Feasibility Study New England Tablelands Community Wind Farm Final 20110921 LowRes

8/4/2019 Feasibility Study New England Tablelands Community Wind Farm Final 20110921 LowRes

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FINAL REPORT

NEW ENGLAND TABLELANDS

COMMUNITY WIND FARM

FEASIBILITY STUDY

AUGUST 2011


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1 EXECUTIVE SUMMARY

The purpose of the New England Tablelands Community Wind Farm Study was to assess

and determine the feasibility of a community co-operative based wind farm in the New

England Tablelands.

The Study was branded as 'New England Wind' to simplify public communications while

highlighting both the technology and region under consideration.

The clear message from the overwhelming majority of community and key stakeholders

was 'go for it'!

It is a great initiative and I hope it happens sooner rather than later.

A set of design principles for a successful community wind farm have been developed ~

addressing governance issues, turbine siting, operational management and scale. These

principles reflect the collective views of more than 1,300 people and organisations

directly involved in the Study, providing a substantial evidence base for the findings and

recommendations.

The Study recommends a hybrid dual entity legal structure to provide the strongest, most

feasible fit with the community's views. A range of different governance models were

considered.

The recommended hybrid structure would combine a co-operative and an unlisted

public company to attract maximum local participation, investment and support. It

would balance strong community governance through the co-operative while providing

a vehicle for commercial partnerships and larger investors through the unlisted public

company which would manage the wind farm operations.

It is recommended that an eight turbine wind farm be established, requiring $30m in

capital. This would produce sufficient electricity for 25,000 people and 9,000 dwellings ~close to half the residential load of the New England Tablelands.

An ambitious goal was found to be a key ingredient for the feasibility of the community

wind farm. Too small a goal risks being seen as tokenistic and lacking sufficient scale to

make a meaningful difference.

In this way the proposed scale and structure is intended to strike a pragmatic balance

between proving the capacity and support of the region to deliver a substantial wind

farm project and the strong desire, expressed consistently by hundreds of stakeholders

NEW ENGLAND TABLELANDS COMMUNITY WIND FARMPage 2 of 73


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and community members, for the long-term goal of full regional energy self-sufficiency.

One community-owned wind farm will only produce a small proportion of

the electricity needed, but it is a start. In due course we should aim to have100% renewable energy generated within the region, preferably from a

number of different sources...

There are several key elements to justifying this bold vision ~ the advantages of being a

designated Renewable Energy Precinct, availability of a quality wind resource, and a

large pipeline of approved and proposed commercial wind farm developments ~ which

together provide a momentum which New England Wind can 'slip-stream'.

Furthermore, the New

England has already

invested some $10-13m in

micro-generation with solar

PV and wind in the last three

years alone, demonstrating

real willingness to invest and

shift to sustainable energy.

This existing investment is of

similar magnitude to thatrequired for the proposed

community wind farm ~ with

the required $30m to be

one-third from each of local

community investors, larger

investors and borrowings.

A New England Tablelands community wind farm provides a compelling opportunity to

significantly advance energy self-sufficiency, leverage community, investor and public

funds, deliver substantial and measurable benefits including enhancing communityunderstanding and support for clean, renewable energy.

Can we please get started as soon as possible?

In this way a community wind farm would also benefit commercial wind development ~

through building community understanding, support and participation towards the need

for a large-scale uptake of renewable energy ~ which are key to successfully meeting

the NSW Government mandatory renewable energy target for electricity of 20% by 2020.


Illustration 1: Solar trackers & micro-wind, Kyabra


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TABLEOF CONTENTS

1Executive Summary.........................................................2

2Background..........................................................................72.1Renewable Energy Development..............................................7

2.2About the New England Tablelands.........................................8

2.3Community Renewable Energy................................................... 9

2.4New England Community Energy Initiatives......................10

2.5Scope of Study.....................................................................................10

2.6Funding......................................................................................................11

3Research Methodology.............................................123.1Steering Group.....................................................................................13

3.2Survey.........................................................................................................13

3.3Planning Forums...................................................................................14

3.4Research Streams...............................................................................15

3.4.1Defining Community.......................................................................153.4.2Case Studies & Models.......................................................................15

3.4.3DECCW Community Attitudes Research................................16

3.4.4Prospective Sites.....................................................................................16

3.4.5Legal and Governance Structures.............................................16

3.4.6Government Legislation, Policy & Programs................... ....... 16

3.4.7Technical Partnerships & Issues......................................................17

3.4.8Challenges & Risks.................................................................................17

3.4.9Investment & Investor Profiling........................................................17

4Results.....................................................................................184.1Steering Group.....................................................................................18

4.2Survey.........................................................................................................23

4.3Planning Forums...................................................................................27

4.4Defining Community....................................................................29

4.5Case Studies & Models.................................................................... 294.6DECCW Community Attitudes Research ........................ ...31

4.7Prospective Sites..................................................................................31

4.8Legal and Governance Structures.......................................... 32

4.8.1NSW Co-operative................................................................................33

4.8.2Unlisted Public Company.................................................................34

4.8.3Hybrid................................... .................... .................... .................... ....... ...... 34

4.9Government Legislation, Policy & Programs......................35

4.9.1Financial Support...................................................................................35

4.9.2Planning Requirements.......................................................................36

4.9.3New England Local Government................................................37

4.10Technical & Other Partnerships................................................38

4.10.1Commercial & Technical Partnerships............................. ....... 38

4.10.2Local Government.............................................................................39

4.10.3Funding Body ~ New England Renewable Energy

Precinct, DECCW.............................................................................................40

4.11Challenges & Risks............................................................................41

4.12Investment & Investor Profiling..................................................46

4.12.1Investor Forum.......................................................................................47

4.12.2Comparison with Hepburn Wind...............................................48

4.12.3Professional Investors.........................................................................50

4.12.4Fund Raising Research.....................................................................50

5Design Principles.............................................................525.1.1Governance & Ownership................................................................52

5.1.2Wind Farm Operations........................................................................54

5.1.3Community Benefits, Knowledge & Understanding......... .55

6Recommendations........................................................576.1Feasible Options..................................................................................57

6.2Replicability of Hepburn Wind....................................................58

6.3Recommended Option..................................................................59

6.3.1New England Energy...........................................................................59

6.3.2New England Wind...............................................................................62

6.3.3Capital Structure....................................................................................63

6.3.4Common Principles...............................................................................64

6.4Local Government.............................................................................64

6.5Identifying Community...............................................................64

7Conditions to Initiate New England Wind......657.1Steering Group & Secretariat.................................................... ..65

7.2Seed Funding................................................................................. .......65

7.3NSW Government Support............................................................66

7.4Consolidate & Extend Technical & ProfessionalPartnerships...................................................................................................67

7.5Strengthen Community Involvement & Support..............67

7.5.1Community Benefits Plan..................................................................67

7.5.2Social Marketing Campaign ~ Knowledge &

Understanding..................... .................... .................... ................... .................... 68

7.5.3Wind Farm Study Tours........................................................................69

7.6Legal Formation & Fund Raising................................................69

