Power to the People?
A new legal blend of Company and Partnership called a Limited
Liability Partnership (LLP) allows a simple
new way for Communities to develop wind, tide or biomass
Energy Partnership allows the Community,
Investors, and Developer/Operators to jointly develop, install
and operate community-owned renewable energy projects and
to share the energy production.
Q. Whats in it for the Community?
The Community owns the asset in perpetuity, and receives
a proportional Equity Share in the energy it
Q Whats in it for the Investor?
The Investors buy energy, in the form of Equity Shares
in production at todays price (or even a discount)
deliverable over (say) 20 to 25 years. They may use it,
or sell it to someone else. Although there is no return
ON the Investment, who thinks energy is going to get cheaper?
Q Whats in it for the Developer/Operator
The Developer/Operator manages the development and operation
of the project and receives an Equity Share, which he may
use or sell. He doesnt have to risk a penny of his
own money, but his interests are exactly the same as other
The Community of the Isle of Wiskay wishes to acquire 4
second-hand 250 kiloWatt wind turbines at a total cost installed
of £400,000. The wind is such that the turbines will
each produce an average of 600 MegaWatt/hours of electricity
each year, so that over ten years the four turbines will
generate in total 24,000 MegaWatts/hours.
At a sale price of £50.00 per MW/Hour it is necessary
to sell 8,000 MW/hrs (or 33% of production) to raise the
necessary £400,000 from Investors.
So a total of 16,000 MW/hrs or 66% of production remains
with the Community of Wiskay from which a Developer/Operator
receives 16% in return for managing and operating the installation.
And 50% of energy produced is available to the Community
as an energy dividend. They agree to distribute
20% of this to retired Community Members and the balance
equally to all, thereby reducing their bills.
Chris Cook - 22nd June 2006
Article Published in S.S.E.C Newsletter