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Community to invest directly in wind power in New England

By Andrew Bray on 19 January 2018


A community investment plan at Sapphire Wind Farm could be the turning point the wind industry has needed for years.

Wind farms contribute to local economies through payments to community funds and host landholders (and increasingly to immediate neighbours). This plan opens the door to a wider community cohort, who can now access the value of wind farm share ownership.

While community ownership of roof-top solar has famously snowballed, public investment in larger solar farms, such as Canberra’s Solar Share, has been growing steadily as well. Lower upfront capital costs and relatively simple design requirements have put solar projects within reach of community based organisations for a number of years.

By contrast, wind farms are big projects with high upfront capital costs, long lead times in the planning system and complex design requirements. This might explain why there has been a trickle, rather than a flood, of community projects in Australia.

Hepburn Wind and Denmark Community Wind Farm led the way, showing remarkable tenacity to build successful small wind farms with fully community-owned structures. But the significant challenges have meant that no community group has been able to replicate this model in the five years since Denmark commenced operation in February 2013. Nor have there been other models emerge from the community sector to enable wind farm investment in a different form.

While other community wind groups continue to work on the challenge, notably New South Wales’ New England Wind, the baton may be passing to the commercial sector.

Wind developer, Windlab Systems, has been the sector’s leader in community investment to date. With their first Victorian project, Coonooer Bridge Wind Farm, they pioneered a financial structure that sees host and neighbouring landholders invest directly alongside Windlab and finance partner, Eurus Energy Holdings. Together, a total of 33 local landholders own around 4% of the $20 million plus project.

The significance of the green light this week for direct community investment at CWP Renewables’ Sapphire Wind Farm is that their model creates a vehicle for investors from all across the community to invest alongside the big pension and superannuation funds.

Traditionally these funds have been the only ones with sufficient capital to own and benefit from these multi-million dollar projects. Opening up this opportunity could change the way we think about the ownership of renewable energy plants in Australia and help drive the financial benefits more directly to the regional towns and communities that host them.

The announcement was prepared by an extensive period of community education. The Australian Wind Alliance was pleased to be involved in hosting Danish renewable energy expert, Søren Hermansen, nearly a year ago, on a speaking tour around the New England region. His infectious humour and story of turning his small Danish holiday isle of Samsø 100% renewable was a great inspiration to the hundreds of people who heard him speak.

A period of community investment testing throughout the New England region followed. A very positive community response saw 337 community members pledge to invest more than $5 million in the project. The share offer is expected to open later this year with a minimum investment of $5,000.

With 80% of pledges coming from the local area, the offer looks likely to return substantial value back to the New England region. This is important as it highlights a pressing issue for regional Australia. As energy infrastructure decentralises away from the coal valleys in the Hunter, Bowen and Latrobe to wind and solar rich areas across the breadth of regional Australia, how can these new plants be financially structured to ensure that host communities benefit from their presence?

This is an historic opportunity to embed long term value chains in regional Australia that simply didn’t exist under the centralised, fossil fuel-based coal generation model of the twentieth century.

Wind farms are modern, highly automated plants. A significant portion of the work to operate and monitor a wind farm occurs elsewhere. The operation and monitoring for Sapphire Wind Farm, for instance, will occur in Canberra as part of the power purchase arrangement with the ACT government, boosting employment in the nation’s capital, a canny move by the Territory’s former Energy Minister, Simon Corbell.

The onsite staff for a wind farm are predominantly the maintenance crew. The presence of these local staff makes a material difference to the local economy but, as we’re seeing across many areas of employment, job numbers are more likely to be in the dozens than the hundreds. Opening up investment opportunities for the local community is another way to ensure value from the wind farm stays in the local area. It would make sense in time for wind farm investment to be taken up by local foundations and councils.

This community investment offer is a landmark development for Australia’s wind industry and its relationship with the communities that host their wind farms. CWP Renewables deserves congratulations for choosing to go down this path and seeing the process through.

Adoption of this model in future wind farm projects across the industry would show that the wind industry is ready to lead when it comes to nurturing social licence in regional Australia.

Andrew Bray is National Coordinator for the Australian Wind Alliance, a not-for-profit organisation promoting wind power to build prosperous communities and tackle climate change.