1272987519 871
Jake Burnyeat Green Trust Wind CIC
Options for ‘community benefit’ from wind power Jake Burnyeat GreenTrust Wind CIC [email protected]
GreenTrust Wind
Overview
1. Why is community wind important? 2. What is a community project? 3. The basic economics of a wind project 4. Basic options for direct financial involvement
GreenTrust Wind
3
Why is community wind important?
Options for speeding up wind project delivery in the South West: 1.50MW+ projects determined at national level 2.‘Sticks’ for local planning authorities 3.Or, do communities hold the key?
GreenTrust Wind
4
What is community-scale wind? Eigg 4 × 6kW
Westmill Co-op project 5 × Siemens 1.3MW
GreenTrust Wind
Gigha 3 × 225kW
Middelgrunden Denmark 40MW
5
What is a community wind power business model? • Community involvement in decision making • Community developed and owned project • Community funding of some or all of a developed project • Community benefit fund • Community power supply
GreenTrust Wind
6
The economics of a 16.1MW wind farm 16.1 MW project assumptions Turbines
7 x 2.3MW
Long-term average wind speed at hub
7.5m/s
Average annual production
43,000 MWh c.10,000 homes
Photo courtesy of Nordex GmbH
GreenTrust Wind
7
How much money do wind farms make?
50.0
Cash Flow Revenue Operating costs Gross profit Finance
Cumulative cash flow, 60% debt
£8.4m 40.0
£4.5m
30.0
(£0.78m)
20.0
£3.7m (£1.2m)
Tax*
(£0.75)
Free Cash Flow
£1.75m
£m
Investment (60% debt)
10.0
0.0 0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
-10.0
-20.0
Year
*Capital allowances reduce tax in early years, and enable a payback that is quicker than capital investment / annual average free cash flow
GreenTrust Wind
8
20
1/ Community developed and owned Investment ‘Risk’ investment Construction equity investment
£600k+ Up to £8m
Return 20 year cash flow
£1.75m
20 year leveraged equity IRR
25%
Or, upfront development profit
GreenTrust Wind
£5m - £8m+
Some challenges: • Securing a site • Setting up a community power company • Raising the risk investment • Development • Procurement • Raising the construction funding • Managing the operating project, and the profit • Skills and resource for all the above 9
2/ Community funded Co-operative share investment Construction equity investment
Up to £20k per person
Return 20 year Return
GreenTrust Wind
5-10%
10
3/ Community fund Community Offering £ / year / MW 4,500 4,000
3,500 3,000 2,500 2,000 1,500 1,000 500 -
GreenTrust Wind
11
Contact GreenTrust Wind Unit 12 Carrick Business Centre Commercial Road Penryn Cornwall TR10 8AR Jake Burnyeat Director Tel: 0781 501 45 40 Email: [email protected]
GreenTrust Wind
12
Options for ‘community benefit’ from wind power Jake Burnyeat GreenTrust Wind CIC [email protected]
GreenTrust Wind
Overview
1. Why is community wind important? 2. What is a community project? 3. The basic economics of a wind project 4. Basic options for direct financial involvement
GreenTrust Wind
3
Why is community wind important?
Options for speeding up wind project delivery in the South West: 1.50MW+ projects determined at national level 2.‘Sticks’ for local planning authorities 3.Or, do communities hold the key?
GreenTrust Wind
4
What is community-scale wind? Eigg 4 × 6kW
Westmill Co-op project 5 × Siemens 1.3MW
GreenTrust Wind
Gigha 3 × 225kW
Middelgrunden Denmark 40MW
5
What is a community wind power business model? • Community involvement in decision making • Community developed and owned project • Community funding of some or all of a developed project • Community benefit fund • Community power supply
GreenTrust Wind
6
The economics of a 16.1MW wind farm 16.1 MW project assumptions Turbines
7 x 2.3MW
Long-term average wind speed at hub
7.5m/s
Average annual production
43,000 MWh c.10,000 homes
Photo courtesy of Nordex GmbH
GreenTrust Wind
7
How much money do wind farms make?
50.0
Cash Flow Revenue Operating costs Gross profit Finance
Cumulative cash flow, 60% debt
£8.4m 40.0
£4.5m
30.0
(£0.78m)
20.0
£3.7m (£1.2m)
Tax*
(£0.75)
Free Cash Flow
£1.75m
£m
Investment (60% debt)
10.0
0.0 0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
-10.0
-20.0
Year
*Capital allowances reduce tax in early years, and enable a payback that is quicker than capital investment / annual average free cash flow
GreenTrust Wind
8
20
1/ Community developed and owned Investment ‘Risk’ investment Construction equity investment
£600k+ Up to £8m
Return 20 year cash flow
£1.75m
20 year leveraged equity IRR
25%
Or, upfront development profit
GreenTrust Wind
£5m - £8m+
Some challenges: • Securing a site • Setting up a community power company • Raising the risk investment • Development • Procurement • Raising the construction funding • Managing the operating project, and the profit • Skills and resource for all the above 9
2/ Community funded Co-operative share investment Construction equity investment
Up to £20k per person
Return 20 year Return
GreenTrust Wind
5-10%
10
3/ Community fund Community Offering £ / year / MW 4,500 4,000
3,500 3,000 2,500 2,000 1,500 1,000 500 -
GreenTrust Wind
11
Contact GreenTrust Wind Unit 12 Carrick Business Centre Commercial Road Penryn Cornwall TR10 8AR Jake Burnyeat Director Tel: 0781 501 45 40 Email: [email protected]
GreenTrust Wind
12
