Community Wind Turbine Project
SHARE OFFER LAUNCH TO RAISE FINANCE FOR NUDC'S WIND TURBINE PROJECT
We will soon be launching a Community Share Offer to raise funding to get our wind turbine project up and running. This will be an essential element of project funding, and community support is really important. It will also be a unique opportunity to ensure that more of the project revenue comes back to North Uist, both to the individuals who invest and to the wider community.
Community Shares have been created specifically to help projects that are designed to bring concrete benefits to their community. They are used to raise money for anything from community pubs to large-scale energy projects and are an increasingly popular way to raise money to fund a project. Community Shares are particularly suitable for community energy projects due to the long-term nature of such projects and their guaranteed income, which helps reduce any risks to investors.
There have been a number of successful Community Share Offers in recent years. The Galson Trust raised £705,800 in 2016 for a third 900kW wind turbine and Broom Power in Ullapool raised £900,000 in 2016 for a 100kw Hydro-electric scheme. NUDC are hoping to raise £1,100,000.
Community shares are seen as a very safe investment, and, along with the knowledge that their investment is making a positive difference to the community, offer attractive returns for investors. With the price of each share set at £1, and a minimum investment of £250, NUDC aim to provide a 4% return annually for each investor in the project.
The project, which is aiming to reach completion by June 2019, is expected to generate over £2.3 million in profit for the North Uist community over the next 22 years. The two 900kW turbines, to be sited on Criongrabhal, near Clachan, will cost a projected £3.6 million to construct, with 70% of this covered through a commercial loan.
As well as providing a substantial return to each investor, the more money that NUDC is able to raise, the less it will have to borrow commercially. This will then mean paying less in interest, which means more money coming back to the local community.
NUDC is setting up a community benefit society to run the Share Offer, called North Uist Development Company Trading (NUDC-T). Community shares differ from normal shares traded on the stock market – they can’t be sold or transferred and each shareholder, regardless of how many shares they buy, has one vote in the company. We also that the Share Offer will attract investors from neighbouring communities throughout the Outer Hebrides, and the rest of the country.
To ensure the Share Offer is successful, NUDC are currently working with Community Shares Scotland and have engaged the services of CMS Coop. CMS have experience working with a number of successful share issues, including for Galson Trust and Garmony Hydro on Mull, and their expertise will be hugely beneficial.
We will announce the launch of the share offer soon, along with the publication of a brochure which will set out all the details for the benefit of potential investors. We are also planning a number of events and information sessions both before and during the launch to engage with the community and provide more information.
What benefits will the project bring?
Why do we want to run a community share offer?
Share offers are seen as a safe, long-term investment. It’s a way to bring more money into the local economy:
Other successful share offers...
There have been a number of successful share offers elsewhere for community energy schemes.
Why should you invest in this project?
- Investing in this project will provide a number of concrete benefits to the North Uist community.
- With revenue coming in for the next 20 years, this is especially true for future generations. Shares can also be bought on behalf of children.
- They will receive a return on investment of 4%/year. This is more than they can receive from most banks!
- They can become involved in the Benefit Society. They will receive a vote, and be able to elect directors.
- This project is better for the environment, and reduces North Uist’s carbon footprint.
Community Wind Turbine Project Archive Statements
NUDC Statement, July 2017
NUDC WIND TURBINE PROJECT NOW ONE STEP CLOSER!
North Uist Development Company has finally secured planning approval for its flagship wind energy project. The Planning Committee of Comhairle nan Eilean Siar approved the Development Company’s planning application on 20 June, raising hopes that the.project can now move ahead after years of delay.
Mustapha Hocine, chair of NUDC, says: “We’re very happy that planning has finally been approved and the project is able to move ahead. NUDC’s aim is to develop a sustainable and viable community in North Uist, and the funds created by the turbine project will help us to achieve this. Thanks are due to the efforts of my fellow directors, past and present, and our NUDC Local Development Officers, as well as all of our project partners, for their work in getting us to this stage.”
NUDC will now work to ensure that the project generates as much revenue as possible. Firstly it needs to complete a pre-accreditation application for the UK Government’s Feed-in-Tariff subsidy, which will provide a significant revenue stream for the project over 20 years. Although the potential revenue would have been much higher if the project had not been delayed for so long by planning difficulties, it should still generate up to £4 million over the its lifetime.
