June 25: 'The Kuwait of wind'
While visiting the new wind turbine at Balnamoon farm near Cullen, Scotland, Michael Johnston points at the surrounding hills where windparks are planned in various stages of preparation. Investing in windpower has been made attractive here.
 
We arrive at an awkward moment of time: lunch hour at Balnamoon farm. Father Michael is just about to eat his dish when we come in. He urges us to take a seat and starts looking for a coffee pot to perform a welcoming ritual he hasn't done for years. Nontheless we get coffee, he starts eating his meal standing up, while his son Esko (18) and later his wife Pauline join the conversation.
 
It has been a long way for the Johnstons. Four years of preparation and withstanding local activists (“I am not an easy person to be threatened”) have only recently resulted in the erection of a 835 kilowatts Enercon E-48 wind turbine on the farm. “People are not used to see single turbines on top of a hill”, says Esko. “They are used to windparks”. Michael joins him: “Is that all, people said. That little thing? All that fuss about that?”
 

 
The turbine itself is going through its childhood diseases. There was a wiring fault in the generator and later there was a bolt of one of the blades that had gone missing. German engineers immediately arrived on the scene to get the turbine running again. There is pressure on them, because the contract with Enercon guarantees 96 percent uptime for the turbine. If, due to a technical failure, the turbine is unavailable, Enercon pays for the missed production in the downtime. That's all part of the 13 year contract under which the turbines are delivered.
 
The total cost of the turbine amounts to 1,3 million euros, of which 275,000 are reserved to get a connection to the grid. Courtesy of Scottish and Southern Energy. According to Johnston, grid connection in England costs about a quarter of that. He blames the difference on SSE monopoly to the grid.
 
The cooperative bank will give a loan for about 90 percent of the needed sum. So Johnston had to find the remaining 130,000 euros elsewhere. He founded a company with limited liability and sold 30 percent of the shares to a private investor. “For that 30 percent of the company, they put in 10 percent of the cash”, he explains. Johnston Family thus remains the largest shareholder, they provide the land (for which the company pays rent) and hold a veto over major decisions.
 
Johnston is optimistic on the returns of the investment. “The person that put in 130 thousand now, will get over 3 million euros back in 25 years time.” Compared to other community-owned windturbines, that seems a bit optimistic. The project in Orkney for example has had a 10 percent dividend over the last few years.
 
Looking around from the hilltop where the Enercon is turning, the are anemometers measuring the wind at a hill in the west, another hill is the site Vattenfall has chosen for a 15 turbine park. In fact there is hardly a hill in sight that hasn't been taken into option by one party or another. “What will this look like in five years?”, I ask him. “There will be windturbines everywhere in Scotland”, says Johnston. “We want to produce for you, on the European mainland. You're standing on the Kuwait of wind!”
 
Johnston himself has plans for building two more turbines to start with, and then five more. And fifteen more if all works out fine. Will his income eventually come from wind, rather than from the 2,000 hectares organic mixed farming? He laughs out loud, but doesn't reply.
 

 
Fact is that both the British and the Scottish government stimulate generation of renewable power in the forms of ROCs (Renewable Obligation Certificates) or guaranteed feed-in tariffs (a fixed surplus on top of the power market price). Also, organisations like the Scottish Agricultural Organisation Society and Scottish Community Renewable Initiative support communities wanting to invest in their own turbine.
 
The Scottish Parliament has set the tarriff for windenergy at 120 pounds (133 euros) per megawatthour. In the windy climate of North-Scotland, Johnston has calculated that the return on investment is about 25 percent per year. When the feed-in tariff of the British Government is put into place, it will be even more favourable, he reckons.
 
The major problem in upscaling windpower is arguably the limited capacity of the current power grid. If farms at the end of the line gradually change into major producers of power, that demands not only an increase of the capacity of the powerlines, but also a change in configuration. Power companies now making money with connections to the grid would act wisely by investing in rendering their grid future ready.