When heading through the Galson Estate, you will have driven by our three 900kW wind turbines in Ballantrushal. These Enercon turbines are connected to the local power grid, and, since the first turbine was erected in 2013, each year they have given clean, green electricity to something like 2,100 homes. Not only this, the profits generated from these turbines have been reinvested into the Galson Estate via Urras Oighreachd Ghabhsainn’s Community Investment Fund, assisting our local groups and organisations to make a tangible difference to our community.
Some of you may have questions about the turbines, including how they came to be built, how much energy they generate, and how profits from the turbines are distributed. This blog post aims to answer these questions, amongst others, and we hope that you find it both interesting and informative.
What was the key driver for the wind turbines, and when was the first turbine built?
In the early stages of the community buy-out of the Galson Estate in 2007, renewable energy was identified as a key driver for long-term sustainability. Provision of the Feed-In Tariff mechanism from 2010 was a key advantage. It had been intended to build 3 turbines, however, due to the banding of tariffs, it was more advantageous to install one turbine initially, which was completed in autumn 2013 on available land in Ballantrushal (Baile an Truiseil). Proximity to the electricity grid substation in Barvas was important to reduce capital costs, lower borrowing and maximise profit for the community. The first turbine was financed primarily through a loan from the Co-operative Bank, one of the few financial institutions willing to lend to community organisations.
How did the subsequent two wind turbines come to be built?
After successful installation of the first turbine, Urras Oighreachd Ghabhsainn turned its attention to financing and installing the second and third turbines. By this time, the Co-operative Bank was in major financial difficulty and unwilling to lend again. An alternative lender, Triodos Bank, was identified and Urras Oighreachd Ghabhsainn was able to progress with the second phase. There was a need to raise a local contribution towards the capital costs and, as a number of community groups had started to successfully raise funds through share offers across Scotland, this became the preferred option. In 2014, Urras Energy Society was established as the share vehicle to comply with financial regulations, to take up this new opportunity to invest in a community renewables development and the need to manage the shareholders over the longer term. A community share offer was then launched which ran until February 2015. By that point, a total of £705,800 from 167 investors had been gathered and from this, two additional turbines were installed in the summer of 2015. These turbines are operated by Galson Energy Ltd, a wholly owned subsidiary of Urras Energy Society, and the initial investors are now shareholders. The shareholders reap both the benefit of an attractive return on their investment over a twenty-year period, as well as assisting in the creation of a sustainable future for the Galson Estate community.
How much energy is generated?
In normal circumstances, the three turbines are forecast to produce 8,871 MegawattHours per annum in total. Long-term mean wind speed at 55m hub height at the site has been measured as 9.48 metres/second (21 mph), which is significantly above the UK average. Each year the turbines have given clean, green electricity to around 2,100 homes.
When can a local electricity tariff be offered ?
The electricity market is complex, competitive and highly regulated. The entry requirements into this market are disproportionately costly and demanding, thus very much suited to energy providers with large customer bases. Unsurprisingly, the largest 6 energy providers dominate the market with a combined share of around 70%. It is particularly challenging for smaller providers with a high renewable energy supply to be economically viable. One major challenge is that they need to buy from other providers to make up the balance, for example, in periods of low wind. In 2019, nine energy providers ceased trading followed by four failures in 2020. In recent years, local tariffs were offered by Hebrides Energy in association with a number of smaller energy providers but that initiative has been hampered due to successive failures of these partners. The whole of the Outer Hebrides is considered a very small market in the context of the energy market and not all customers will or can sign up to local tariffs which further reduces the attractiveness of the offering to energy providers. Change may be coming slowly. Energy policy is reserved to the UK Government and there is currently draft legislation in the form of a Local Energy Bill being developed to enable smaller, local providers to participate. However, support from politicians is not widespread, and the legislation may be some years away from being passed.
How are the profits distributed, and how do they benefit the local community?
Net profits from wind energy production are passed to the community landowner Urras Oighreachd Ghabhsainn for distribution, in accordance with its 2017-37 Strategic Plan. This Plan was developed following a household survey and an extensive consultation across the 22 townships in the Galson Estate during 2016. The Plan shapes the work of the Urras and it can be read here.
The profits from the turbines are re-distributed back into the community of the Galson Estate via the Community Investment Fund. The Community Investment Fund (CIF), first established in 2014, is open to constituted, eligible groups with projects that would benefit the aspirations, needs and issues of Galson Estate residents. There are three levels of funding stream, and all three are still active to this day. The aims and deliverables of the fund remain the same since its conception in 2014 – offering not only mentorship, advice, training, opportunity for partnership-based working and the development of the skills of Galson’s people, but also injecting funds into local services and facilities, which contributes to the overall wellbeing of the area. In total, over 90 individual projects have been supported through the CIF. Beneficiaries encompass a wide range of groups and activities – training equipment for local first responders, support for an Alzheimer’s dementia café and toilet facilities at a local play park, to name but a few.
In late 2020, the Community Investment Fund was selected as an example of Community Wealth Building by SCRIG, Scotland’s Centre for Regional and Inclusive Growth. You can read this article here.
To find out more about the Community Investment Fund, click here.
Picture credit: Neil MacKinnon