Bro Dyfi Community Renewables came about through the shared interest of local people in and around the town of Machynlleth in mid Wales in creating a local renewable energy ownership scheme. Supported by grant funding, ethical investors and some very committed individuals BDCR has delivered two projects that are a direct community response to climate change.
And the bonus on top of carbon free and renewable generation in the locality is that we as a community can also benefit from its financial returns, both as individual investors and through the contribution annually to local regeneration organisation ecodyfi. To find out more about who and how we did it please read on.
Why we did it?
Because as a community we care. We care about the environment, we care about people, and we care about our lives now and in the future. BDCR is a direct product of a local community’s collective will to help the planet, mankind and our community.
The Dyfi Valley has burgeoned with green ideas and initiatives in the past three decades as environmental issues have come to the fore. The original idea for a community wind turbine came from a local resident in 2000 who at that time was a voluntary Director of the Baywind Energy Co-op and had professional experience of developing wind energy. She worked for the Machynlleth-based renewable energy company Dulas Ltd but wanted the community itself to develop and own a scheme.
The prospect was received enthusiastically by the Centre for Alternative Technology (CAT), who at that time would potentially consume the power from the wind turbne such that an innovative demonstration of renewable energy development would provide demonstration and education benefits to its visitors while securing a renewable electricity supply.
Advice on process and potential grant aid was provided from the beginning by two professionals living locally: one employed by the local community regeneration group (ecodyfi) and the other by the local Powys Energy Agency (now part of SWEA). The former was running an EC-funded umbrella project to stimulate community-based renewable energy schemes.
These people met with two other interested local individuals to work out what might be possible and how to move a potential scheme forward, including holding a first public meeting in Pantperthog Village Hall. The rest, they say is history … as we explain below.
How we did it?
- Provision of a community “vehicle” to take responsibility for the project and drive it forward
An unincorporated association called The Dulas Valley Community Wind Partnership (DVCWP) was formed at a second public meeting. People paid £10 each to fund the development costs – mainly the planning application fee and the cash costs involved in producing the application and the environmental statement. Local opinion varied from strongly supportive to cautious at the first public meeting, with some concern about possible visual and noise intrusion. Most were pleased at the prospect of local people profiting from wind power, rather than non-local developers. One household raised strong objections later but had moved away from the area before the project came to fruition. One person from outside the community spoke against a wind turbine at the second meeting but concluded she wouldn’t raise a campaign against it because she could see the support and it was a relatively small turbine.
- Further research and attempts to expand membership
Efforts to expand membership of the Association were made through the local press, word of mouth and by placing leaflets in places such as the village hall and the vegetable box scheme. Three members were given responsibility for managing the development process for a while, including the turbine choice and system design, in exchange for some money and the promise of some shares. Nevertheless, a huge amount of time was donated by these and other individuals.
- Negotiations with land owners of the favoured site
The intention at this time was to place a 30kW turbine near the existing 15kW turbine just above CAT. 30 kW was calculated to provide enough power for most of CAT’s electrical demand, with most of the rest being available for conversion to heat. Export to the grid was not intended to be very significant so the implied upgrade to the weak local Grid from CAT was not a big issue at this time.
The land was owned by a Trust and only one of the four decision-makers was local. This made effective communication difficult.
- Secure grant aid
Ecodyfi successfully applied to the ScottishPower Green Energy Trust for a grant to add to the one already secured from the European Commission (ERDF). Powys Energy Agency incorporated the project into a funding agreement it had with the Energy Saving Trust (EST). Part of the EST money was used as a capital grant and the rest was used to buy shares. These were vested in the local Community Energy Fund, which seeks to reduce carbon emissions and address fuel poverty.
- Preparation and submission of planning application (including a detailed Environmental Impact Assessment); negotiation with planners where appropriate
Significant amounts of time were spent on the planning application process by four local professionals, who did not charge at that stage but who eventually were rewarded with shares as recompense for their work on landscape, noise and other predictive work.
- Achievement of planning consent with unforeseen design changes (so that the turbine could be ordered when money became available)
Only one individual letter of objection was received to the planning application. The Snowdonia National Park Authority objected on the grounds that it would be visible from the Park and the Countryside Council for Wales expressed some doubts.
Despite earlier promises, it became apparent that the 30kW turbine under development in Germany would not be available in the UK soon enough for this project. An alternative 2-bladed turbine was ruled to be unacceptable by the planning officer. The nearest equivalent was a 50kW turbine from the USA, so costs and designs were recalculated on this basis. When the planning officer opposed the lattice tower that came as standard, the possibility of commissioning a suitable tubular tower in the UK was explored. Eventually this factor and the rapidly changing dollar exchange rate made the capital costs exceed the budget and the change to a second-hand 75 kW Danish turbine was made. This was accepted as an amendment to the application.
- Signing up of land owners concerned in the new site
The increased output from a 75kW generator implied a need to strengthen the low-capacity connection between CAT and the local grid in order to cope with the “spill”. This became an issue with the landowner, who also owned some of the land required for this cabling. He eventually withdrew his cooperation and an alternative turbine site on nearby Forest Enterprise (now Forestry Commission Wales) land was negotiated with them and the planning authority. This required a complete re-design of the electrical circuits, with the longer cable route from the turbine to CAT crossing the land of two farmers and needing extra transformers.