7.6.1Sweat Capital & In-Kind Contributions.....................................70

7.7Site Short Listing & Feasibility.........................................................70

7.8Prospectus...............................................................................................70

8Advice for Other Communities.............................718.1Planning....................................................................................................71

8.2Participation...........................................................................................71

8.3People & Partnerships.......................................................................72

8.4Pragmatism.............................................................................................73

8.5Paradigms & Perceptions...............................................................73

8.6Pay...............................................................................................................74

9Acknowledgements.....................................................75

10About Starfish Enterprises........................................76

11Appendices.....................................................................7711.1Appendix 1 ~ Attachments.......................................................77

11.2Appendix 2 ~ Community Renewable Energy

Research Report, Community Power Agency........................77

11.3Appendix 3 ~ Survey Findings................................................ ..77

11.4Appendix 4 ~ Planning Forum Presentation: Glen

Innes Community Forum.......................................................................7711.5Appendix 5 ~ Participatory Planning Forums Analysis

..............................................................................................................................77

11.6Appendix 6 ~ Governance Models Options Analysis

..............................................................................................................................77

11.7Appendix 7 ~ Co-operative Structures, Environmental

Defenders Office (Northern Rivers)...............................................77

11.8Appendix 8 ~ Hybrid Legal Structures, Wilson & Co

Lawyers............................................................................................................77

11.9Appendix 9 ~ Hepburn Wind Investor Profile, Nicky

Ison.....................................................................................................................77



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ILLUSTRATION INDEX

Illustration 1: Solar trackers & micro-wind, Kyabra........ ...3

Illustration 2: Global installed wind power capacity,

Global Wind Energy Council.........................................................6

Illustration 3: New England Tablelands BioRegion, NSW

Government Office of Environment & Heritage...............7

Illustration 4: Public Launch of New England Wind

Study, New England Wind Consortium.................................12

Illustration 5: Welcome page ~ Qualtrics online survey,

courtesy University of New England.......................................13

Illustration 6: Survey Working Group (Left to Right):..... .18

Illustration 7: SLA website promotion......................................19

Illustration 8: Word Analysis ~ The first thing that comes

to mind when you think about wind farms in the New

England.....................................................................................................20

Illustration 9: How well does wind power perform

compared to other forms of electricity?.............................21

Illustration 10: Why source electricity close to our

region?.......................................................................................................22

Illustration 11: Armidale Community Forum...................... .23

Illustration 12: Community wind farm benefits ~

Planning Forums (Consolidated)...............................................24

Illustration 13: Landholder Forums hosted with

Landcare ~ Kyabra & Walcha...................................................27

Illustration 14: Deputy Mayor, Councillor Jim Maher,

Armidale Dumaresq Council, Armidale Community

Forum..........................................................................................................35

Illustration 15: Joint a-frame for public displays (front &

back)............................... .................. .................. ................... ....... ...... ...... . 36

Illustration 16: Uralla Community Forum ~ Interest to

invest.......................... ................... .................. .................. ................... ....... 42

Illustration 17: Importance of different reasons for

investing....................................................................................................43

Illustration 18: Community Survey ~ How much would

you be willing to consider investing?.....................................44

Illustration 19: Hepburn Wind Investor Profile (1).............45

Illustration 20: Hepburn Wind Investor Profile (2).............45

Illustration 21: Community Survey ~ What kinds of

landscape are suitable for wind turbines?.........................51

Illustration 22: Recommended governance structure

.................. .................. .................. ................... .................. ................... ......... . 57

Illustration 23: Wind farm development timeline ~

Kyoto Energy Park, Parmada......................................................61

Illustration 24: Community Survey ~ Rate the

importance of the following benefits from a

'community-owned' wind farm................................................64

Illustration 25: Origami windmill campaign........................64

Illustration 26: Glen Innes Community Forum...................68



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2 BACKGROUND

2.1 R ENEWABLEENERGYDEVELOPMENT

The New England Tablelands is an identified priority area for renewable energy due to its

high quality wind resource and electricity grid infrastructure. It forms part of the NSW

Government New England North West Renewable Energy Precinct.

One wind farm is currently approved for the New England Tablelands (Glen Innes, 44-

81MW) with a further three wind farms in development (Ben Lomond Wind Farm, 165MW;

Sapphire Wind Farm, 356-485MW; White Rock Wind Farm, 150MW).

Wind power is widely recognised as the only renewable energy technology that is

commercially proven and scalable to meet growing demand for electricity with

negligible carbon footprint.

South Australia sources some 20% of its electricity from wind energy, demonstrating the

ability of current grid architecture to match demand with wind power generation. South

Australia plans to meet 33% of its electricity from wind by 2020, comparable with

Germany who already source nearly 30% from wind.

NSW currently sources 0.25% of electricity from wind power.


Illustration 2: Global installed wind power capacity, Global Wind Energy Council


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2.2 ABOUTTHENEWENGLANDTABLELANDS

The New England Tablelands BioRegion has a population of 53,000 and around 18,000

dwellings. It covers an area of 3 million hectares which is largely (95%) within NSW. The

Tablelands are the largest highland area in Australia and the only one to include a city

(Armidale).

Large sections of the Tablelands are 800m above sea level, and many areas rise above

1,000m. The highest point is Round Mountain in Cathedral Rock National Park which is

1,586m above sea level.

The region contains a number of large agricultural properties, is mostly sparsely settled,

and has a recognised potential for the production of energy from wind.


Illustration 3: New England Tablelands BioRegion, NSW Government Office of

Environment & Heritage


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2.3 C OMMUNITYRENEWABLEENERGY

Community renewable energy is a discrete segment of the renewable energy sector.

Community wind power projects in Denmark played a pivotal role in kick-starting the

commercial wind power industry. Denmark is now a global leader in wind turbine design

and manufacture.

While community renewable energy is a relatively new concept in Australia, it is a

substantial segment in Western Europe and Northern America. For example, community

and co-operative owned energy in Germany accounts for 8% of electricity generation

and employs some 90,000 people.

Hepburn Wind is Australia's first community wind farm, with Denmark, Western Australia,likely to be the second.

The use of the term community in this context can incorporate the following principles1:

Ownership and governing influence;

Scaling to meet local energy demand and/or supply;

Involvement of community members, organisations and stakeholders in the project

design and development; and,

Accruing of benefits to the community such as employment, ownership, financial

and energy returns.

In addition to the general benefits of renewable energy, certain further advantages and

benefits arise from community renewable energy initiatives:

Community ownership and leadership, with flow on effects to renewable energy

more generally (as was the case in Denmark);

Community support, participation and benefits distinguishing such enterprises from

the conflict which can characterise commercial wind development;

Community-owned asset, financial returns for community priorities, local and

sustainable electricity, green collar employment and supply-chain business;

Community education and capabilities in energy, governance; and, Demonstrating a best practice model for community involvement and social

license to operate.

1 Appendix 2 ~ Community Renewable Energy Research Report, Community Power Agency, pp.

3-8.



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2.4 N EWENGLANDCOMMUNITYENERGY INITIATIVES

There have been significant community-oriented renewable energy initiatives in the New

England.

