November 16, 2012

Westmill Solar Farm Acquired By Local Cooperative

It has just come to my attention that a couple of weeks ago Westmill Solar Park near Watchfield in Wiltshire was finally acquired by a local co-operative. According to their press release:

The board of Westmill Solar Co-operative are delighted to announce that they have today completed the acquisition of Westmill Solar Park, following one of the most successful share offers of its kind and the signing of a multi-million pound loan agreement.

The £16.5 million project is now the UK’s first, and the world’s largest, co-operatively owned solar farm, located outside Shrivenham on the Oxfordshire/Wiltshire border.

The project represents a step change in the community energy sector in the UK, and offers a vision of how future locally owned, widely distributed low carbon energy generation can provide an alternative to our present unsustainable and damaging model of electricity generation.

On the technical side of things, the Westmill Co-op go on to say that:

The 5MWp solar farm generated 4,900 MWh in the last year, equivalent to the domestic electricity requirements of a town of 1,500 houses, saving over 2,000 tonnes of CO2 emissions.

whilst on financial matters they say that:

A share offer for £4 million was launched to enable the community to purchase the project in June 2012. This was nearly 50% over subscribed, raising one of the largest amounts ever raised in this type of offering in the UK in only 6 weeks.

The Co-operative was limited to how much it could raise by FSA rules and had to refund a large amount of subscriptions. They therefore launched a second private share placement (with fewer restrictions but only available to existing subscribers) to enable as much of the community’s funds to be used as possible.

The predicted internal rate of return to members is 9 – 11% over the 24 years of the project.

Putting two and two together, £16.5 million minus £6 million leaves £10.5 million which has been provided:

By a loan from Investec Bank. The intention is that this loan is transferred to a pension fund bond in the near future, with discussions progressing well.

As far as I have been able to ascertain thus far, the co-operative purchased the already operational solar farm from Blue Energy (Westmill Farm) Limited, which is in turn a joint venture between Blue Energy Limited and Inazin Solar. Planning permission for the site from the Vale of White Horse District Council was originally obtained back in March 2011, and construction completed by July 2011. If nothing else this sale does demonstrate that there are other potential alternatives to going to the City of London or the City of Shanghai when it comes to the financing of large scale solar PV projects. Investec are listed on the Johannesburg Stock Exchange, as well as in London!

In conclusion, and in contrast to a growing number of large scale solar PV planning applications down here in Devon, please note that the Westmill Solar Park was not constructed on what planning guidelines refer to as "the best and most versatile agricultural land" since:

The Park consists of over 20,000 solar PV panels across a 30 acre former airfield

and that:

Westmill presented Blue Energy with a seemingly impossible challenge – to construct the UK’s largest source of solar power in just 8 weeks. The timings were absolutely critical to ensure that the project met Ofgem’s FIT deadline

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