Co-operative Community
Schemes
Alex Bird
Chair, Co-operatives & Mutuals Wales
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
2
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
3
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
4
Co-operative Community Schemes
The Three Economic Sectors
First Sector
The Public 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
Third Sector
Hard to Define
Voluntary
Sector
Social
Economy
Voluntary
Organisations
Charities
Charities that
Trade
Social Enterprises
Community
Businesses
Building Societies
-
Voluntary
Groups
Tenants Groups
-
Campaigns
-
Self Help
Groups
Credit Unions
Worker Co-ops
Consumer Co-ops
Arts Centres
Enterprise
Agencies
ILMs
Second Sector
The Private Sector
Multi-Nationals
PLCs
Conglomerates
Offshore Companies
Private Companies
Partnerships
Ltd Partnerships
Sole Traders
Franchises
5
Co-operative Community Schemes
Co-ops governed by ICA principles
1.
2.
3.
4.
5.
6.
7.
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
6
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
7
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 nation’s electricity
consumption.
• Wind farms ~ 23% (600 MW) of Denmark’s wind
capacity is owned by co-operatives, with 100,000
members owning over 3,200 turbines.
• In Denmark, 150,000 families are members of windenergy co-operatives.
• Due to an average growth of 71% per year, Danish
offshore wind capacity remains the highest per
capita in Europe.
8
Denmark
• By contrast, in 2004 the UK’s 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 UK’s electricity.
9
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 wastemanagement solution.
10
Middelgrunden Co-operative, Denmark
11
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-operative’s share of the project was
estimated at €23 million, giving a price per share of €570.
12
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.
13
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.
14
15
Co-operative Community Schemes
16
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
17
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
18
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
19
Alex Bird
Chair, Co-operatives & Mutuals Wales
www.cooperatives-wales.coop
alex@cooperatives-wales.coop
20