Consider community wind farms
COMMUNITY WIND PROJECTS are a growing phenomenon in a number of developed countries. These projects can be traced back to Denmark in the 1970s.
They were called wind energy cooperatives. Germany was next to start projects through wind energy cooperatitves or community wind. These projects gained great momentum because it was an opportunity for ordinary citizens to get involved in an industry that up to that point was reserved for wealthy utility companies.
Community wind projects are now in China, Australia, United States, India, Netherlands, Canada and the United Kingdom. The concept is simple.
In a community-based model, the developer/manager of a wind farm shares ownership of the project with the area landowners and other community members. Property owners whose land was used for the wind farm are generally given a choice between a monthly cash lease and shares in the wind farm.
So now you know about community wind, is there any reason why this can’t be done in Barbados? Is there any reason why we can’t do it with solar farms projects as well? I believe it can be done. The amendments to the Electric Light & Power Act (ELPA) has opened the door for such a project to exist. The technology is mature enough and the cost has come down enough to make it a viable investment. However, we have two challenges. One is getting the right power purchase agreement (PPA) and the second is to get Barbadians to come together and make a common investment.
So what is a PPA? It is an agreement between the wind or solar farm owners and the utility company. It would have a fixed rate through which the utility company would agree to purchase the electricity your farm produces.
These agreements are normally fixed for 15 to 20-year periods, which means that the owners will have a steady revenue stream. Once the wind or solar farm is paid for, everything after that is profit to be shared among the owners. The details of these PPAs or part of the changes to the ELPA and it is what the popular businessman Ralph “Bizzy” Williams has been talking about in the Press in recent times. So while the concept is a viable one, it is only really viable with a fair and equitable PPA.
So assuming the challenges with the PPA can be resolved, let’s look at the second challenge. Getting Barbadians to accept wind turbines operating in the local landscape – getting several like-minded Barbadians to come together and form a wind energy cooperative or a community wind/solar farm.
Up to this point in our recent history Barbadians have said no to the idea of a wind farm, because no one wanted it in their backyard and some Barbadians are not good at working in a joint business venture. So what if you now could be one of the investors and own piece of the business which makes you a good return on your investment for the next 20 years? Would you feel the same way?
In Germany all the communities that were opposed to wind farms made an about-turn once they were offered piece of the action. So will Barbadians respond to the community wind concept in the same way? I am not sure, but what I do know is that these projects must happen if we are to have significant enough renewable energy penetration to reduce the foreign currency being spent on oil. So if we don’t get involved and own piece of these projects, foreign investors will do it for us.
So what would it take? You would need to raise funds to invest between $1.4 million to $45 million for a 250 kilowatts to a ten megawatts solar plant and around $625 000 to $25 million for the equivalent wind plant. The preference for farm lands is to allow for multi-purpose use of the lands, where many crops could co-exist with the wind turbines.
You would need some land to put the wind turbines or solar panels on, preferably farm land. You would need a renewable energy company to design and operate the plant and you would need a company to supply and install the plant.
Now the average person would never consider a million dollar investment. However, with a 15 to 20 year PPA it should provide enough security for a financial institution to provide the funding. Then increase the numbers of people in the project to reduce the financial commitment per person.
What if 150 people got together to start an entry level wind or solar farm? This would be $10 000 each. If this still sounds like too much money, what if a credit union treats this as an investment product for its members? It would become achievable for just about anyone.
This investment would not only put money in Barbadians’ pockets but it would also help the economy by reducing the import bill and reducing the cost of electricity to every Barbadian. I know investing $1.4 million in a technology you don’t really understand would seem very intimidating.
However, with a possible payback for the investment in five years and a guaranteed revenue stream for 20 years it would be a good investment – the type of investment that is attracting the attention of foreign investors.
So can we afford to allow these wind farms to be owned and run by foreign investors who will send all of the profits out of Barbados? No, we need to invest in these farms and use the community wind approach that is working in many countries to determine our future.
Jerry Franklin is managing director of EnSmar Inc. Franklin is an engineer, energy auditor, equipment tester, and energy solutions provider. Email: [email protected]