energy co-op which is aiming for the big time is Co-operative Energy, part of the Co-op Group which launched in 2010.
"We aspire to being as big in energy as we are in banking," says Ben Reid from Co-op Energy.
"Most people feel completely disengaged about energy and mistrust their energy supplier. We aim to treat our customers fairly which is the hallmark of the co-operative brand and as with all co-operatives, members would be offered a share of profits," says Reid.
"If the original Rochdale Pioneers were starting up in business in 2011," Reid adds, "then I'm convinced that it's the energy market they would choose."
Written by Simon Birch first published at The Guardian