Financing Community Energy Case Studies : Green Energy Mull

Cairns, Iain and Hannon, Matthew and Braunholtz-Speight, Tim and Hardy, Jeff and McLachlan, Carly and Mander, Sarah and Manderson, Edward and Sharmina, Maria (2020) Financing Community Energy Case Studies : Green Energy Mull. [Report]

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    Abstract

    This report presents the second of four case studies of UK community energy organisations conducted during 2018/19. These will later be included as part of a synthesis briefing alongside a series of sector-level interviews. The case study makes use of a combination of qualitative (e.g. interviews, organisation reports) and quantitative (e.g. financial reports) data. Summary of key lessons: Government subsidy is the cornerstone to securing both community and private finance. By providing a substantial long-term guaranteed revenue stream, the FiT allowed GEM to raise community investment and further investment from commercial and state-backed lenders. Even with the FiT in place, sourcing commercial finance was challenging. In its absence, it is unlikely that commercial lenders will lend. The ability to raise community finance is dependent on the affluence and population density of a locality. Unable to raise all the finance it needed from the community of Mull, the organisation was forced to access more expensive loan finance. Communities present important test beds for innovation, but direct long-term benefits may not be forthcoming. In its role as a trusted local organisation, GEM demonstrated an important role for community energy in facilitating innovation, but the extent to which it has been able to benefit from this is questionable. Partnerships with public landowners are critical to project delivery. Forestry and Land Scotland made land available for use by GEM, which was critical to their hydro scheme. Without this the project could not have taken place.