Author: Jarra Hicks
The Middelgrunden Wind Turbine Co-operative shows how collaboration, pooled resources and good relationships with local communities can help overcome objections and misunderstandings about wind power.
Project overview
The Middelgrunden Wind Farm’s twenty 2 MW bonus turbines form an elegant arc, 3.5km offshore of Copenhagen. The project is co-owned by the Middelgrunden Turbine Co-operative and the Copenhagen Municipal Utility, who own 10 turbines each. Today, it's the world’s largest
co-operatively-owned wind farm and supplies 4% of Copenhagen’s electricity. When it was built in 2000, it was the world’s largest offshore wind farm.
Background
The Copenhagen Environment and Energy Office (CEEO) started the Middelgrunden Wind Farm project in 1996. Almost immediately, a group of local enthusiasts formed the Middelgrunden Wind Turbine Co-operative to work collaboratively with CEEO and Copenhagen Energy to develop and co-own the project. The Middelgrunden Turbine Co-operative and the Copenhagen Municipal Utility signed contracts in 1998.
Throughout the development and planning process, the co-op played an important role consulting and communicating with the public, and encouraging people to get involved and buy shares. The project was approved in 1999, and up and running by late 2000. The co-op now has 8,553 members, including individuals, companies, organisations and unions. 88% of members are from Copenhagen. Shares are sold in 1,000 kWh units.
Legally, the co-op is a limited partnership with joint and several liability, like all Danish wind co-ops. Joint liability causes no problem because the partnership bylaws prohibit the partnership going into debt. As such, the co-op’s half of the wind farm is financed entirely by selling shares, and each member is liable only for the cost of their own shares. As with many cooperatives, revenue is distributed among its members based on how much electricity they use — or 'patronage'. This means most members own shares equal to the amount of electricity they are likely to use in a year.
Project cost and funding source
The co-op's share of the Middelgrunden Wind Farm (ten 2 MW turbines) cost $34.6 million. They raised this by selling 40,500 shares at $821 each to over 8,500 members.
The early part of the project was financed by pre-subscription payments from people interested in becoming co-op members. 30,000 pre-subscriptions were sold at €7 each, raising €210,000. The cost of members' pre-subscriptions was then deducted from the cost of the first set of shares they bought.
The SEAS Wind Energy Centre manages the ongoing maintenance of all the farm's turbines.
Challenges
The development process didn’t run entirely smoothly. After the first round of public consultation, the original plans were altered from 27 turbines in three rows, to 20 turbines in one arc. The eventual widespread public acceptance of the project was thanks to the co-op's excellent community engagement and information. Some Copenhagen residents were concerned about the noise and appearance of the turbines, so the co-op organised a tour of other community-owned wind turbines. After the tour, all residents came out in support of the project.
The co-op sees communicating the project plans — as a way to get people involved and for the public to see the benefits — to be essentialto the success of this and any other wind project. According to Sørensen et al “direct public involvement, e.g. the co-operative ownership model, is an important means for social and political acceptance”.
Results
The total capacity of the 20 turbines is 40 MW, enough to supply over 29,000 Danish homes. The wind farm has “become world-famous and photographed by visitors from around the world” (Middelgrunded Co-operative spokesperson).
In making the joint-ownership model work, Middelgrunden has become a model for partnerships between utility companies and community co-operatives - and for larger scale and ‘urban’ wind co-ops. According to Sørensen et al the benefits of this model come from the fact that: “the utility company has the capacity for dealing with questions about technique, contract work, etc. The co-operative has the knowledge from the private wind sector, with its inherent enthusiasm and commitment, as well as better contacts with the public.”
Working together has also meant a bigger project, abating more greenhouse gases, than would have been possible otherwise.
More information
Footnotes
1 Sørenesen, H.C, Hansen, L. and Larsen, J. (2002), “Middelgrunden 40MW offshore wind farm Denmark – Lessons Learned” [ a b ]