With annual returns of 10 percent coupled with low risk, wind farm cooperatives are drawing growing numbers of investors in Britain — good news for Europe’s hopes to lead the world in renewable energy.
Along with being a safe investment during turbulent economic times, the cooperatives are drawing interest from those concerned not just with global warming and climate change, but also with energy security.
“It’s not only a climate issue, but it’s also a problem with energy supplies,” Clive Burke, a shareholder in the Westmill cooperative near Swindon, southwest England, told AFP.
“We are exceeding the ability of our planet to support our energy needs.”
European Union (EU) leaders last week agreed a landmark package to slash greenhouse gas emissions by 20 percent by 2020, make 20 percent energy savings and bring renewable energy sources up to 20 percent of total energy use.
The EU accord gave a boost to efforts to agree an historic new climate treaty in Copenhagen next December, to succeed the Kyoto Protocol’s provisions when they run out in 2012.
Those lofty ambitions begin on the ground: Burke, who works as an electrical engineer at a nearby power station, is one of 2,500 people who invested between 250 and 20,000 pounds, the legal maximum, in Westmill.
The cooperative, which began production in March, is the first wind farm to be wholly owned by individuals in Britain, which with gales sweeping in from the Atlantic has the best wind resources in Europe.
“We have produced energy every day since then,” Adam Twine, a farmer who started the project 15 years ago on his plot of land by installing five wind turbines 49 metres (160 feet) in height.
Overall, the project cost eight million pounds (8.9 million euros, 11.9 million dollars), nearly 60 percent of which came from individual shareholders, with the remainder being funded by a bank loan that is to be repaid over the next eight to 10 years.
CO2 emissions resulting from the production, installation and the lifetime of the turbine, which stretches 25 years, will be offset in just six months.
The turbines, which were installed by industrial giant Siemens and are maintained and operated remotely from Germany, produce sufficient power for 2,500 homes via the national power grid.
It’s there — through the sale of electricity — that the cooperative has been making back its investment.
When they first began appearing in Britain, wind farm cooperatives returned an average of six percent annually, but recent increases in the price of energy have spiked that up to 10 percent — 12.5 percent at Westmill — and that’s the average return over 25 years, factoring in loan repayments but excluding tax incentives.
“And it’s not finished,” Burke noted, adding that cooperatives like Westmill have the added advantage of not tapping into already-strained government finances.
That opinion is backed by the British Wind Energy Association (BWEA), with spokesman Nick Medic noting: “The investment is not only financial, it’s also emotional.”
He added: “Community funded projects play an important role because they take a bit of the burden off the government, offer a financial return higher than most savings accounts and give communities a sense of ownership which is psychologically important.”
Many wind farms ensure they are driven by local communities, with cooperatives encouraging local investment — more than half of Westmill’s investors, for example, live within a 30-kilometre (20-mile) perimeter.
“It’s not a big company that planted a wind farm in the middle of our community,” Burke said.
“It’s actually ours, we own it”.
Large companies have, in recent months, tried to encourage local community involvement in their projects — Falck Renewables, a subsidiary of Italian group Falck, gave locals an opportunity to invest in its wind farms in Scotland.
They decided to form cooperatives, one of which raised five times as much as was initially requested.
The first cooperative wind farm was set up in Britain in 1997. Currently there are seven wind farm cooperatives in Britain with a total of 5,500 investors.
In 2007, five percent of the total energy consumed in Britain was produced through renewable sources.
Last year, wind farms contributed around two percent of Britain’s total energy production — eight gigawatts — leapfrogging hydropower for the first time.
Britain also overtook Denmark last year to become Europe’s premier producer of offshore wind energy.
According to the BWEA, British wind farms by themselves could produce 30 gigawatts of energy by 2020, with wind farms currently in development representing a potential additional supply of 20 gigawatts — sufficient to power 11 million homes.
“Wind is a relatively solid place to put your money. Demand (in energy) is going up, supplies are looking increasingly uncertain.
“We have an unlimited supply of wind.”