Joint Enterprise

Energy4All’s experience over the past decade reinforces the idea that Joint enterprise may offer some interesting ways forward. Several of Energy4All’s projects already use forms of joint enterprise:-

  • Fens Co-op (ownership of a commercial wind farm in conjunction with EDF),
  • the highly successful collaboration with Falck Renewables, (5 co-ops in Scotland each owning a stake in a major wind development).
  • Baywind’s current collaboration with Infinergy on the repowering of Harlock Hill.

We also shouldn’t forget the link with Findhorn (helping that community to be self-sufficient in power), the deal in N. Ireland to create the Drumlin Co-op (sites now under construction), and the recent contract to create a family of individual co-operative-owned turbines across Norfolk.

Hence Energy4All’s experience may be of value in this debate, not least in defining the necessary conditions for success of joint enterprises in this sector.

Energy4All’s experience is that joint ventures can certainly help to overcome some of the barriers to entry. However the incentives for entrepreneurs to engage with communities are often insufficient. Hence even though there are indeed a few altruistic entrepreneurs out there who may welcome a community ownership model in principle, they normally expect the community to make some major contribution to the project, typically in the form of capital to build it. In Scotland, where grant finance has been much more readily available, it is possible for communities to own projects without having to raise the bulk of that finance themselves, but elsewhere in the UK this is unfortunately a remote prospect.

Without that, it is difficult to envisage many projects being ‘adopted’ by public benefactors and effectively gifted to a community, although there are a few examples where a community has ended up apparently ‘owning’ an asset it did not pay for (with or without grant support). These are typically where the developer of a major wind project ‘gifts’ one turbine (or more accurately, the nett revenue from one turbine) to the local community as part of a benefits package. This is obviously of enormous benefit to the community in question and may well serve as a funding source for further local projects, but in effect it is simply a different way of the developer making an annual community benefit payment.

Energy4All’s experience of negotiations with the major wind farm developers reinforces this point: Having established a proven model with Falck Renewables, Energy4All has held talks with many of the major utilities and wind farm developers, who have expressed interest in offering a similar package to their local communities. Despite the very small financial cost to the developer, not one has proceeded with an agreement, leaving Falck as the sole developer offering a community ownership stake on all its wind farm developments and reaping the rewards in terms of community relations and national reputation. The reason for this seems to be that they cannot see enough benefit to themselves to justify the perceived hassle and possible cost of offering a community stake. This is not encouraging for any proposal to roll out a joint venture initiative.

It seems that something more is needed if community ownership is to make the breakthrough that both Energy4All and ResPublica believe is vital. ResPublica suggests a range of measures including a greatly enhanced role for local authorities and a responsibility on them to support community initiatives and to establish a planning fast track for community projects. This is all excellent stuff and potentially very valuable, but the analysis now needs to be taken a stage further to address the issues of finance and developer commitment. Without these, it will be hard to achieve what is needed in terms of building community ownership towards the vital role it needs to play in the UK’s overall renewables strategy.

  • Social Enterprise UK
  • Keyfund
  • I'm a member - Community Energy England