Blowing in the wind: the answer to our energy woes?
In the second of our series exploring big economic ideas coming out of the Centre for Economic Empowerment's Festival of Economics we look at community energy schemes
One of the most exciting ideas to emerge promises to combat fuel poverty, lower fuel prices and empower and enrich local communities.
Ireland is the windiest country in Europe. A massive potential source of energy is whirling around us every day. The big corporates know that, the Scottish giant SSE, for example, it is currently progressing plans for a massive 115MW £150 million wind farm at Doraville in Co. Tyrone with enough oomph to power 85,000 homes. Local communities will benefit through a £15 million community fund.
Many will welcome the level of social investment. Yet across the world a very different model is taking shape, one where local communities themselves own the turbines or other renewable sources and either provide their own power, sell electricity to the grid or both and use the profits to benefit the community and drive down prices for those suffering from fuel poverty.
The town of Huntlee in New South Wales, Australia made global headlines this week when it announced plans to disconnect from the grid altogether because it was capable of generating all its own energy needs.
Welcome to the Community Energy Co-operative, a concept championed at the Festival of Economics by the Fermanagh Trust’s Lauri McCusker. He has produced a report on community energy in Northern Ireland which can be accessed here and has set up a community energy website at http://www.communityenergyni.org/ He is concerned that despite our rich resources communities in Northern Ireland are missing out on a concept that could be transformational for many communities, especially those in rural areas.
The concept has been around for more than a century – utility co-operatives were pioneered in Scandinavia and have been operating successfully ever since.
The Opec Oil crisis in the mid 1970s massively accelerated this process in Denmark, which is now the most energy secure country in Europe. Whilst France decided to invest in nuclear energy in response to the growing crisis, Denmark went a different route.
It now has a decentralised model of energy services based on both offshore and onshore wind energy and district heating plans many of these are run by co-operatives working with local authorities.
There is a long history of community energy projects in the USA as well. Here cost was a key driver. It became apparent by the 1930s that rural areas could not be electrified without a partnership approach with local communities. Under the New Deal of 1935 rural co-operatives were given access to cheap public finance Today over 900, mainly rural, energy co-operatives own 40% of national power lines and provide light and power to 42 million people in 47 states
The UK intended to diversify energy supplies in response to Opec but these fell by the wayside and were abandoned as the market in North Sea oil and gas expanded.
In England, Scotland and Wales a movement is steadily growing whereby local communities, using the Co-operative model are developing their own energy supplies. This Guardian piece from 2012 put the then number at 43 with a total investment of £17 Million. There’s been much more happening since but up to date figures are not available.
In Northern Ireland, however the picture is not quite so promising. Scope managed to find just three co-operative community energy ventures. The first to be established was Drumlin. Drumlin owns and operates 6 x 250kW turbines after raising £3.9 million in 2 successful share offers with shares from a minimum £250 going to local people and organisations. Shareholders get a steady return on investment and local community funds have been set up for all six sites.
Grassroots Renewables is based in the Carntogher Area of Derry/Londonderry. It has secured a £250,000 loan from the Ulster Community Investment Trust for a 225KW wind turbine at Tirkane in Maghera, where proceeds will be split between four local community organisations..
A briefing note was prepared by the research team at the NI Assembly in 2014 about co-operative wind farms which can be accessed here It pointed to costs and delays associated with connecting to the grid. To make more schemes viable NIE will need to ensure that connectivity costs are reasonable.
There is also Northern Ireland Community Energy (NICE) It installs solar panels on buildings for Third Sector organisations free of charge helping to bring fuel costs down. Its revenue comes from claiming renewable energy generation tariffs, from selling any solar-generated electricity not used in the building to PowerNI, and from charging a levy for the solar-generated electricity used in the building itself.
Community energy co-operatives seem ideally suited to Northern Ireland which has such a massive, comparatively untapped source of energy. So what is holding us back?
A number of factors emerge. Communities will need to have advice from technical experts to get any kind of scheme off the ground. There needs to be commitment from both local authorities and the Executive to support community involvement and the co-operative model and access to lower cost funding.
McCusker believes that an important first step is for the Executive to recognise the importance of communities, and specifically of community ownership in the provision of renewable energy.
If this is to get off the ground the benefits at community level could be enormous. But communities will need help, support and funding. The Scottish government is supportive, so too, increasingly is Westminster. This has yet to be replicated by the Northern Ireland Executive. It is surely time to change that.
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