NUDC is also currently in discussion with commercial lenders who will provide capital finance for the project. Securing these funds may be a lengthy process, but NUDC hopes to employ a project manager in order to conclude a deal with the banks as quickly as possible.
NUDC hopes to raise a significant proportion of the necessary funds through a community share offer, which will enable local residents to invest in the project. When taken together with the revenue generated by the turbines themselves, community share schemes are a great way to ensure that revenue raised by the project remains within the local community.
There remain however a number of planning conditions, which have to be discharged before the project can go ahead. The main condition relates to the implementation of a radar mitigation scheme - the technical solution agreed upon by the Ministry of Defence which will mitigate the turbines’ effect on radar systems. Although the MoD has agreed the condition in principle, NUDC hopes to meet with them soon to discuss the details of the system. A number of management plans also need to be commissioned, covering transportation, pollution and drainage, peat management and geo-technical work.
NUDC plans to hold a community event in August, with the aim of seeking community engagement in the project, discussing next steps and how the community is set to benefit. This is likely to be in Carinish Hall and will be promoted in Am Paipear, via social media and elsewhere.
Mustapha Hocine says: “It has taken a long time to reach this position and we have undoubtedly overcome a major obstacle. But there is still a lot of work to do and the success of the project is not yet guaranteed. But I would like to thank the community for its patience and support, and I would like to encourage everyone to look out for news of the latest developments and to come along to the public meeting next month.”
ARCHIVE INFORMATION ON THE WIND TURBINE PROJECT
Those who require more detail on the Scottish Government's reasons for refusing the NUDC planning application for two turbines at Clachan can view the decision documents here:
NUDC Statement, March 2017
MINISTRY OF DEFENCE (MOD) AGREE TO LIFT LONG-STANDING OBJECTION TO TURBINES - PLANNING APPLICATION SUBMITTED
The North Uist Development Company has now submitted a new planning application for the Community Wind Turbine Project, and is hoping for a positive response from the Comhairle nan Eilean Siar on 13th June 2017. The project will see the installation of two 900kW turbines at the project site near Clachan, which should generate strong revenue for NUDC and the local community. Other community turbine projects around the islands are already providing substantial funds for their local communities.
This new planning application has only become possible thanks to the tireless work of NUDC in overcoming the long-standing objection of the MOD, who allege that the effect of the proposed turbines on the St Kilda Range Control Radar places an unacceptable risk on their radar operators.
Due to this objection, in November 2016, NUDC submitted a proposal for a technical solution which will mitigate the turbines’ effect on the radar systems. In January the MOD accepted this proposal and will issue NUDC with a Planning Condition, which will mean that they will lift their objection to the planning application by NUDC, conditional on the mitigation system being implemented.
Mustapha Hocine, Chair of NUDC says: “This is an extremely welcome development for our project. For the last two years, we have sought to engage with the MoD, which has not been easy, and it took the assistance of the Scottish Government to bring them to the table and agree on our options. Although there will be a number of challenges ahead still for the project, we’re very happy that the main obstacle of the MOD’s objection may finally be overcome and with the continuing support of the North Uist community, the project can keep going.”
The mitigation system itself is called Thruput, and once installed at the St. Kilda radar, will blank out the image of NUDC’s turbines on the radar screen. It has been used successfully by a number of other wind turbine developments around the UK on identical radar systems. The cost of the mitigation solution will have an impact on the project’s development costs, however this has been factored into the financial projections. Both Local Energy Scotland and Community Energy Scotland, who are assisting NUDC on this project, have advised that it remains viable.
Time is of the essence for the NUDC project however. The rates from the Feed-in Tariff subsidy scheme, of which NUDC aims to take advantage, are constantly reducing, and unless the project qualifies for pre-accreditation soon, it may no longer be cost-effective. Indeed, the biggest misfortune for this project has been the potential revenue that the community has lost out on, due to all the delays caused by the obstacles it has faced. Where once the community could have benefitted from over £400,000 annually, the revenue received will now be significantly lower.
NUDC are now planning the next steps for the project, which will be to plan the development of the site, and to continue discussions with funders to raise finance for the project. Some of the funds may be raised through a community share issue, which have proved successful in other projects around the Highlands and Islands.
