Interview with Iain Beath, Gareth Hoskins and Jane Ruell from Brendon (Community) Energy

Brendon Energy is a not-for-profit, community energy generation co-operative. They have been in existence for 3 years and in that time have secured about £75,000 of investment from local individuals and grant giving bodies and have completed 4 photovoltaic arrays on community buildings in Somerset. They have ambitious plans to extend their influence throughout a wider area and in a variety of technologies.
Please visit their website http://www.brendonenergy.org.uk
Are you interested in supporting a local organisation with high ethical standards and a proven delivery record in the fight against climate change? Please read on and share your comments.

Brendon Energy
JG. Many thanks for meeting me today. Can we begin by talking about Brendon Energy and the progress that has been made?
GH. Brendon Energy has emerged from the Transition Initiative, a nationwide movement looking to overcome the effects of fuel shortages, of carbon creation and of climate change. It is a co-operative (a legal entity registered as an Industrial and Provident Society) with bank account, VAT registration etc. As a co-operative it sells shares to raise money and pays interest to members. The aim of Brendon Energy is to put energy creating installations on community buildings. This benefits the community that owns the building and reduces the amount of carbon being created by the production of electricity.
IB. We’re not restricting ourselves to buildings; we’re looking at renewable energy more generally in the local area, in particular hydro powered projects, which we’re looking to fund from our coming share launch. We are also able to consider possible ground-mounted solar developments in the right place.
JG. So you were a group of like-minded individuals who wanted to go further than just community action and have now created a renewable energy business. Is that right?
GH. Yes. Brendon Energy is registered with the Financial Conduct Authority as a co-operative. It is effectively a limited company but, as a co-operative, members have one vote each regardless of the number of shares they own. We run for the benefit of the community rather than the benefit of individuals.
IB. It’s a special type of co-operative where all/any of the profits are mandated to go back into the community. So far we have funded the local Youth Club and Brendon Orchards, who were featured on the BBC’s Countryfile programme and who make local products – part of the sustainability model.
The football club and the Wivey link community transport service have also benefitted.

Local Energy Generation
JG. How did the specific commitment to energy generation arise?
IB. It originally arose out of the ideas of a group of local people who wanted to put up some wind turbines, perhaps on Maundown Hill. We essentially set out to see what renewable energy could be provided locally. We wanted to bring our energy production, as much as possible, away from remote power stations and to see what we could produce locally.

The position of shareholders
JG. Tell us a bit about the position of your shareholders.
GH. We have just over 50 shareholders, whom we call members. They elect the Directors of whom there are five. We have our AGM each year and interim meetings as and when decisions need to be taken.
JG. Did you expect about this number of members?
JR. Initially yes but it will build up gradually – with each opportunity for a share launch more people can join. A share launch arises when projects are ready to go and money is needed to move other projects on to the next step.
JG. All your shareholders support all your ventures rather than specific ones – is that right?
JR. Yes but we’re open to the idea that some members will want to support something in a particular locality or a particular type of technology.
JG. Do you see yourselves spreading over a wider geographical area?
IB. Our remit is for the whole of Devon and Somerset and we are able to respond to projects that come up within that area.
JG. And are you as Directors employed or do you work as volunteers?
GH. The Directors are all volunteers. Jane’s role as bookkeeper is paid.
IB. We also had a graduate intern who helped us with our first share launch and who is now gainfully employed elsewhere. He was paid and mentored by us with support from Exeter University.

The Directors
JG. So do the Directors share a variety of expertise?
JR. That’s a really interesting question. Amongst the Directors there is a wide range of expertise.
IB. I bring technical expertise. I deal with a variety of renewable energy projects in my day job and we have currently on our books one of the largest solar energy projects in the UK. This will certainly have the largest community fund attached to it. Our Finance Director has worked for numerous co-operatives. We also have a qualified solicitor on the board and Gareth’s expertise is in finance and administration.
JG. Are there any gaps; would you like other people with specific expertise?
IB. We’re always interested in people who could come and contribute. Organisations that rely on volunteers are always vulnerable and strength in numbers is important.
JG. Your thinking of Brendon Energy as a volunteer organisation is fundamental to what you do and the non-profit making aspect is also hugely important. What difficulties do these parameters create for you?
GH. All the Directors, because we are volunteers, have limited amounts of time. What we are short of is people who have a little bit of time, are interested in community renewable energy and who are prepared to volunteer, join the Board, take on tasks. There are also some basic admin tasks where we could do with some assistance – following up phone calls, extracting information from energy companies and government ministries – all of which takes time and it’s time we’re short of. We’re not short of enthusiasm, just time!

