Co-operative Community Schemes

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Co-operative Community Schemes

• Alex Bird
• Chair, Co-operatives Mutuals Wales

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Co-operative Community Schemes

• In the past developers have seen community
  organisations as useful partners
• They can fulfil Corporate Social Responsibility
  commitments
• They can bring community buy-in
• Community organisations can also be developers in
  their own right

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Co-operative Community Schemes

• Co-operatives are community based
• Generally much more commercially focussed than
  other community organisations
• Can be-
• Worker Co-operatives
• Consumer Co-operatives
• Community (Hybrid) Co-operatives
• Secondary Co-operatives

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Co-operatives defined

• Defined originally by the International
  Co-operative Alliance in 1937
• Latest revision 1995
• 800 million members worldwide
• 100 million jobs worldwide
• 4,820 co-ops in UK
• 205,800 jobs in UK
• 28.9bn turnover in UK

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Co-operative Community Schemes

• The Three Economic Sectors

First Sector The Public Sector
Third Sector Hard to Define
Second Sector The Private Sector
Central Government Nationalised
Industries Government Agencies Quangos
(ASBs) Armed Forces Health Service Fire
Service Regulators Regional Development
Agencies Devolved Regions/Nations Local
Government Parish/Community Councils
Multi-Nationals PLCs Conglomerates Offshore
Companies Private Companies Partnerships Ltd
Partnerships Sole Traders Franchises
Voluntary Sector
Social Economy
Charities that Trade Social Enterprises Community
Businesses Building Societies Credit
Unions Worker Co-ops Consumer Co-ops Arts
Centres Enterprise Agencies ILMs
Voluntary Organisations - Charities - Voluntary
Groups - Tenants Groups - Campaigns - Self Help
Groups
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Co-operative Community Schemes

• Co-ops governed by ICA principles
• Voluntary and Open Membership
• Democratic Member Control
• Member Economic Participation
• Autonomy and Independence
• Education, Training and Information
• Co-operation among Co-operatives
• Concern for Community

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Co-operative Community Schemes

• Co-operatives are accountable to their membership
• Co-operatives have long term investment not
  traded shares
• Co-operatives share risk amongst stakeholders
• Co-operatives can overcome NIMBYism
• Co-operative model brings a whole mutual support
  mechanism into play

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Denmark

• In 2002, the installed capacity of wind energy in
  Denmark was 3,000 MW, generated from 5,600
  turbines and providing 14 of the nations
  electricity consumption.
• Wind farms 23 (600 MW) of Denmarks wind
  capacity is owned by co-operatives, with 100,000
  members owning over 3,200 turbines.
• In Denmark, 150,000 families are members of
  wind-energy co-operatives.
• Due to an average growth of 71 per year, Danish
  offshore wind capacity remains the highest per
  capita in Europe.

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Denmark

• By contrast, in 2004 the UKs installed capacity,
  for a population ten times that of Denmark, was
  777 MW.
• This comprised 90 projects, only one of which was
  owned by a co-operative, providing 0.5 of the
  UKs electricity.

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Denmark

• CHP/district heating 300 of the 400 district
  heating networks are owned by consumer
  co-operatives, ensuring accountability for a
  monopoly supply.
• Biomass fuel farmer co-operatives manage the
  fuel supply chain and own the majority of the 120
  straw and wood-fuel district-heating plants.
• Anaerobic digesters farmer co-operatives own
  over 20 large-scale digester plants providing
  farmers with a sustainable waste-management
  solution.

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Middelgrunden Co-operative, Denmark
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Middelgrunden Co-operative, Denmark

• The project has two owners Copenhagen Energy
  (the local utility owned by the Municipality of
  Copenhagen) and the Co-operative each taking
  possession of ten turbines.
• The Co-operative, assisted by government grant
  and through the Copenhagen Environment and Energy
  Office, contacted between 50,000 and 100,000
  people in the early stages. 10,000 local people
  committed cash, buying 30,000 pre-subscriptions
  at 7 each.
• Ultimately, 8,552 electricity consumers became
  shareholders, half of them subscribing for five
  shares (the maximum number to be given tax-free
  status).
• The cost of the Co-operatives share of the
  project was estimated at 23 million, giving a
  price per share of 570.

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Baywind Co-operative

• Baywind Energy Co-operative Ltd is an Industrial
  Provident Society and was formed in 1996 on the
  lines of co-operative models successfully
  pioneered in Scandinavia.
• The first two Baywind projects enabled a
  community in Cumbria to invest in local wind
  turbines.

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Baywind Co-operative

• The original board of directors included 7
  members of the community from Ulverston and
  Barrow. To date, members have received a
  competitive return on their investment from the
  sale of electricity.
• The first share offer in 1996/97 raised 1.2
  million to buy two turbines at the Harlock Hill
  wind farm. In 1998/99 the second share offer
  raised a further 670,000 to buy one turbine at
  the Haverigg II wind farm site.
• Preference is shown for local investors, so that
  the community can share some of the economic
  benefits from their local wind farm.

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Co-operative Community Schemes
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Co-operative Community Schemes

• Specialist Loan Funds
• www.co-operativeloanfund.co.uk
• www.icof.co.uk
• Specialist Investment Funds
• www.energy4all.co.uk
• 8million grant pot from WAG for community owned
  green energy gives 100k to 300k per project
• Industrial and Provident Societies easier share
  issue than Companies
• www.communityshares.org.uk
• IPS Shares are withdrawable, not tradeable

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Energy4All

• Energy prospects - latest share issue from
  Energy4All
• Will provide funds for work up to planning
  permission
• Investment 500 to 20,000
• Qualifies for Enterprise Investment Scheme tax
  relief

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Energy4All

• 7 wind co-ops stake in each
• Raised over 13m equity, from over 7,000 members
• Local energy conservation funds
• Pay attractive annual return
• Two Energy4All models
• 100 owned
• Stake (leased land)
• www.energy4all.co.uk

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• Alex Bird
• Chair, Co-operatives Mutuals Wales
• www.cooperatives-wales.coop
• alex_at_cooperatives-wales.coop