Microgeneration: Communities target means of production
By Andrew Bounds
Published: May 26 2010 17:20 | Last updated: May 26 2010 17:20
Across the north-west, a radical idea is taking hold: for people to own the means of energy production. The vehicle for doing this, the co-operative, may be hundreds of years old, but proponents argue it is ideal for a new age of localised power generation.

The first community owned hydro-electric power station in the UK was built in New Mills, near Manchester, in 2008. The community raised more than £90,000 to help buy an Archimedes screw to place on a weir on the River Goyt. The 70kw plant generates enough power for up to 70 homes. It is sent directly to a local retailer, ensuring it is used locally.

The Co-operative Group, which runs the store that uses the energy, also provided £45,000 of finance, while hundreds of local people bought shares. Steve Welsh, managing director of H2Ope, the social enterprise backing the scheme, says: “People want to be able to do something practical about cutting carbon emissions and reducing our dependence on fossil fuels. This puts the power in their hands. “People get a return on their investment and they are benefiting the community.” Surplus proceeds will be given to community projects.

Nick Metcalfe, a healthcare manager, and his wife were among those who invested. “We saw some of the early publicity on it,” he says. “I walk over the bridge every day and it just seemed such a good idea and such an opportunity to do something for the environment.”

After another successful scheme in Settle, North Yorkshire, 2H2Ope is aiming to build two more in Stockport, costing £1m, one for a 54kw plant and one for a 75kw plant. They could power 130 homes and save 9,000 tonnes of carbon dioxide over their 40-year life.

Mr Welsh says: “It’s a lot of money to raise, but we’re confident that there are committed individuals who really support alternative energy.”

Previous schemes carried a 20 per cent tax break for investors. The government’s feed-in tariffs, which pay money for each kilowatt of power generated from renewable sources, will also increase returns.

The share offer closes on June 9. Chris Shearlock, is sustainable development manager at The Co-operative Group, one of the world’s largest consumer co-operatives, which is based in Manchester. He says: “There are hundreds of weirs across the north of England built for mills that could be used for similar projects. We just need to spread the model.”

The Co-op has given H2Ope £50,000 to host workshops to help people in the UK build their own schemes. Meanwhile, another co-operative is thinking even bigger, turning homes into mini power stations and linking them with a micro-grid around Manchester. Using social housing the Horizon Energy Co-operative aims to generate £20m in revenue from renewable energy a year; generating 250 megawatts of electricity.

Wind turbines and solar panels will be built on hundreds of social housing properties and high rise blocks will host wind and solar power. Each property has the potential to generate up to £900 worth of renewable energy a year.

The resulting energy will be pooled, with some distributed locally and some sold to the National Grid to generate funds.

The first initiative of its kind in England, the Horizon co-operative combines the EIC Partnership, a consultancy, and social housing management organisations. These include Stockport Homes, Guinness Northern Counties and Six Town Housing.

Michael O’Doherty, of Manchester City Council, which is also involved in delivering a government plan for a low carbon area in the city of 3.2m, says: “Greater Manchester has more than 250,000 social homes, 10 per cent of the national stock. So we can really make a difference.”

“The easy part has been done by fitting cavity and loft insulation in houses. But many have solid walls and more radical measures are needed to meet carbon reduction targets. “We are looking at a 15-year programme and the funding will run into billions,” he says. So it is vital for the housing stock to generate cash. The European Union is expected to provide some funding.

Andrew Melchior, managing director at EIC Partnership, believes the national grid, which transfers power around the country, would begin to fracture as generation became localised. He expects a return to the 19th century, when small private producers served local communities.

At Horizon, combined heat and power units, running on renewable wood or other biomass, would form the reliable baseload. Wind and solar would then supplement it with energy exported when there was a surplus. “With sufficient support, there is no reason we shouldn’t end up producing energy output equivalent to one quarter of a conventional nuclear- or coal-fired power station.”

It will not be easy: government policy may change and forming several entities into one co-operative will inevitably bring tensions.

But Mr Melchior says: “Whether you are a believer or a sceptic on the issue of global warming, our dependence as a species on finite fossil fuels for over 86 per cent of our energy generation is unsustainable.”