Farming the Sun2, Australia's largest community solar enterprise and coordinated by

Starfish Enterprises, has directly supported the uptake of $6.5m worth of solar energy

systems since late 2008. This initiative utilised the NSW Government Solar Bonus Scheme

and Australian Government Solar Credits and Solar Homes and Communities Programs.

A similar amount of solar systems were taken up across the region through private

companies.

The need for 'New Energy' is an identified priority in the recently completed New

England Sustainability Strategy3. The Strategy took two and a half years to develop with

direct involvement of some 1,000 stakeholders.

Three local community groups are working for the regional uptake of renewable energy:

Sustainable Living Armidale through their Renewable Energy Reference Group

working on community-scale initiatives and their local Energy Group focussed on

the city of Armidale;

U3CF ~ Uralla Community Climate Change Forum is a formal Uralla Shire Council

sub-committee working on energy matters relating to climate change; and, Southern New England Landcare's High Country Urban Biodiversity Project (HiCUB)

is working to improve the uptake of alternative energy technology.

2.5 S COPEOFSTUDY

The purpose of the New England Community Wind Farm Study was to examine the

feasibility of a community co-operative based wind farm in the New England Tablelands,

with the capacity to generate between 4MW and 10 MW.

The scope of the study included:

Identifying potential for participation by landholders and local residents, leading

to recommendations to maximise participation by local financial institutions,

Landcare, landholder groups, community groups and local government;

2 Appendix 1 ~ Attachments, pp. 4-5.

3 Appendix 1 ~ Attachments, p. 6.



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Identifying the best vehicle for raising investment and development funds,

recommending arrangements to attract community investment in partnership with

commercial interests;

Researching the most appropriate co-operative structure(s) for the venture; Recommending arrangements to fairly and effectively manage risks across

different stages from pre-planning approval through construction and operation;

An assessment of the replicability of the Hepburn Wind Farm in Victoria;

An assessment of the applicability of any relevant existing co-operatives and

similar arrangements, both within the Precinct ,and elsewhere in Australia and

overseas; and,

Study of relevant Australian, State and Local Government legislation, regulation

and programs.

The scope did not extend to assessing the feasibility of a wind farm at a particular site

through wind speed monitoring, grid connection etc. Rather, the Study was based on the

assumption that the conditions for a successful medium size wind farm exist, founded on

wind speed levels and consistency.

This Final Report also contains recommendations and protocols which can assist the

development of similar community renewable energy initiatives in other NSW

Government Renewable Energy Precincts.

2.6 F UNDING

The Study was funded utilising NSW Department of Fair Trading's Cooperative Research

funding, matched with funding from:

NSW Office of Environment and Heritage;

The Community Mutual Group;

Sustainable Living Armidale;

Farming the Sunand Starfish Enterprises.



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3 RESEARCH METHODOLOGY

The research methodology to assess and determine the feasibility for a community wind

farm was particularly designed to determine a structure which would:

maximise participation by local financial institutions, landcare and landholder

groups, community groups and local government; and,

attract community investment, potential commercial partnerships and interests to

support capital raising and project management.

A range of methods tailored to the diverse audiences with common themes being:

Assessing the potential for participation by landholders, local residents and

partners;

Identifying ways to fairly, effectively manage risks across different stages from pre-planning approval through construction and operation;

Mapping key issues, guidelines and design principles; and,

Considering opportunities and best vehicles for raising investment and

development funds.

The major milestones4 detail the timing and key activities in the following areas:

Steering Group partners and network ~ its formation, meetings and strategic

decision making;

Community network development to maximise reach and participation;

Potential for participation (by landholders, the community and professional

investors) through community planning forums and one-on-one meetings;

Nine research streams (considering co-operative and other legal structures,

investment vehicles, government legislation and policy at all levels) of desk-top

literature searches and professional advice;

Risks, principles and opportunities were key considerations included in the online

survey and each of the above streams of work;

Documenting and communicating the research process and outcomes to

maximise profile, reach and generate further support and participation;

Long-term potential partnerships were investigated with legal, electricity buyers,marketing professionals, and turbine technology providers; and,

Starfish Enterprises' overall governance and coordination of the Study.




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3.1 S TEERINGGROUP

The Steering Group, known as the New England Wind Consortium, was formalised at the

commencement of the Study, following their 'in principle' agreement to be involved in

the tender process.

This Group brought specialist

expertise and broad networks

to the overall Study planning,

coordination, analysis and key

strategic decisions regarding

the research findings, feasibility

of the community wind farm

and recommendations5

.

The Steering Group fulfilled the

following responsibilities for the

Study:

Development of the

Feasibility Study Plans,

Research and Legal

Advice Briefings, Partner Roles and Responsibilities, Promotion and

Communications Plan;

Analysis of Findings from the Community Survey, Legal Advice and Community

Renewable Energy Case Studies Research; and,

Determination of the Recommendations detailed later in this report.

3.2 S URVEY6

The project survey was designed to build upon findings from the existing DECCW

Community Attitudes research, using Qualtrics survey software provided by The University

of New England.

As an online tool the survey was the key research strategy to enable participation of

larger numbers of community members, investors and stakeholders. It was promoted

throughout every stream of work to maximise take-up.


6 Appendix 3 ~ Survey Findings


Illustration 4: Public Launch of New England Wind Study, New

England Wind Consortium


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Key components of the survey were:

General views regarding wind farms;

Preferences for different sources of electricity, including wind;

Relative importance of local generation and community ownership; Views on what the inclusions should be for the definition of New England

Community;

Siting principles for turbines;

Identification of risks and other issues; and,

Willingness to invest, purchase electricity and host wind turbines.

3.3 P LANNINGFORUMS

A series of nine Community Forums were held across the Tablelands:

Community forums in Armidale, Uralla, Kyabra, Walcha and Glen Innes ~ reaching

a wide selection of potential investors, landholders and the community.

Nearly 200 attendees were involved with Armidale being the largest

(hosted by Armidale Dumaresq Council in the Town Hall).


Illustration 5: Welcome page ~ Qualtrics online survey, courtesy

University of New England


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A dedicated Investor Forum hosted by Community Mutual Group;

Two educational institute forums including The University of New England; and,

A Northern Region of Aboriginal Land Councils forum in Tamworth.

Each forum7 covered:

Major benefits, advantages and opportunities of a community wind farm;

Key risks and challenges;

Key design, structure and governance principles;

Interest to become a member and/or investor; and,

Priority next steps.

The planning forum process is an innovative open dialogue facilitated to include

perspectives from every attendee and draw out their understanding and views, positive

and negative, without any significant influence from the facilitators. This method provides

truer guidance on the perspective of the community without the use of leading

questions or pre-determined information. For example, the opening presentation8 to set

the scene for the forums was carefully designed to provide the minimum details to frame

the discussion and no more.

This method is distinctly different to the prevailing paradigm of 'community consultation'.

3.4 R ESEARCHSTREAMS

3.4.1 D EFININGCOMMUNITY

A literature research was undertaken to analyse definitions of community generally and

as applied to community renewable energy initiatives.

