Hebridean wind farm helps community energy sector in Chile

Chilean community energy co-ordinator Francisco Merino Jofré met with wind farm developer Calum MacDonald and Point and Sandwick Trust general manager Donald John MacSween, chairman Norman Mackenzie and honorary president Angus McCormack.

In particular, Francisco received advice from Calum MacDonald about how to overcome financial barriers and begin persuading commercial lenders to invest in community projects.

Chile has a number of community-owned renewables projects in development – in solar, wind and hydro power – but these projects, although fully consented, are unable to proceed because they cannot get finance, due to a perception that community projects are higher risk.

Calum, who secured the £13 million finance for Beinn Ghrideag before the financial model existed for banks to invest in community groups, gave Francisco several key contacts in banking which should help the Chilean government to make a breakthrough and create a financial system for community projects.

Calum, also the former MP for the Western Isles, said it was “a great pleasure and honour to host Francisco at Point and Sandwick” and spoke of his hopes that the Chilean government would be able to follow up on the meeting and make progress with their community sector.

He also said: “We learned about the power of community energy from pioneering projects in places like Denmark and Germany where almost 50 per cent of all the turbines are now community owned. So it’s extremely satisfying as a Scottish community wind farm to think that we’re now passing on some of these lessons onto our colleagues in Chile and it’s very inspiring to think that there are rural communities in the remote parts of Chile that could be taking a lead from what we have achieved in the Western Isles.

“We’ve said it before but it’s worth stating over and over again – the Western Isles has the largest cluster of community-owned energy anywhere in Britain and they have brought in over £30 million of commercial investment into the islands, which is the highest investment by any industry in the islands’ history.

“I think we do have lessons to teach and it’s really gratifying that there are people reaching out from as far away as Chile to learn more about what we’ve done.”

Calum recognised that Chile’s biggest problem was trying to convince commercial investors like banks to lend to community-owned wind farms.

“That was a problem we had as well,” he said. “We know that problem very well because we faced it when the Co-op bank went out of business and they were the only people who were lending large sums of money to commercial energy in the UK. So we had to go banging on doors of various banks till we finally got one that was willing to take a punt on us.

“Now it’s different, of course. There’s a huge appetite out there for investing in community energy but as our Chilean colleagues were saying, getting that started is the hard bit – getting the ball rolling and breaking the glass ceiling for community energy companies.

“Once it’s done, then other financial institutions will follow and be keen to lend but creating that precedent is the hard thing. That’s the challenge that community groups in Chile now face and I’m confident that can be overcome.

“We gave Francisco contacts in the banking sector including the Spanish banking sector who are very active in Latin America so I’m hopeful that they’ll be able to follow that through and make some good progress on their projects.”

Francisco was in Lewis to meet with Point and Sandwick Trust for a knowledge exchange as part of a research trip to Scotland.

He visited a number of community projects around the country but said before the meeting that he believed Point and Sandwick Trust was “the best match for me to make the most of my visit and to strengthen the ongoing experience between the Chilean State and Scotland.”

He said the UK’s experience in renewables and its initiatives and policies were a model to follow for Chilean energy strategy, with his main interest being in what the community projects could teach in terms of local organisation, finance and community management. The intention was for his insights to lead to modifications in Chile that would affect industry, stakeholders and finance.

Speaking in a personal capacity afterwards, Francisco said the visit had been “very useful” as an exchange of knowledge about community energy and that he hoped it would be a link between the two countries, coming up as the next two hosts of the United Nations’ climate change summit – Chile in December 2019 as host of Cop25 and Scotland as host of Cop26.