Forest Enterprise helpfully felled trees to assist construction of a short access track from existing forestry tracks. They also agreed a temporary access licence for construction and a longer term lease at a “non-commercial” annual rental. The project was in line with the Woodlands for Wales strategy for involving communities in woodlands.
The two farmers chose to take cash rather than the shares offered for their partnership.
- Negotiation of terms for electricity sales
Although the revised configuration of the cabling (from the turbine, through an existing grid connect point and on to CAT) would make it possible for the group to export to the local grid if necessary, the original model of supplying a single user was retained. This provided the security of a long-term agreement in a volatile market at a time when the electricity market itself was undergoing radical change. It also maintained the partnership with CAT.
The purchase agreement had three price tiers, to reflect the usage of the power. The first tranche produced (per year) has a high value because it will replace electricity that would otherwise be imported or expensively generated on site. The price of the second tranche reflects a heating fuel value, and any surplus production has a lower value, representing “spill” to the grid. CAT were given rights to any renewables benefits. As it turns out, this represented a much higher value during the first year of operation than anticipated, because the value of Renewables Obligation Certificates had been higher than originally predicted.
- Ordering of wind turbine and issuing of contracts for construction and commissioning
One member was a hands-on engineer with experience of wind turbines. He ended up being the lead member of the construction team, but at an earlier stage the group sent him to Denmark to examine the proposed turbine and to negotiate essential refurbishments. These were carried out by the original manufacturer (Vestas) before shipping, apart from the painting of the tower. This was carried out by volunteer members after delivery.
Invitations to tender were issued to relevant civil engineering companies, though it was hoped that a consortium of CAT and local individuals (such as a JCB operator) would be formed and bid. In the end the contract was placed with CAT, who sub-contracted locally. Some sub-contractors chose to take shares instead of cash, as did CAT Consultancy (for their profit element).
- Build community group membership from the local community through marketing activities and register group as Industrial & Provident Society
A legal identity with limited liability was required so Bro Dyfi Community Renewables Ltd (BDCR) was formed.
A specialist solicitor recommended registration under the I&PS Act rather than the Companies Acts, mainly because such Rules are designed to provide one vote per shareholder rather than one vote per share.
There are other constitutional models for community ownerships organisations. Some examples can be found here.
- Attract sufficient share finance
The share offer was issued by the Renewable Energy Investment Club (REIC) to its members, on the basis of information received from BDCR. BDCR made a presentation to REIC members locally at a special meeting.
All members of the DVCWP had been given free membership of REIC, since this was to be REIC’s pilot project.
REIC had been set up by Dulas Ltd and Groundwork Bridgend during an EC-funded project to facilitate the purchase (by qualifying individuals) of shares in renewable energy projects, where the issue of a prospectus to the general public would be prohibitively expensive.
Baywind Energy Co-operative agreed to underwrite the offer – they would buy any unsold shares. This gave the group the confidence to proceed.
In the event the share offer was over-subscribed and individuals had to be limited to £1,000 each. The minimum shareholding was set at £100.
- Installation of road access, foundations, cabling, switch gear etc., followed by the turbine and grid link
For an illustration of the construction phase please see here.
- Commissioning the turbine and connecting it to the grid
There was a delay of several months when everything was ready apart from the grid link. One of the problems was the lack of clarification of responsibilities between CAT (as construction contractor with responsibility for ordering the grid connection from Manweb) and BDCR (with prime responsibility for landowner agreements), such that Manweb assumed they could use methods of working that had not been agreed with the landowner. Another long delay resulted from a pre-existing issue between Manweb and a landowner that was not related to the project.
- Holding of a public launch event
This was a wonderful day, with a great sense of celebration and occasion.
Establishment of management board for the Community Energy Fund
This Fund, to pay for practical measures to reduce energy costs and carbon emissions, is managed by representatives from BDCR, CAT, ecodyfi and the local Community Council (Glantwymyn). To date, it has … more here. The Fund receives income from the dividends accruing to those BDCR shares bought with EST money. It also has some funds donated by CAT from the sale of electricity from its MS4 wind turbine.
- Administration of Bro Dyfi Community Renewables Ltd
While some annual income was set aside in the budget for administration, so far it has been done voluntarily by committee members of BDCR. This is proving to be a strain. The group would like to employ an administrator, and hope to be able to do so in the future to create some additional local employment.
When running a community energy project it is essential that thinking is given to the ongoing running and administration of the organisation. Preferably, in our opinion, a proportion of generation income should be channelled towards employing someone locally on a part time basis to run the affairs of the business … don’t forget that it is a business and that it is in the interests of the shareholders (if this is your model) to ensure good management to ensure the effective running of the projects for their lifetime.
And then someone had the idea for another turbine! On to Phase 2 …
For details of the Nordtank project please see here. We hope to fill out this information in due course to provide a further case study to the V17 on how we developed and installed the larger Nordtank generator.