3.4.2 C ASESTUDIES& MODELS

Desk-top research considered 24 Australian and international community renewable

energy initiatives, assessing legal and governance structures, community benefit models,electricity sale, capital and fund raising as well as the significance of the community

renewable energy segment generally.

The researchers drew on their first hand study of community renewable energy projects

in Europe and Northern America.


8 Appendix 4 ~ Planning Forum Presentation, Glen Innes Community Forum



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3.4.3 DECCW COMMUNITYATTITUDESRESEARCH

Further analysis of the data for New England respondents to the DECCW Community

Attitudes Research9 was undertaken with the agreement of the NSW Office ofEnvironment & Heritage.

3.4.4 P ROSPECTIVESITES

Prospective sites were identified through the Community Survey10, requests made through

the media and other communications and Expressions of Interest collected at

Participatory Planning Forums and other events.

3.4.5 L EGALANDGOVERNANCESTRUCTURES

Four streams of advice11 were collected to address a range of potential legal, financial

and governance structures:

1. Hybrid legal structures including an unlisted public company;

2. Co-operative legal structures and the replicability of the Hepburn Wind co-

operative model in NSW considering the existing knowledge base about Hepburn

Wind on the Embark Wiki;

3. Australian and International community renewable energy models and case

studies; and,

4. Peer review of this advice by Embark, including assessment of legal andgovernance research structures to ensure it complemented the existing

knowledge base on the Embark Wiki.

3.4.6 G OVERNMENTLEGISLATION, POLICY& PROGRAMS

Desk-top research was undertaken to identify relevant NSW and Australian Government

legislation, policy and programs.

Policy recommendations were developed taking into consideration internationalframeworks supporting community renewable energy.

9 Community Attitudes to Wind Farms in NSW, Department of Environment, Climate Change and

Water NSW, AMR Interactive, September 2010

10 Appendix 3 ~ Survey Findings, p. 20.




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3.4.7 T ECHNICALPARTNERSHIPS& ISSUES

The technical feasibility of a community wind farm was tested in discussions with

professional services across commercial and community wind and renewable energy.

Participants included developers, grid operators, project managers, turbine retailers, and

representatives from construction, electricity purchase and retailers, investment and

financial services.

3.4.8 C HALLENGES& RISKS

Literature research complemented the Survey and Forum streams in identifying general

wind farm challenges and risks, community wind farms challenges and risks and those

unique to the New England Tablelands.

3.4.9 I NVESTMENT& INVESTORPROFILING

Selected aspects of the Hepburn Wind investor database were analysed, de-identified

to maintain investor confidentiality, to profile key investment demographics and

characteristics of community renewable energy investors.

Discussions with potential local investors and financial groups were combined with

approaches to ethical investment and superannuation specialists to assess fund raising

opportunities.

The community survey included questions about likely investment and reasons for

investing, supplemented by a question about in principle support and investment raised

at each planning forum.



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4 RESULTS

A key objective of the Feasibility Study was to determine whether there is sufficient

support ~ community, investor, landholder, professional and commercial partnerships ~

for the successful establishment of a community wind farm.

The overwhelming response was positive and supportive ~ in terms of general support

through to more tangible measures such as indicative investment, willingness to host

turbines and partnerships.

This finding reflects the views of more than 1,30012 people directly involved. This

substantial level of participation was a direct outcome of the profile afforded the Study

by media, promotions and partner communication activities to ensure the widestpossible participation, audience and awareness of the opportunity to contribute their

views13.

This support does however come with conditions. Throughout the Study evidence was

gathered regarding what the key principles would be for an acceptable wind farm.

These design principles are detailed in Section 5.

Concurrent with assessing community support and conditions several streams of

professional advice were obtained with regards to legal and governance structures as

well as analysis of other community renewable energy projects (wind and solar) from

Australia and internationally.

4.1 S TEERINGGROUP

The partners involved with the Steering Group brought a diversity of expertise and

contributions.

Individual contributions by the Steering Group Partners included:

The Community Mutual Group (TCMG) co-funded this Feasibility Study, hosted adedicated forum for investors and participated in nearly every public event. A

further Focus Group will be held with CMG staff and stakeholders regarding the

Findings and Recommendations detailed in this report.

Environmental Defenders' Office (NSW) provided legal advice on NSW Co-

Operative structures, the transferability of Hepburn Wind's Victorian Co-operative

structure, and their application to a community wind farm operation.


13 Appendix 1 ~ Attachments, pp. 17-21.



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Wilson & Co Lawyers contributed direct professional expertise relating to hybrid

structures and a stake holding model to enable valuation and conversion of non-

cash contributions and support for the wind farm (eg. in-kind and pro-bono; sweat

capital, discounted services; beneficiaries and affected parties such asneighbours) into share/stake holding.

Southern New England Landcare (SNELC) & High Country Urban Biodiversity Project

(HiCUB) hosted two community forums ~ Walcha & Kyabra ~ made presentations

to their Board and have supported promotion with media releases, newsletters,

email announcements and website links. Numerous landholders interested in

hosting wind turbines have been reached through the SNELC/HiCUB network.

Embark & Hepburn Wind contributed significant expertise and mentoring,

particularly reviewing planning documents and the research matrix. The

opportunity to analyse the Hepburn Wind investor database was of significant

value. Embark have offered to provide in-kind support with desk-top analysis of

possible wind sites at the appropriate time and have indicated that New England

Wind is strongly placed to compete for a share in an upcoming seed funding

round.

The University of New England (UNE) contributed expertise and software for the

Online Survey as well as promotion throughout their organisation. Two dedicated

forums have been held with UNE ~ one with facilities management hosted by New

England Wind and the other hosted by the Renewable Energy Precinct, focussed

on development of a renewable energy research institute allied to a community

cooperative wind farm.


Illustration 6: Survey Working Group (Left to Right):

Adam Blakester, Ray South, Assoc. Professor Don Hine, Patsy Asch, Bar Finch, Liz Gardiner, Glenda

Kupczyk-Romanczuk, Methuen Morgan, Mahalath Halperin


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Armidale District Chamber of Commerce contributed promotional support to

convene a Business Focus Group to analyse the Preliminary Findings.

Sustainable Living Armidale (SLA) co-funded the Study and hosted the largest

community forum, held in Armidale Town Hall and attended by more than 80people. A dedicated round table discussion was held with their Energy Working

Group and they provided in-kind support with an email listserver (RenewRefGroup)

and have promoted New England Wind with media releases, newsletters, website

links (pictured below) and a poll.

4.2 S URVEY14

Nearly 600 responses were received to the community survey and the findings provided

an extensive data set identifying both levels of support and interest to participate as well

as a wide range of community views on electricity, energy generation and wind power

which are especially pertinent to the design principles (detailed in Section 5) for the

community wind farm.



