Germany — Hollich Citizen's Wind Farm

Nicola Mares • 13 March 2020
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Author: Jarra Hicks

Hollich Citizen's Wind Farm is community-owned and run. Its limited-liability company (LLC) structure makes such community involvement and ownership possible, and helps make sure the economic and environmental benefits are felt at local level. Each year, it produces 54 million kWh of clean energy, displacing 44,000 tonnes of CO2 emissions.

Project overview

With widespread local support, the local agricultural association in Hollich Vermaltung started the idea of a community-owned wind farm in 2000. Having set up the Hollich Citizen’s Wind Farm, they began installing eleven 1.5 kW turbines in 2001 with the support of 155 members. By 2009, the farm had added another seven 2 MW turbines and increased its membership to 217. All members are from the Steinfurt region.Hollich, like most community-owned wind farms in Germany, is a limited partnership with a limited liability company (LLC) as a general partner. This structure makes genuine community involvement and ownership possible, and means the project can take advantage of government wind power incentives.

Project cost and funding

So far the project has cost $32.7 million — 25% financed through the sale of shares to the 217 members and 75% by low-interest loans.

Background

In 2000, the local agricultural association (Landwirtschatlichen) put forward the idea of a local, community-owned wind farm. They wanted to limit the environmental impact of electricity production and increase sources of local income. They were also keen to do it with minimum impact on agricultural land and distribute the wind leases fairly. In 1997, the local government had earmarked local land as ‘priority wind areas’, so they had municipality support for the project, too.
To achieve 'community-owned wind', the group established Wind Farm Hollich Vermaltung, an LLC. It is responsible for construction and for organising the farm's technical and administrative operation. Limited partnerships of investors joined forces with the company to establish GmbH & Co.KG. Working together, the company and the partnerships plan, deliver, fund and maintain the wind farm. The limited partnerships comprise local investors, who each buy shares of the wind farm from the company. The 217 limited partners — or shareholders - funded 25% of the project. Limited liability means each investor is only liable for how much they invest, while the company, as the general partner, has unlimited liability.

Challenges

In Germany, co-ops like this have high start-up costs, high administrative burdens and fewer tax breaks. With this in mind, to develop strong local ownership and control of wind farms, Germany has created the GmbH & Co.KG structure - now the most common way for communities to co-own and benefit from wind ownership in Germany. It also allows for larger community-owned wind farms, as the limited company can hold debt without it being a liability to the shareholders.
Because it was initiated and established by the local community, the Hollich wind farm proposal was well received. The local agricultural association's involvement helped get farmers on side and resolve potential conflicts over land use.

Results

The Hollich wind farm produces 54 million kWh a year. This displaces the use of 16,000 tonnes of coal every year — or 44,000 tonnes of CO2 emissions.

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