Lochcarnan Community Windfarm

Lochcarnan Community Windfarm

In March 2012 The Lochcarnan Community Windfarm took a gigantic step forward when South Uist renewable Energy signed the finance agreement with co-op bank to finalise the funding package and allow the construction phase to commence.
The Lochcarnan Community Windfarm encompasses, three 2.3MW Enercon turbines, located along 3km of access tracks based at Iochdar Hill Common grazings in Loch Carnan, South Uist. This will be Scotland’s largest wholly community owned renewables project.
The project will supply electricity to the national grid, sold through Statkraft, and will generate an income for SURE. All profits generated by SURE will be passed to SnBM, the parent company, which is operated by an elected Board of Directors, on behalf of the 850 community members and the 2,900 residents of the South Uist Estate area. SnBM will re-invest the profits for and on behalf of the local community, in partnership with other local organisations.
It has been a long road getting to the construction phase, the initial feasibility was undertaken in 2007 as part of the investigation into the South Uist Community buy-out.
In 2008 when the Development Team was appointed the project progressed with the background work required to complete a full planning application being undertaken, including bird surveys, landscape and visual impact assessments, ecology and hydrology assessments. In 2009 a full planning application was approved by Comhairle nan Eilean Siar. (link)
Further progress was made in 2009 when HIPP approved £2.4m of ERDF funds towards the project and Social Investment Scotland approved £1m of loan and grant finance for the project. This gave the company a 30% equity stake required to secure commercial debt finance to take the project forward.
The project was delayed in 2010 when SSE issued the formal grid offer which was vastly reduced from what had been applied for in 2009. We worked with SSE to test the system capacity and model the load capacity of the grid. This established that even with the reduced offer the project could be supported on the local grid, which has a 14MW restriction.
In late 2010 work began in earnest to secure the full finance deal with co-op bank, worth around £8million. Securing this level of commercial finance requires a vast array of contracts, securities, agreements, financial models and tests, all of which is scrutinised by the Bank I its due diligence process.

The Co-op Bank said in March 2012 “The Co-operative Bank are very pleased to be associated with Scotland’s largest community owned wind farm. The bank will continue to support the development of onshore wind energy projects, particularly where there is community involvement. We look forward to seeing the project becoming operational and benefitting the local community for many years to come.” (John Puddephatt)

The project could not have progressed without the support of the Iochdar Hill Common grazing shareholders. In 2011 the shareholders were asked to sign consent to the temporary resumption of the footprint of the development site. We also issued a Section 5:3 agreement covering an area around the turbines, called the wind protection zone. We required 75% of the crofters to consent, and were overwhelmed when we received 95% consent. The applications were then passed by the Scottish Land Court. A rental payment will be made to the Grazings Committee annually for the area and when the project is decommissioned the land will be returned to crofting tenure.
Partners in the project are:

Finance
ERDF – £2.4m
SIS – £1.
Co-op – Bank £8m

The ERDF and SIS grants awarded in 2009, made this project possible, and ensures that the maximum return can be generated for the community for reinvestment in the economic and social regeneration of the area.

We are extremely grateful for this financial investment and in the support of the staff involved in piecing together the bits of funding jigsaw.

Technical

Greencat renewables supported SURE throughout the development phase of the project, undertaking wind assessments, designing roads, transport planning, planning information including construction methods, procurement. Greencat will continue to oversee the project as Clients Engineers.

Legal

SURE are indebted to Gillespie Macandrew for their input during the development phase of the project. Working alongside the staff and Directors to prepare, negotiate and understand all the legal documentation required to complete the deal. Gillespie MacAndrew will retain an involvement going forward.

Suppliers

RJ MacLeod will commence with the building of the access tracks in March 2012 (see link) RJM were selected as civil contractors following the extensive EU Public procurement compliant process we were obliged to undertake given the EU funding contribution to the project. RJM have significant experience in windfarm consturction.

Enercon will supply the three 2.3MW turbines, their ever popular E70 machines. (link to Enercon E70 page). The turbines are scheduled to arrive in July for installation in August 2012. The turbines will be transported by boat from the factory in Germany to Lochmaddy. Each turbine takes around 15 days to erect in good weather.

SSE

SSE will undertake all the electrical connection works for the site.

Timescale:
Construction on the windfarm will commence in March 2012, with the turbines being delivered in August 2012. The installation and commissioning will be complete in December 2012 and funds will be returned to the community early in 2013.

What Next:
Profits from the community windfarm will be gifted from SURE to SNBM. The board of SnBM are currently considering what the priorities for the re-investment should be. Community consultations began in December 2012 and will be continued in order to identify and prioritise future development projects for the company.

Relevant Documents;

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