Community ownership via community enterprise companies or other suitable mechanisms, has the power to enhance democracy, whilst empowering communities to directly invest in a future of their choice.
They achieve this by putting development directly in the hands of local people via the establishment of a trusted social enterprise organisation, owned and democratically governed by a large number of local people. This model can unlock great economic and social prosperity.
The town of Cardigan in Wales, UK, has become a hotspot for community projects. 4CG, a community enterprise which allows local people to buy shares in local buildings for community use, has earned national recognition. With shares as low as £200 each and a constitution based on “one shareholder one vote, irrespective of how many shares are held,” virtually anyone can afford to have a personal say in the development of their community. As a result, 800 of the 4,000 adults living in Cardigan have bought shares.
4CG has funded projects including providing cheap car parking to support local high street businesses, refurbishing a derelict cottage to provide an affordable home for a local family, and buying Cardigan’s old court house and police station to be used as community venues.
But community investment shouldn’t stop at buildings; Wales has huge amounts of wind energy just waiting to be tapped. Awel Deg (Fair Wind) has been set up to make use of this. Based in Cardigan, Awel Deg aims to enable local people to invest in new wind farms and, in return, reap the economic benefits.
Awel Deg is currently working to raise funds for two on-shore wind turbine projects. The first turbine, if funded, would be run by Awel Deg, with the landowner - a town councillor and 4CG director - receiving a fair rent for hosting the turbine. The second project is phase one of a partnership with Ceredigion County Council to provide as many suitable community-owned turbines as possible in the county.
Once planning permission has been achieved, Awel Deg will seek local people to invest in the development of the turbines.
Compared to commercial developers, community-owned energy companies can offer a better deal for investors, landowners and the community. Awel Deg and 4CG are registered with the Industrial and Provident Society, meaning both organisations are legally obliged under the Industrial and Provident Societies Act 1965 to operate as co-operatives for the benefit of the community.
With a “one shareholder, one vote” system, no one person or commercial company is able to take full control of the enterprise. This maintains democracy in ownership and ensures that all profits from the sale of energy go straight back to the community either via a healthy return on the investment from the local shareholders or fair rents to the sympathetic local landowners hosting these community assets, with all remaining ‘profit’ to be spent on benefitting the community.
The European Union (EU) has set targets for the proportion of energy used in its member states which must be renewable by 2020. To meet these targets, countries must reduce their energy use and make sure the energy they do use is renewable or as low carbon as possible.
Community ownership of renewable power generation advocates the use of renewable energy, demonstrating the benefits of wind power and helping to accelerate movement towards EU targets.
The Awel Deg model could go even further. There are plans to form a true local energy retail company to compete with the major national ones. In the future, rather than exporting their generated power to the National Grid, all local renewable energy generators could sell their power to Awel Deg who would ‘rent’ the local electricity grid in the same way that energy supply companies do, to provide local households and businesses with local renewable power delivered at a cheaper price than the high carbon power from the National Grid.
If this idea were duplicated on a national scale, binding targets such as those set by the EU could be met with a flowering of local ownership and control of energy generation.
4CG shows that community ownership is not only possible but achievable. If we can take community investment to the energy sector, there is no stopping the power of local people.