Most importantly, this progress could mean that North Uist will no longer be virtually the only island unable to exploit its renewable energy resources for community benefit.
NUDC statement, November 2014
NORTH UIST DEVELOPMENT COMPANY REAFFIRMS COMMITMENT TO RENEWABLE ENERGY PLANS
North Uist Development Company is pressing ahead with plans to harness renewable energy for community benefit. This is in spite of the recent disappointing decision by the Scottish Government to refuse planning permission for NUDC's flagship project, on account of an objection from the MOD. This project would have seen the erection of two wind turbines at Clachan, delivering £200,000 into the community annually for 15 years, increasing to more than £450,000 in the project's later years.
"Our remit and purpose is to secure economic development in North Uist and Berneray, so we intend to work together with the Comhairle, the MOD and other stakeholders to find ways of achieving our goals and making North Uist a better, more attractive place to live and work," says Robert Fraser, chair of NUDC. "We believe that the decision was wrong that emerged from the planning process on this occasion, and we reject entirely the notion that our project could not, through appropriate management, coexist with the operation of MOD's Range radar. Nonetheless we recognise we cannot continue to contest this point, and our main concern is to get the parties together to find a way forward."
NUDC directors have been involved in a programme of meetings since the publication of the planning decision. These meetings have involved MSP Alasdair Allan, senior members and officers of the Comhairle, Community Energy Scotland and Local Energy Scotland. Urgent meetings are also being sought with Derek MacKay, minister for local government and planning, and Fergus Ewing, minister for energy, enterprise and tourism, while Angus Brendan MacNeil MP is to be asked to raise the issue with the MOD. It is hoped that by bringing political pressure to bear at the highest level, the MOD will agree to get involved in problem-solving with the local community.
A heartening aspect of the report which went to the Scottish Government, and which informed their decision, was that the fragility and pressing needs of North Uist were well-recognised particularly with regard to population decline and lack of employment and training opportunities. Although frustrated by the conclusions of the report, which favoured the MOD's objection, NUDC nonetheless believes that the recognition of local needs, which the report embodies, will now act as a powerful lever with Government in helping North Uist gain the support it needs.
North Uist is now the only area of the entire Western Isles which is not able to raise its own community funds, despite NUDC having worked on its renewable project for six years. NUDC welcomes the recent press comments from Donald John MacSween, the chairman of the Point & Sandwick Development Trust in Lewis, about spreading the £1m annual benefits of the Beinn Ghrideag wind farm throughout the islands. Maybe these benefits could mean compensation for those communities which are not able to develop their own wind resources because of MOD objections.
NUDC does feel there is "room for manoeuvre" in its discussions with the MOD, since the objection had nothing to do with "defence of the realm" - a function which is carried out by an entirely separate radar system, which was not a factor in the refusal of the NUDC planning application. NUDC has always been willing to enter into discussions with the MOD about "mitigation", which would include switching turbines off during periods of operation at the Range.
In its mission to develop a project which delivers community benefit, NUDC is willing to look at all options. One is to revisit the feasibility study, published in 2009, which originally identified the potential for a community-owned wind project. In the coming weeks, NUDC will be working closely with Community Energy Scotland towards an application to the Infrastructure & Innovation Fund, which aims to develop projects linking local energy generation with local energy use.
"While we are certainly not changing our view as to the importance of the wind resource in our location, we are keen to look at a holistic approach," says Robert Fraser. "We want to capture the resource that is available to us here and develop a green economy here as well. Such an approach might take generation from a variety of sources and technologies, such as wind, tidal, hydro and solar, maybe working together, and making these available to a variety of end-users or customers, including local ones, while also pioneering innovative storage and distribution techniques."
KICK IN THE TEETH" FOR HOPES OF REGENERATION IN NORTH UIST
North Uist was dealt a bitter blow with the announcement by the Scottish Government that they are refusing planning permission for North Uist Development Company's wind turbine development at Locheport.
This project, which has taken four years to reach this point, would have delivered a cash benefit to the island in excess of £200,000 annually for 15 years, rising to more than £450,000 in the years after that - a massive injection of funds which could have made an enormous difference to the lives of people in our community.
