Community Sees First Savings from Wind Power

Gigha, a community owned island, is the only mains-connected community owned wind farm of its kind in the UK. The three Vestas V27 turbines, which have installed capacities of 225 kW each, were installed on the southern tip of the island to maximize use of the wind. Total power generation of about 2.1 GW a year is anticipated, enough to meet over two thirds of the island's needs.

"We have already established ourselves in the UK market through a number of unusual projects," says Ramsay Dunning, Green Energy UK's finance director. "We are delighted to contribute to such a remarkable enterprise and to help the islanders remain sustainable into the future."

Wind developments can be contentious projects, and the decision to go ahead in Gigha was made by the islanders in a unanimous show of hands by islanders in the village hall. Green Energy UK won the open tender to purchase power from the turbines because they are competitive financially and the company has an interesting approach to long-term sustainability, which resonates well with the community's aims. The company has pledged to give away half its company in shares to its customers and the Gigha Trust. Any Gigha customer who converts to Green Energy UK will also receive shares in the company.

The company aims to involve its customers to the maximum through a share ownership scheme and a pledge to reinvest half its profits in renewable schemes.

Gigha Renewable Energy, which was set up by the Isle of Gigha Heritage Trust, built the wind energy plant and is managing it so the community can benefit from the profits. Money earned by the plant is ploughed straight back into the community and contributes to projects such as the Housing Improvement Program.

Initial funding for the project was provided by Highlands and Islands Enterprise (HIE), which has funded 151 projects in the United Kingdom and spent almost GBP 2 million (US $3.76 million) since its launch in December 2002, on a varied range and size of projects - both completed and underway.

The Scottish Executive announced at the end of last year that it was providing a GBP 6.6 million extension to the Scottish Community and Householder Renewables Initiative (SCHRI), covering the next three years.

"With the Scottish Executive's confirmation that the SCHRI will continue, we will now be able to support a lot more community led renewable energy initiatives in the area," said Nicholas Gubbins, who is the head of Community Regeneration at HIE. "SCHRI projects are about encouraging communities to participate first hand in renewable energy projects and to bring regeneration benefits locally."

Even allowing for repayments and running costs, the islanders estimate that their turbines will immediately start to generate a profit in excess of GBP 75,000 (US $141,044) per year.

"Until now, nobody had managed to crack the financial nut enabling a community with little money to become a significant local generator," said Willie McSporran MBE, chair of the Isle of Gigha Heritage Trust and a director of Gigha Renewable Energy Company. "The solution we have developed in Gigha works by combining grant funding with loan and equity finance secured at commercial rates. What's more, by year eight we will have built up a capital re-investment fund sufficient to replace the machines without recourse to further financing."