Illustration 7: SLA website promotion


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The major findings of the community survey were:

Emphatic support for the proposition of a community wind farm. Over 90% strongly

agreed or agreed that they would like a community owned wind farm and 75%

self-assessed as positive the first thing that comes to mind (word analysis below,with larger word sizes reflecting multiple respondents using exactly the same word,

spelling and capitalisation) when they think about wind farms in the New England;

Wind, followed by solar, was rated as the most preferred way to generate

electricity for the New England. Coal, gas and nuclear were rated extremely low;

Wind power was positively rated across a wide range of key power generation

characteristics (graphed on following page);


Illustration 8: Word Analysis ~ The first thing that comes to mind when you think about wind farms

in the New England


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NEW ENGLAND TABLELANDS COMMUNITY WIND FARM Page 21 of 73

Illustration 9: How well does wind power perform compared to other forms of electricity?


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More than 95% of respondents believe it is very important or important to source,

produce and use energy available in or close to our region. Their reasons given

are analysed below, with larger word sizes reflecting multiple respondents using

exactly the same word, spelling and capitalisation;

350+ confirmed their interest in purchasing the electricity generated;

340+

indicated their interest in investment totalling $3m; 235 expressed interest to visit a working wind farm;

90 were interested to find out more about hosting turbines on their property;

Clarification of desired definition for 'community' in terms of community ownership,

governance and benefits from the wind farm; and,

Clarification of key issues with regards to turbine siting (distance from dwellings,

visibility, type of landscape, etc.) which are incorporated into the design principles

later in this report.


Illustration 10: Why source electricity close to our region?


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More than 300 respondents answered the very last question to add 'anything else' they

would like to say about a New England community wind farm. This level of voluntary

response at the end of a lengthy and thorough survey reiterates further supports the

keen level of interest. Their responses were strongly positive15

.

4.3 P LANNINGFORUMS16

Nearly 200 people and organisations participated in the nine Planning Forums. As open

discussions these forums provide a rich resource of information regarding the

community's current understanding of wind power and related electricity issues. More

than 20 hours of video footage has been recorded and analysed to validate and

supplement the written responses and white-board note taking during the forums.

The major findings from the Forums are incorporated into the design principles (refer

Section 5) for the community wind farm rather than repeated here. The challenges and

risks identified have been consolidated with those identified in other streams of research

and are presented later in this section.

The recurring message which came through most strongly was the desire and aspiration

for energy independence, consistent with the community survey responses, while at the

same time expressing strong support for the establishment of New England Tablelands

community wind farm as being a significant step towards this long-term goal.


16 Appendix 5 ~ Participatory Planning Forums Analysis


Illustration 11: Armidale Community Forum


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From a governance and structural perspective this finding prompts the need to ensure

that the super structure of the legal model can support and progress a multi-staged

approach towards the long-term goal of energy independence as well being able to

deliver an immediate community wind farm project.

The benefits and advantages of a community wind farm are analysed and presented in

the world analysis below (with larger word sizes reflecting multiple respondents using

exactly the same word, spelling and capitalisation) ~ with clear emphasis on the benefits

of community ownership, clean energy with a low environmental footprint that generates

local employment and independence.


Illustration 12: Community wind farm benefits ~ Planning Forums (Consolidated)


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4.4 D EFININGCOMMUNITY17

The meaning given to 'community' is a key element of the community wind farm in terms

of defining the boundaries (inclusion and exclusion) for the purpose of ownership,

governance, decision-making; as well as for the purpose of the return of benefits,

particularly those to the wider community and beyond the direct parties to the wind

farm such as shareholders, employees, suppliers, landholders and electricity users.

The clear finding was to define community as those persons and organisations that

have a clear local residence, stake or ownership in the New England Tablelands or

Region18, who are:

Local ~ in terms of the social, cultural and geographic identity of the New

England Region, NSW, Australia; and, Individuals ~ those who live or own land in the New England; or,

Organisations ~ businesses owned by local people and local organisations such

as superannuation funds, family trusts or community organisations with local

governance.

As detailed elsewhere in this report there was a clear requirement for any New England

community wind farm to be governed by the community, implying that the majority of

ownership, investors and benefits would accrue to the community as defined above.

By contrast this means that a minority of investors could come from outside thecommunity as defined, while ensuring that the risk of these outside interests gaining

control was managed and precluded.

4.5 C ASESTUDIES& MODELS19

Twenty-four Australian and international community wind farm and renewable energy

projects were assessed in regards to their:

Definitions of 'community' and 'community renewable energy';

Legal and governance models; and, Capital and fund raising.

Each of these findings are incorporated into the relevant sections of this report.20

17 Appendix 2 ~ Community Renewable Energy Research Report, Community Power Agency



20 Definition of Community, Section 4.4; Legal and Governance Structures, Section 4.8; Investment,

Section 4.12; Seed Funding, Section 7.2



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Advantages of community renewable energy were identified as being:

Building community resilience and empowerment;

Building a strong movement of action on climate change;

Developing the renewable energy industry; Supporting rural and regional communities and fostering local economic

development; and,

Enabling action on many values and goals simultaneously.

The broad variety of different community renewable energy projects underlines the

critical importance of ensuring the definition applied for the New England Tablelands' is

strongly aligned with community and stakeholder needs and aspirations (as defined

above). The following list highlights this breadth of purpose and structure:

Middelgrunden Wind Turbine Co-operative ~ a joint venture between

Copenhagen and wider Danish residents and the municipal utility with 8,500 local

members;

MinWind I-IX ~ nine separate corporations running 1-2 turbine wind farms, each

owned by 33 local farmer-investors in Minnesota, USA;

Hepburn Wind ~ a co-operative-run wind farm with majority local people of

Daylesford shire in Victoria as shareholders which contributes money to a

Community Sustainability Fund;

Ellensburg Community Solar ~ a solar installation organised and run by the

municipal utility, a local university and a local environment group in Washington

state, USA, in which local residents of are investors; Mt Barker Community Wind Farm ~ a wind farm sized to the demand of the local

community of Mt Barker, Western Australia, though owned by a company with

majority corporate and non-local, even international, investors;

Baywind Wind Co-operative ~ initially a joint venture between a wind developer

and a co-operative of Cumbrian and wider UK residents, with a small community

fund for energy efficiency projects in the Cumbrian community;

Westray ~ a one turbine wind development, owned by the Westray Development

Trust, whose membership is open to any adult on the island of Westray, UK; and,

Dardesheim Wind Farm ~ a large wind farm in Germany , predominantly owned

by a developer, with shareholding opened up to local community members, a

small percentage of the wind-farm revenue also goes to the town council.



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4.6 DECCW COMMUNITYATTITUDESRESEARCH

Ninety-five New England responses were extracted and analysed from the NSW-wide

DECCW Community Attitudes Research.

The key findings regarding the views of the New England respondents were:

Strong support for wind farms though only modest support for wind power as an

'acceptable' power source (solar and hydro received the strongest levels of

support of the clean and renewable power sources);

Strong levels of support for wind farms within 10kms of own property and

moderate support if located 1-2kms from own property;

Moderate levels of understanding of wind power;

Significant levels of concern regarding safety, noise and health impacts of windfarms; and,

A desire for more information and consultation from government.

4.7 P ROSPECTIVESITES

A sufficient number of potential sites were identified and collected to confirm the

assumption that conditions for a successful medium size wind farm existed and more

importantly could be translated into reality.