Unfortunately the MOD belatedly decided to object to the project on the grounds (deemed by almost all those knowledgeable on the subject to be spurious) that wind turbines at the chosen location might cause interference to Range radar systems. This was despite the fact that in 2010 the MOD had assured NUDC that they would have no objection to the project.
The MOD intervention triggered a protracted process, with a public enquiry and a referral to the Scottish Government, the result of which we have this week.
"We feel that the North Uist community has been dealt an extremely bad hand here," says Robert Fraser, chair of NUDC. "We are now virtually the only community in the islands which is not able to derive community benefit from the great wind resource we have. It is incredibly disappointing for all those who have worked on this project since 2009 when a community-sponsored feasibility study identified our wind resource as our best hope for community regeneration.
"This really is a kick in the teeth for North Uist, which will do nothing to stem population decline in our island, nothing to tackle unemployment and lack of opportunity for our young people and nothing to help make the lives of our older people more comfortable and enjoyable.
"I have to say we feel very let down by the lack of support from the Comhairle which, although it did eventually support our application in a vote of members, has issued a statement following this week's Scottish Government announcement which makes barely any mention of the loss to the community this decision represents and more or less blames the community and NUDC for the protracted nature of the planning process.
"Coming hard as it does on the heels of the Comhairle's decision to force us out of the former head teacher's house in Bayhead and force the closure of the community resource and fledgling business centre we were just beginning to develop there, we do wonder if there is a pattern here and whether such flagrant disregard for the wishes of the community would be the norm if we were 50 miles nearer Stornoway, where most of the councillors' votes are to be found.
"In terms of where we go from here, the directors of NUDC will be meeting as soon as possible to discuss our options, and we have already been assured by Community Energy Scotland that their resources will continue to be available to us, for which we are grateful. One thing we will certainly want to consider is that the community of North Uist is being denied the opportunity to benefit from its natural resources because of alleged interference with an air defence radar which is operated by the UK Government. On that basis it is only right that the UK Government compensates North Uist for the loss which we will incur over the next 20 years. Of one thing people can be sure - we exist to facilitate economic and cultural development in North Uist, and we will continue to do that with all possible vigour."
Update February 2014
The largest project of NUDC is the plan to erect two 900kw wind turbines near Clachan. The sole aim of this development is to raise funds to support the 'social, educational, cultural, economic and environmental wellbeing' of people residing in North Uist, Grimsay, Baleshare and Berneray. NUDC has professional estimates that the proceeds from this project, in the form of Government subsidy and sale of electricity, will amount to £179,000 annually for the first 15 years of operation, starting in late 2014, rising to £450,000 in years 15 – 20.
These sums would bring massive benefit to the many community groups and projects on our island, which currently lead a ‘hand to mouth’ existence because of funding difficulties. The cash injection would also trigger the creation of new projects, new opportunities and new benefits, currently not even thought of in the present funding climate.
However the whole development is currently mired in planning difficulties, not of NUDC’s making, but caused by the MOD changing their policies regarding the erection of wind turbines within a self-declared exclusion zone around the South Uist Range and the Cletraval Radar.
As a result, despite the agreement of North Uist Estate and the overwhelming support of Comhairle members in a vote last November, the Scottish Government decided just before Christmas to call the application in. This has triggered a legal process which is just beginning and which in the worst case could result in the Comhairle’s approval of the application being overturned or, at best, significant delay to the process. This delay has already caused NUDC to miss the registration deadline to obtain the higher Government subsidy figures (FITs) - so the revenue figures quoted above have already fallen to £129,000 and £400,000 respectively. This is money taken straight out of the pocket of the North Uist community.
NUDC believes that sustained public pressure from the community will make it more difficult for the Scottish Government to overturn the decision of the legitimate local planning authority.
“We therefore urge everyone who supports this project to lobby for its continuation – write to Angus Brendan MacNeill MP, write to Alasdair Allan MSP, write to Derek MacKay MSP, Minister for Local Government and Planning, write in to our local newspapers,” urges NUDC chair Robert Fraser. “It is no exaggeration to say the success of this project hangs in the balance right now, as does the potential income stream which depends upon it, and the economic development which NUDC exists to encourage.”
Updates to the current situation will be posted here as soon as they become available.
Photographic visualisations of what the wind turbine development will look like from five key vantage points are available to view here (click on the images to enlarge).