Running a Co-operative
JG. Do you feel you are making it up as you go along or have you got the example of others in front of you?
GH. In this area we’re pioneers but there are many community energy companies nationwide. A lot of them pay part time solicitors and financiers and have links with energy companies or banks and have been able to raise millions of pounds. We currently are in the hundreds of thousands of pounds arena.
JG. That’s good isn’t it?
IB. Yes, it’s great. What we would like to do with our current share launch is to considerably increase our number of investors. Community Enterprise investments are much more attractive than putting the money in the bank at the moment. You get double/treble the rates of return as well as knowing people are directly benefitting from the way you are using your money. Also from Brendon Energy’s point of view we’d like to be in the position where we can create local employment opportunities as part of the sustainability agenda.

The next share launch
JG. Let’s just look at the next share launch – what sort of money are you looking for?
GH. Looking back to our early days, we had a large PV project which needed £75,000. Our first share launch raised that money either by people purchasing shares or by a loan. We have subsequently installed PV panels on 3 more local community buildings in Wiveliscombe, Churchinford and Brompton Regis and our second share launch will raise the money for these. The panels are actually on the roofs and generating. Our other project, which is a hydro project, will cost £150,000. So in total we need to raise a minimum of £200,000.
IB. We have a short term loan on the 3 roofs and we need to replace that with share ownership as soon as possible.
JG. Who provided that loan?
JR. That’s from a charity called Pure Leapfrog that is working on a ‘Big Society’ capital investment programme and they help to initiate community owned renewables throughout the country.
IB. We’re hooked up with Regen South West as well and they supply us with information on community renewable energy generation.
JG. So the sky’s the limit?
IB. There’s nothing to stop us! The limit is the number of investors and the availability of people to help.

Becoming a shareholder
JG. Can you give us a few details about how you can invest?
JR. The minimum share investment is £50. So someone can become a member and have a vote through putting £50 into the project. There is currently a cap of £20,000 imposed by the Financial Conduct Authority. The thing with the investment is that it’s not just an economic return, it’s a social return and an environmental return.
IB. None the less there is a 5% interest rate and anyone who invests over £500 and pays tax can get Enterprise Investment Scheme allowance (EIS) – for someone in that position it’s nearer 10%. People should consider this as a medium term investment and shares have to be left in the company for 3 years at a minimum. All shares cost £1 and will always be worth £1 when the investor chooses to cash in their investment.
JG. How will you spread the word about the new share launch?
GH. We’ll produce a share offer document and spread the word throughout Somerset and Devon through the website, newspaper articles and local events. We’ll also do leafleting in the communities who have benefitted from our installations and invite them to invest in Brendon Energy with the security that their investment is spread across several projects.
IB. The community buildings where we have already installed arrays get free electricity during the day and a proportion of the Feed In Tariff.

Successful generation
JG. Are you happy with the amount of electricity you are generating so far?
IB. Generally with solar the yields are exceeding expectations by about 15%. For example the Wiveliscombe Children’s Centre gets about £1,500 free electricity pa. during the day which is quite a contribution to their expenses.
GH. Some community buildings which are heavily used during the day, like the Churchinford community shop, also need a lot of power.
IB. In the next 5 years we will see technology coming through that will store self-generated energy for use when it’s needed. It’s a question of specialised batteries that are now in development becoming commercial. Well before Hinkley C is commissioned solar will be cheaper than nuclear.

