In one of the first deals of its kind in Scotland, an onshore wind farm has been financed with the goal of targeting fuel poverty in Scotland. The innovative deal structure for the new Pogbie wind farm brings together multiple stakeholders, including Mongoose Energy, the Renewable Energy Investment Fund (REIF) delivered by the Scottish Investment Bank, the investment arm of Scotland’s enterprise agencies, and Close Brothers Leasing. The focus and benefit of the project will be to support not-for-profit energy supplier, Our Power, in its fuel poverty alleviation aims. £13m of debt funding has been secured to allow the acquisition and development of the site.
Once finalised, Pogbie wind farm will contain 12 turbines with a total capacity of 9.6 megawatts. Nett surpluses from the project will go towards communities that are suffering fuel poverty via Our Power, and other local causes.
Pogbie wind farm, based in East Lothian, is a collaboration between Our Power and Mongoose Energy, a company which is majority-owned by community groups and was set up in 2014 to develop and manage community energy systems. The company will be responsible for building the turbines and associated infrastructure, with ownership transferring to a community benefit company, Our Community Energy, on completion in 2018.
Alister Steele, Chair of Our Power: “Our Power’s ambition includes securing a long-term supply of renewable energy. This innovative initiative will create the potential to not only secure local renewable energy in a cost effective way, which will help us deliver our social mission of tackling fuel poverty, but provides the potential for wider community investment in the assets. Directly linking renewable generation and not for profit ownership to addressing fuel poverty is a really exciting breakthrough.”
Mark Kenber, CEO, Mongoose Energy: “Mongoose Energy’s mission is to drive community ownership and control of renewable energy generation to create a fair and sustainable energy system. We are delighted to be developing Pogbie wind farm which will offer local stakeholders the opportunity to invest directly in the project, contribute to addressing fuel poverty and provide tangible benefits to the local community. “
Scotland’s Energy Minister Paul Wheelhouse said: “I am delighted that the Scottish Government has played an important part in making this pioneering project happen, by providing £3.5M of funding from our Renewable Energy Investment Fund towards the capital cost of the project. This project is pioneering in respect of being the first of its kind to be financed specifically to help not-for-profit energy supplier, Our Power, to tackle fuel poverty, but, in addition to doing so, Our Power has also committed to provide a community benefit package to the local community in East Lothian, in line with the Scottish Government’s Good Practice Principles. I congratulate Our Power, Mongoose Energy and Close Bothers Leasing for putting together such an exciting project and I wish the project team every success.”
Kerry Sharp, Director of the Scottish Investment Bank, said: “This innovative deal is a great example of how we can support initiatives that help deliver both commercial and societal benefits. Projects like Pogbie wind farm play an important part in helping grow Scotland’s renewable energy generation capability while addressing the issue of fuel poverty.”
Chris Rodgers, Head of Energy Finance, Close Brothers Leasing: “This is an exciting deal and one that we are very proud to be a part of. The significance of getting this deal agreed in a reduced subsidy environment should not be underestimated because it sends a strong message that these sorts of agreements are still possible, and – importantly – viable.”