More than 110 landholders have expressed interest in hosting turbines, from thecommunity survey21 and other direct contact with landholders.

Several of these sites are strongly aligned with the design principles detailed above.

21 Appendix 3 ~ Survey Findings, p. 20.


Illustration 13: Landholder Forums hosted with Landcare ~ Kyabra & Walcha


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4.8 L EGALANDGOVERNANCESTRUCTURES

Wilson & Co Lawyers, NSW Environmental Defender's Office, Embark and the Community

Power Agency identified possible governance structures, legal and finance models for

the community wind farm22.

The Steering Group considered the various options in determining the recommended

structure detailed later in this report. The key consideration was the best legal and

governance structure to meet the design principles from the community planning

process.

While nine possible models were identified23 from the wide range of community

renewable energy projects from Australia and around the world, three legal structureswere considered feasible, being:

1. NSW Co-operative;

2. Unlisted Public Company; or,

3. Hybrid of NSW Co-operative and Unlisted Public Company.

A key finding was that in technical terms any of the above models could be suitable for

a community wind farm operation. While there are of course technical differences in

how they function and the relevant legislative regimes they are subject to, these are not

necessarily materially significant.

Further, both legal teams advised that any constitution could be tailored to fit the

specific design principles for a community wind farm. It was their view that there is

sufficient flexibility within the various legal structures and legislation to accommodate

requirements. This is in direct contrast to the prevailing perception that a community

wind farm would need to fit within inflexible structures.

Rather, what distinguishes structural strengths and applicability are matters of perceived

appropriateness:

There is a widely held belief and view that community governance, ownership,

decision-making and interests are best achieved and protected within a co-

operative structure;

Corporations, business, professional investors and government are generally

believed to be more comfortable with the transparency and accountability

required by the standards placed on an unlisted public company structure and

the national legislation of the Corporations Act (2001).

22 Appendix 6 ~ Governance Models Options Analysis




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To quote the Environmental Defender's Office advice:

Co-operatives and public companies tend to provide the most successful

outcomes for community projects. However each has benefits and

drawbacks. In general, it has been said that the co-operative structure hasbeen popular with local communities, who seek benefits other than simply a

return on share capital. However, corporate or institutional investors often

prefer the public company structure, as it focuses on generating a return on

their share capital.

[The New England community wind farm] must determine what priorities it

has, in terms of delivering its design and innovation. This will include the

ideological framework within which it is intending to operate.

4.8.1 NSW CO-OPERATIVE24

To paraphrase key findings from the legal advices:

Co-operatives are unique in that they generally require 'active membership' on

the part of the member. For example, in order to remain an active member of

Hepburn Community Wind Park Co-operative Limited a member: (a) must

purchase or consume energy generated directly or indirectly by the Co-

operative; or (b) subscribe to the Co-operative s information advisory service

relating to energy usage and efficiency; or (c) subscribe to the Co-operative s

newsletter. Co-operatives are democratic institutions and each member has one vote only,

irrespective of how many shares they hold.

Importantly, the legislation in NSW is very similar to that in Victoria and so were the

New England project to model itself on the Hepburn Wind project there would be

no great differences in terms of the legal form of the co-operative.

Provisions specifically prohibit cooperatives from carrying on business across

borders without approval from the local Registrar of Cooperatives. Compliance

with these approval requirements imposes costs on cooperatives which place

them at a competitive disadvantage to companies.

The main difference between a director of a co-operative and a director of a

company is that the director of a co-operative must also be a member of the co-

operative. This is qualified in that a co-operative can have one non-member

director for every three member directors.

International network and common co-operative principles as adopted by the

International Co-operative Alliance (ICA) apply to NSW Co-operatives.

24 Appendix 7 ~ Co-operative Structures, Environmental Defenders Office (Northern Rivers)



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Changes to the rules of a co-operative may be made by special resolution of the

members or by resolution of the board subject to approval of the Registrar. Such

alterations to the rules of the co-operative are likely to be more difficult to

achieve than would be the case for a public company. Compliance requirements of a co-operative may be more onerous than that of a

public company because of the lack of standardisation of the rules for co-

operatives as compared to the corporations law applicable to public companies..

4.8.2 U NLISTEDPUBLICCOMPANY25

To paraphrase key findings from the legal advices:

Public companies are attractive due to the audit and taxation obligations

imposed on them which create high a degree of transparency and

accountability in the activities of the entity.

Public companies enjoy maximum flexibility in respect of share issues, dividend

policies, cross border trading, shareholder participation and protection and fund

raising. For example the constitution could apply a similar one shareholder one

vote rule as is the norm for the co-operative model.

This entity provides the most flexibility, transparency and accountability for the

benefit of investors, passive shareholders, management and third parties such as

suppliers and government agencies involved with the project.

An unlisted public company can have unlimited shareholders to raise capital for

profitable purposes, but it cannot advertise for investors. Public companies with more than 50 members, which is likely to be the case for

the community wind farm, may be subject to the takeover provisions of the

Corporations Act. Very basically, a company may be subject to the acquisition of

particular shareholder interests where the acquiring interest held in the company is

substantial. It may be possible to structure a company to avoid takeovers

however this requires further investigation.

4.8.3 H YBRID26

Blending a co-operative and unlisted public company together affords scope to access

a wider range of advantages and flexibility.

In short there is potential to utilise a co-operative structure for investment, ownership,

governance and decision-making by the community together with an unlisted public

company as a subsidiary entity for dealings with larger investors, professional and

corporate partners and government.

25 Appendix 8 ~ Hybrid Legal Structures, Wilson & Co Lawyers

26 Appendix 8 ~ Hybrid Legal Structures, Wilson & Co Lawyers



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To ensure consistency with the design principles the co-operative would need to hold a

majority shareholding and controlling interest, with both constitutions enshrining the

relevant design principles detailed earlier ~ for instance quadruple bottom line

governance approach, accessibility of decision-makers, open decision-makingprocesses and anti-takeover provisions.

4.9 G OVERNMENTLEGISLATION, POLICY& PROGRAMS

The NSW New England Tablelands Renewable Energy Precinct, and the joint Australian-

NSW Governments' 2020 20% Mandatory Renewable Energy Target, are key policy drivers

for commercial wind development especially, and New England Wind can be expected

to capitalise on the large amount of regional commercial activity scheduled to take

place from 2013 onwards.

4.9.1 F INANCIALSUPPORT

Financial benefits arise from this scheme through the creation of Renewable Energy

Certificates for energy generated. An alternative for consideration is usage of the

GreenPower scheme. Both options provide financial returns, however there will

potentially be environmental issues which arise with respect to how the purchaser of the

Credits or GreenPower uses the 'offset'.

The NSW Government Co-operatives Development Grants Program was utilised as

keystone funding for this Study. The Program provides grant funding to assist co-

operatives to establish, develop and/or expand. This program funds up to 50% of a

project feasibility study providing a co-operative is formed. The program does not fund

capital costs. The program may fund market research including wind resource monitoring

and other aspects of a feasibility study (eg a feasibility study into grid connection but not

the costs of building the connection). Up to $100,000 per annum is available. The

program is administered by the NSW Department of Fair Trading.