The progress of Brendon Energy
JG. Do you think the recession has slowed down the development of Brendon Energy?
IB. I don’t think so. We’re in a small community and there’s more confidence in this sort of investment. The returns are higher but the Feed in Tariffs of course were cut by the Government-
GH. ….because the Government doesn’t believe in climate change!
JG. The localism agenda is important for what you’re doing?
GH. Yes indeed. Local people in the Quantocks or Wellington for example know their local buildings and how they are used.Local people have local knowledge and local contacts and they can suggest local community facilities where we could put in a PV installation and the community benefits. We handle all the surveying, tendering, payment for and installation of the panels. We then draw up a contract with community representatives allowing Brendon Energy to rent the space above the roof for 20 years providing the community building with free daytime electricity and a proportion of the Feed in Tariffs.

The future of wind and hydro projects
JG. Can you tell us a little about the prospects for wind and hydro installations?
IB. We were initially keen on using wind as a source of energy locally and we had one particular member who was very enthusiastic about wind power around Wiveliscombe. We applied to the Co-op Bank and the Centre for Sustainable Energy for funding through the Community Challenge to allow us to explore the idea of putting up 3 medium sized turbines. We won this national competition and were awarded sufficient funds to pay for a full feasibility study but unfortunately this did not tell us what we wanted to hear. A lot of Somerset is constrained by the military radar system in Yeovilton – there was even an objection to a tiny wind turbine in Langley Marsh.
In terms of the public survey we conducted, although there was big support in the population centres like Wiveliscombe, in some of the more remote areas there was a strong resistance. So, as we are essentially a community group we felt this was not the time for such a project.
GH. Brendon Energy has now taken the decision not to pursue wind turbine projects.
JG. …and hydro projects?
IB. We can offer to take hydro proposals forward where there may not be commercial returns but the returns are good enough for a community group. Our next project is a hydro project where we are able to step in to help a charity which has all the permissions in place but can’t afford to install the hydro turbine themselves. We, with our shareholders and project management experience, can be really helpful to them. There are a number of projects like this and the more investors we have the more we can do.
JG. Was there some talk of Brendon Energy working with the Exmoor National Park on renewable energy projects?
GH. We’ve established a subsidiary co-operative, Exmoor Community Energy, to carry out projects in solar and hydro on Exmoor. We could do this because of the nature of the constitution we established for Brendon Energy in our early years. We have various contacts on the moor and in the Exmoor National Park Authority so we are waiting to see what happens.

Involving schools (and churches) in developments
JG. Do you have any plans for putting solar panels on Somerset and Devon schools or churches even?
GH. A lot of schools seem to have access to specific funds for PV projects but we are happy to work with any school governors who might be interested in contacting us.
JG. ….and churches?
GH. We haven’t made much progress with churches as yet. Certainly in Stogumber we have parishioner support but the Diocese has yet to make up its mind. We would also love to work with housing associations and we have lots of support from Magna tenants.

The government’s attitude to community energy generation
JG. Do you feel that Government is supportive of community energy?
JR. The Government is behind renewables and community owned renewables and recent DECC announcements are proving that. The Enterprise Investment Scheme of tax relief available to organisations such as this is an incentive. The Feed in Tariff is still there, it’s dropping all the time but it is a way of incentivising. They do have targets to meet in terms of renewables. We’re being contacted regularly by new co-ops starting up to do what Brendon Energy has been doing for the last 3 years and that’s very encouraging.

Late March/early April share launch
JG. So when can we expect the next share launch?
GH We’re aiming for the end of March early April. All the information about the launch and the Share Offer Documents will be on our website. Our financial processes are monitored by the Wessex Re-Investment Trust and Somerset Co-operative Services. We’ll be working as hard as we can over the next 2 months to ensure as successful a second launch as possible.
JG. Very good luck to you all and very many thanks for talking to me today.


2 Comments »

  1. Another great interview but why have Brendon not included biomass for heat with the Renewable Heat Initiative or Ground or Air Heat Pumps?
    The concept for local community interaction is excellent and I found the interview interesting and enlightening. Thanks

    Comment by David — March 3, 2014 @ 11:51 pm

  2. Brendon Energy should be congratulated on their fantastic achievements with this – it’s a model that can and should grow throughout the area. It’s true that there are RHI out there as well although the costs and complexities are perhaps greater than simple PV especially at scale.

    Comment by Ian — March 13, 2014 @ 8:42 pm

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