Community to reap profits from the wind of change? 

It might not be comparable to the Great Gold Rush of 1848 when 300,000 people descended on California in a bid to make their fortune.

Indeed, it could be just a trickle of money which makes its way into the coffers of the fledgling Great Glen Energy Co-operative, after its launch this weekend.

However, residents living in the Great Glen area, stretching from Inverness to Fort William, are being urged to invest in the new group so they can enjoy a share in the profits of a new wind farm by Loch Ness and potentially use the cash to improve their own communities.

Falck Renewables, owner of the Millennium Wind Farm, near Invermoriston, hopes to have its 16-turbines, each 115-metres high, turning by the end of next month.

For the expected 25 years lifetime of the wind farm the company has also agreed to pay around £80,000 annually, to be shared between the communities of Invergarry, Fort Augustus and Invermoriston.

Nothing new in that, you might think, with perceived “sweeteners” routinely awarded to communities living nearby wind farms by companies eager to get on with local residents.

But what Falck is actively promoting, through the not-for-profit co-ordinators Energy4All, is a co-operative which will allow people to invest in the wind farm and enjoy a share of the profits.

Interested residents can invest a minimum of £250 and a maximum of £20,000, with the co-operative having to raise at least £250,000 for it to proceed.

The maximum it can collect is £1.8million which would let it take a two per cent share in the business.

Paul Phare, Energy4All’s regional development manager, explained the model was based on two wind farm co-operatives established on Skye and Boyndie, Aberdeenshire, last year.

The average investment each person made in these developments was £1,500.

Mr Phare says the Great Glen scheme is the chance for local people to reap some of the rewards of a wind farm instead of the profits leaving the immediate area and even the UK.

“Private wind farm developments will normally mean a few crumbs from the table for the local community,” he said. “Perhaps local contractors will be paid to build short sections of roads leading to the site but most of the profits will go to private investors although companies do offer payments to communities.

“It is a big site and that is why the co-operative is giving priority to people from the Great Glen area to join. Five directors of the co-operative representing the Inverness area, Invermoriston, Fort Augustus, Invergarry and Fort William have been appointed.”

Mr Phare estimated that the co-operative members could expect to receive about 10 per cent of their initial investment back in the first year.

“It is up to the co-operative directors and members what to do with the money,” he stressed. “They could divide it among themselves or what has been done before is for a development trust to be set up, perhaps for something like fuel poverty in the area to be looked at. But every single member of the co-operative who has invested is given one vote, the amount they have invested doesn’t matter.”

Mr Phare said the board directors would suggest to members what to do with the profits, but ultimately the decision comes down to a vote.

“It is completely democratic,” he insisted. “Members tend to be community-minded folk and this is an opportunity to make a return on their investment and see their area benefit.”

But what if a co-operative director representing Fort William proposes the share of profits is awarded to enhance a community there but he or she is opposed by a colleague who has the interests of Inverness, Fort Augustus or Invermoriston uppermost in their mind?

Mr Phare admits conflict within the co-operative is entirely possible but insists the democratic ethos will ultimately hold sway.

“There would potentially be conflict,” he said. “But the whole thing about the co-operative is it is far more democratic and fair than private investment. If people have invested more money it doesn’t mean they necessarily have better judgement than somebody who has put in £250. That is the co-operative culture and its all explicit and explained in the literature.”

However, Graham Strachan, the co-operative board director for the Inverness area, has a different perspective from Mr Phare on how the money could be used.

He believes it presents the opportunity for the profits to be enjoyed by local people individually and as a tool for promoting green energy to children.

“Traditionally, the profits go to the private companies behind wind farms,” he said. “But the co-operative is a way of saying to the local community ‘come and take a small stake and share in the profits’. I’ve had enquiries from Germany and Ireland about the share launch but we want to ensure local people get the first opportunity to become involved. It’s about asking the community to consider how they might want to get involved with the windfarm and renewables.”

He said it would be inappropriate for him to offer financial or investment advice to interested residents.

But Strachan, who lives in Beauly, would like to see some of the potential co-operative money used for educating children.

“I believe the secondary objective from the co-operative is to educate young people in the Great Glen area about renewable energy thought trips to the wind farm,” he said.

“Perhaps we could get them to hug a wind farm! We are very positive about wind farms because it is a green energy source.

“They are being built throughout the world and countries like Denmark and Germany are much more advanced than we are in educating young people. They are up there with fish farms and wind pylons because some people like them and some people don’t.”

Mr Strachan admitted the size of the co-operative catchment area could prove challenging but was optimistic there would be a collective will amongst members once its AGM was held.

More than 370 people have so far registered an interest in receiving a prospectus about the co-operative.

Out in Strathdearn and Strathnairn, near Inverness, the communities are already sharing in their windfall from npower renewables’ £70million Farr Wind Farm, but through a more traditional agreement of shared profits.

The 40 turbines received consent from the Scottish Executive in October 2004 and the two neighbouring communities are due to receive a payment £105,000 each year and have already received a one-off payment of £1 million to promote local projects of an environmental, educational or charitable nature.

Inverness South councillor Roy Pedersen, played an integral role in setting up island co-operatives when he worked for the Highlands and Islands Enterprise and its forerunner the Highlands and Islands Development Board.

The SNP councillor helped establish a number of co-operatives in his 30 years of employment with the enterprise agency and believes it is a model which has proved successful in the Highlands.

“I don’t have any direct knowledge in the Great Glen project,” he said. “In my previous working life I was involved in setting up co-operatives in the Western Isles and Northern Isles from about 1977 onwards. On remote islands we offered advice, training and money in setting up projects like village shops.”

Councillor Pedersen said the “multi-functional” co-operative on Papa Westray, Orkney, was an excellent example of what could be achieved with a fuel station, guest house, youth hostel and agricultural stores still trading.

“If the co-op has a common purpose then, generally speaking, it should be possible to come up with an equitable benefit,” he said.

“It is a very democratic system in certain circumstances but there are some communities which have different levels of cohesion and almost all of them will have different factions.

“Regardless of the investment there is a limited return of capital for the investor. The idea is for the community to take over ownership.”

Island co-operatives offered full ownership to the community which drove the project and can that really be measured against a small percentage in a wind farm owned by a international power company?

Until the turbines start turning at the end of July and the profits are posted after the end of the first 12 months, it is difficult to tell.

Perhaps the residents in the Great Glen scheme feel “there is gold in them thar hills” and are hoping for a very windy, very profitable 25 years.

By Hugh Ross

The Inverness Courier

17 June 2008