Other possible NSW Government incentives include: Climate Change Fund grant funding;

Regional development grants program;

Capital raising program;

Business advisory services; and,

Renewable Energy Precincts.



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There may be opportunities to obtain grant funding for community renewable energy

projects under the Australian Government Clean Energy Initiative, administered by the

Department of Resources, Energy and Tourism. The Clean Energy Initiative includes the

Solar Flagships Program, the Australian Centre for Renewable Energy, and theRenewable Energy Future Fund.

The Renewable Energy Future Fund was announced in the 2010 Australian Government

budget to provide additional support for the development and deployment of large and

small scale renewable energy projects. It will include partnerships between the

Government and the private sector to make critical early stage investments to leverage

private funds to support the commercialisation of renewable technologies. Funding will

be delivered through a number of departments and agencies, with the Department of

Climate Change and Energy Efficiency coordinating Fund priorities and progress.

The Department of Agriculture, Fisheries & Forestry also administers grants to farming

communities who group together on a particular project to help them adapt to climate

change, under the FarmReady Industry Grant. Acceptance of pre-approvals for training

will recommence from 1 July 2011.

The Enterprise Connect initiative has state-based Innovation Centres that provide on-

going support, and sometimes funding, to small and medium enterprises, including those

involved in clean energy.

4.9.2 P LANNINGREQUIREMENTS

Planning Approval is likely to require a Joint Regional Planning or Part 3A approval

(Environmental Planning and Assessment Act 1979, NSW). Part 3A is currently under

review.

NSW wind farms are permissible with consent in the following land use zones:

Rural zones: RU1 Primary Production; RU2 Rural Landscape; RU3 Forestry; RU4 Rural;

Small Holdings

Industrial zones: IN1 General Industrial; IN3 Heavy Industrial

Special use zones: SP1 Special Activities; SP2 Infrastructure

Glen Innes Severn Council in the New England Tablelands have implemented a

Development Control Plan for wind farms (detailed below). There have been negative

experiences with commercial wind development in the Glen Innes area which were

apparent in the community forum held there. For pragmatic reasons it is recommended

that sites elsewhere in the New England Tablelands, where there is strong support, be

prioritised for the first community wind farm.



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Glen Innes Severn Council Development Control Plan

Areas of the Glen Innes Severn Council have been identified as suitable for the

generation of wind energy.

Council determined it necessary to have Development Control measures to ensure

Council has policy to control or guide proposed wind farm developments, to allow

better guide decision making on such proposals for the community and developers.

Council supports the notion of alternate energy sources such as wind energy

generation. Wind farms have been identified in the Glen Innes Severn Council Economic

Development Strategy 2008 2010 as potential developments for the area.

Where visible from a non related dwelling or immediate surrounds a wind farm

development shall not be located within 15 times the blade tip height or 2kms (which

ever is the greater) of any dwelling not associated with the development or 15 times the

blade tip height or 2kms (which ever is the greater) from a reasonable, practical and

suitable dwelling site on any lot that has been created for the purpose of a dwelling.

Where turbines are proposed to be significantly higher than such properties or dwellings,

or where the turbines will dominate the immediate view from the dwelling or dwelling

lot, increasing these separation distances is recommended.

4.9.3 N EWENGLANDLOCALGOVERNMENT

A community wind farm has considerable scope to be in alignment with several New

England Local Government objectives and plans:

Armidale Dumaresq Council's Domestic Energy Committee passed a motion of

support which is now being considered by the full Council;

Uralla Shire Council's Mission Statement includes the priority to become a carbon

neutral community and a lighthouse model for local mitigation and adaptability

to Climate Change;

Guyra Shire Council's Community Strategic Plan includes an objective to provide

information and support for positive action on climate change; and,

Walcha Council's Deputy Mayor, Kevin Ferrier, attended the community forum

and made clear Council's identified interest in wind power development as

reflected in their business plans.



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4.10TECHNICAL& OTHERPARTNERSHIPS

4.10.1 COMMERCIAL& TECHNICALPARTNERSHIPS

Two commercial sites have been identified as possibilities for on-site generation which

could have significant financial advantages due to netting out their electricity costs at a

retail cost rate (as distinct to the normal situation of selling generated electricity at a

much lower wholesale rate).

Two possible partnerships are being investigated with commercial developers with a

view to incorporating a distinct community component or stage to their wind farm.

Dozens of commercial consultancies, developers and wind turbine distributors and

manufacturers have made contact offering to work with New England Wind.

With regard to future requirements for expertise, the finding from this Study is that

professional and technical partners should be sought and utilised for New England Wind

to the degree that necessary expertise is not available already within the community.

The large professional services, research and education base of the New England brings

a depth and calibre of expertise which is unique in regional Australia, most symbolised by

the presence of The University of New England.

At the time of writing three commercial wind farms are in the process of obtaining formal

NSW Planning approval and one (Glen Innes) has finalised the process. The combined

potential capacity is over 850 MW and all applicants have carried out detailed

monitoring, environmental and financial assessments, community information sessions

and community consultations. The latter consultations have been undertaken with

varying levels of commitment and success.

The four commercial developers have each expressed in-principle support for a

community cooperative wind farm, recognising that general support for such an

enterprise could translate to greater support for well sited wind farms generally.



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It is likely that New England Wind would be able to take advantage of technical and

construction capacity brought to the region by those commercial operations, with two

of the proposed wind farms likely to be at site preparation stage before the community

wind farm has completed its full resource assessment.

4.10.2 LOCALGOVERNMENT

Four local Councils supported the Study:

Armidale Dumaresq Council provided use of the Armidale Town Hall for the

Sustainable Living Armidale hosted community forum and Deputy Mayor Jim

Maher officially opened the forum;

Uralla Shire Council provided use of the Uralla Community Centre and General

Manager Tom O'Connor officially opened the forum;

Walcha Council's Deputy Mayor, Kevin Ferrier, attended the community forum;

and,

Glen Innes Severn Council's Mayor, Steve Toms, opened the forum which was also

attended by General Manager Hein Basson.


Illustration 14: Deputy Mayor, Councillor Jim Maher, Armidale Dumaresq Council, Armidale

Community Forum


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4.10.3 FUNDINGBODY~ NEWENGLANDRENEWABLEENERGYPRECINCT, DECCW

The NSW Government's New England Tablelands Renewable Energy Precinct's support

and contribution to the New England Wind Study has been significant and valuable, withhighlights including:

Numerous joint initiatives with shared promotion and presentations such as the

Landholder Wind Forum, UNE Round Tables and Northern Region NSW Aboriginal

Land Councils;

Access to NSW Government educational materials (Wind Fact Sheet, Community

Attitudes Research, Greenhouse Gas Savings) and facilities for meetings;

Confidential use of the 3Tier wind mapping data for early analysis of prospective

wind farm sites;

Research into wind power carbon-offset modelling and pricing;

Access to Community Attitudes Research to undertake further analysis of New

England Tablelands respondents; and,

Attendance at nearly every public event and Consortium meetings when

appropriate.

