The UK's biggest community energy company
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Published: 15 July 2016
This Article was Written by: Katie Hill - My Green Pod
On 17 May 2016, Bath and West Community Energy (BWCE) launched share and bond offers to take a solar farm in Somerset into community ownership. The array, near Crewkerne, is forecast to generate 5,100MWh of clean renewable electricity every year – the approximate annual demand of 1,650 homes.
When BWCE takes ownership of the Crewkerne solar array in July, it will take BWCE’s total generating capacity to over 12MWp – the largest of any community energy enterprise in the UK. The total output of BWCE’s renewable energy projects – from the 10kW solar PV project on St Martin’s Gardens Primary School in Bath to this 5MW solar array in Somerset – will be equivalent to the electricity used by around 3,900 typical homes every year.
Something in the water?
Whatever’s in the water in the South West of England, we’d like it piped around the UK. Bath and Bristol are now firmly on the map as key regions for ‘positive’ investment in projects that offer social and environmental benefits as well as attractive financial returns.
Just a month before BWCE announced it was to become the UK’s biggest community energy company, Bristol Energy Cooperative (BEC) signed agreements to add £3.95 million of funding to its community energy projects, taking the total raised since November 2015 to £9 million.
BEC used the money to build a 4.2MW solar farm at Lawrence Weston, Bristol. Its portfolio already included a 4.6MW solar array at Puriton near Hinkley Point, Somerset, and seven rooftop arrays on community buildings across Bristol.
Back in April, when BEC was set to become the UK’s largest generator of community energy, founding director Andy O’Brien acknowledged that ‘this is a fast-growing and essential part of the UK’s energy mix’, adding, ‘we can’t wait to be overtaken as more community-owned capacity is added to the National Grid.’
Transforming energy ownership
Established in 2011, BEC – which is currently on its third fund-raise – and award-winning community enterprise BWCE are among the UK’s first community energy firms. They both partnered with Mongoose Energy, which works with community groups, commercial project developers and investors to identify, develop, finance, build and manage community-owned renewable energy projects. The company’s goal is to transform the nature of energy ownership in the UK, and it’s doing a great job so far.
Mongoose Energy now looks after 44MW of renewable electricity generation capacity for community groups, and there’s an additional 16MW in the pipeline. The company’s next move is to launch an energy supply business, which will be the UK’s first supply company that’s majority owned by community renewable electricity groups.
A strong track record
BWCE has served as evidence that community energy schemes can – and do – work; it has delivered the promised 7% interest per year to shareholders in each of the four years since its first share offer, and has to date invested £75,000 of its cash surplus into its independent community fund. This money has been distributed to local initiatives for community carbon reduction and projects that address fuel poverty. Over its 25-year life, the Crewkerne project alone will recycle £3 million of cash surplus back into local communities.
Crewkerne array is the sixth fundraiser BWCE has opened for public investment; each time, BWCE has either reached its fundraising target on or ahead of time. This time was no different; with £1 million raised in just under two months, the over-subscribed share offer closed early. The bond offer is still open and is well over half-way to raising an additional £1.6 million, which will be invested alongside a £3.33 million Triodos Bank loan to buy and develop the Crewkerne array.
The option of short-term investment with bonds and medium- to long-term investment with the shares should make Crewkerne array a popular proposition; while locals will like the idea of an ethical, renewable energy project that gives back to the community, people all over the UK are being drawn to investment opportunities that offer better interest rates than ISAs or savings accounts.
The bond is in the form of a loan to BWCE and will pay a return on investment of 5% a year for two years (5.5% for members of BWCE and its partner organisations) with interest paid annually.