This has strengthened the Study's credibility in engagement with key stakeholders, local

Councils, landholders and investors.


Illustration 15: Joint a-frame for public displays (front & back)


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4.11CHALLENGES& RISKS

Community renewable energy projects such as New England Wind have a different risk

profile to commercial developments, with greater ease in gaining community support

and planning approval, though greater complexity for capital raising and accessing

professional/technical expertise.

The following risk framework reflects challenges and risks particular to New England Wind.

Each planning forum identified challenges and risks. Four broad categories were

identified:

1. Turbine siting and related environmental and public health issues. These risks are

particularly addressed by the siting and environmental requirements detailed in

the design principles in the following section of this report;

2. Raising funds. This concerned the quantum of funds required as well as receivingfunds in a timely manner, exposure to political and policy uncertainty and being a

small player in a competitive corporate field;

3. Governance. Getting the structure right was seen as being critically important,

particularly for community decision-making, government and larger investors and

commercial project partnerships; and,

4. Technical. The need for professional boards and management, accessing the

necessarily technical wind expertise and assessing issues such as turbine and site

selection and grid connection.

Negative experiences from current wind farm proposals in the region have been

included and usefully provide a more robust and comprehensive set of priorities to

ensure broad-based community support and acceptance.

Well some of us have other ideas about benefits and advantages. I think

its a shame here tonight. I think its tainted with the commercial [wind

farms] but some of us actually are interested in our particular areas for a

community wind farm so I guess Id like to state that point of view at this

stage in the game.



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Traditional wind industry risks need to be integrated with the framework and include:

planning and development;

project financing, investment, energy and electricity price, inflation and interest;

commissioning, operations, technology, infrastructure and grid connection; environment (flora and fauna, noise, flicker, aesthetics, construction,

decommissioning) and cultural (sites of significance, native title);

governance;

contracts and suppliers;

policy, regulation and political;

wind resource; and,

community/social licence risks.

The following table consolidates the identified challenges and risks for a New England

Tablelands community owned wind farm and details relevant strategies based upon the

recommendations and design principles outlined.



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Challenges & Risks Strategies to Address, Avoid, Mitigate

Maintaining the momentum and achieving well-

informed community decision-making and

addressing misinformation

Relationships with partners & key stakeholders

Community tire of story or initiative

Scale of initiative and the risk of burnout Responding to magnitude of a bold vision for

energy independence

Develop and implement comprehensive social marketing education

campaign

Maintain profile & communication with community

Continue to include community in decision-making

Publish wind monitoring statistics in the local paper every week

Keep a regular eNEWs

Delivering benefits to the wider community (beyond

direct participants such as investors, members,

landholders, employees)

Develop and Implement Community Benefit Plan with strategies such as

discounted electricity and energy education and efficiency already

identified as likely to be of wider benefit

Long-term role for New England Energy is to address energy issues for

community and region as a whole

Raising financial capital in timely manner, power

purchase agreement, volatility of renewable energy

market, competition for sites, finance, etc., global

economic conditions, decommissioning costs

Development of strong local community networks to support marketing and

capital raising

Recommended use of hybrid governance model to attract larger investors

Professional partnerships with expertise particularly site assessment and power

sale agreements

Investigation of direct sale of electricity to local users (Hepburn Wind are

developing an arrangement with Red Energy to be able to sell branded

'Hepburn Wind' electricity and better attract and retain customers) Ensure adequate provisions are made for decommissioning or refurbishment

of turbines



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Accessing necessary professional and technical

expertise Numerous commercial parties already identified as willing to work with New

England Wind

Partnership with Embark and support from NSW Renewable Energy Precinct

program

Existing professional service base in New England with commercial wind

development likely to bring further opportunities for professional services and

partnerships Negotiate management fees in shares to reduce working capital

requirements

Carpet-bagging of co-operative Specific provisions in New England Energy Constitution

Saleability of shares Clear constitutional rules for sale and transfer of shares

Strong business model and performance to ensure share value

Maintain Register of Interest for prospective purchasers

Turbine siting Issues ~ noise, heritage, property values,

habitat and wildlife, grid capacity, etc Comprehensive design principles developed for turbine siting requirements

integrating industry standards with community requirements

Prospective list of 110+ landholders interested to host turbines

Professional and transparent feasibility study of community wind farm site to

ensure integrity with design principles and siting issues

Political uncertainty, unpredictability and

interference (eg. County Councils take-over,

electricity utility sell-off)

Strong community governance model and majority ownership

Maintain strong working relationships with key agencies and Members of

Parliament Involvement of Local Government in governance and with regards to

planning and regulation matters

Continue to build community networks and support for New England Wind

and clean, renewable energy



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Market Forces take-over, unhealthy profit

dominance, investor dominance Strong community governance model and majority ownership

Cap placed on maximum investor (5-10%) and anti-takeover provisions in the

Constitution

Defined principles regarding financial return (8-10%) and Community Benefit

Plan

Green-washing and environmental integrity Strategic positioning to address moral or ethical offsets only (ie. not financial

and legal offsets) Transparent and professional disclosures in the Business Case regarding

environmental issues, performance comparisons with other energy sources

(including returns on embedded energy)

Design principles for turbine siting address high environmental standards as

well as industry standards for due diligence

Organised wind opposition, being locally based and

community led we are more exposed to strident

opponents. Potential for work to date to have been

biased by mostly supportive participants

Work to date has been open to all community members and stakeholders.

Negative opinions have been expressed in both the Survey and during the

Forums, particularly at Glen Innes

Concerns raised to date have been particularly about turbine siting issues;

ensuring they do not cause community conflict and that they have the

support of affected neighbours

The design principles have incorporated these risks and issues.

Continue to include community in decision-making and high standard of

transparency and accountability

Develop and implement comprehensive social marketing educationcampaign

Maintain profile and open communication with community



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4.12INVESTMENT& INVESTORPROFILING

$5m of indicative investment was identified in a very short time.

Several local organisations have indicated in principle interest in making larger

investments which would total $2m.

300 respondents to the survey expressed their willingness to invest $3m in total.

These financial findings are significant given that this Feasibility Study precedes being

able to provide any firm details about governance, business and financial models or

likely returns. Many investors and community members indicated willingness to invest

subject to receiving such details.

Would need to examine the business case before investing. Although I

would not be that worried about high returns, I would not like to take a high

risk on any investment.

Willingness to invest was specifically covered at each of the nine forums and the

overwhelming majority of participants raised their hand at the end of the Forum to

indicate their support for the establishment of a community wind farm and their

willingness to consider investing in such an initiative (though no assessment of the

amount of investment was made).

The reasons and motivations for investors ( below) echo the pragmatic views reflected in

the design principles ~ that is, potential participants are seeking to balance financial

returns, essential to the viability and sustainability of the wind farm operation, with their

considerations for energy generation and security, climate change and clean energy,

economic development, community leadership and public health and safety.

NEW ENGLAND TABLELANDS COMMUNI

Documents

Feasibility Study New England Tablelands Community Wind Farm Final 20110921 LowRes