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Community Power Projects – A Closer Look

Ingo Koenig

Ingo Koenig, Koenig Consultants, Germany

A couple of days ago we were interviewed on the differences between community power projects in Germany and Ontario. In Germany wind power is big business, and up to 90% of wind farms have community participation. After comparing the FIT rules, the tax rules, incentives and legal structures we came to the conclusion that the main difference is in the motives and scope for community projects.

In Germany the drivers for the vast majority of community are:

– A passion to change the energy landscape from coal/nuclear to renewable sources.
– A desire to share the burdens and benefits of the project with other members of the local community.
– An interest in earning some decent returns on investment (of time and money).

When it comes to discussing community power projects in Ontario, this last point is undermined and almost a “no-no”. Almost exclusively, co-op and not-for profit structures are discussed as entities with equal (or no) profit sharing and as having one-share-one-vote etc. This co-op-model has not been applied to many wind or solar farms in Germany (personally I do not know of any). For the most part, all farms have been limited partnerships with profit-sharing and voting based on equity-share.
Using this model attracted a high number of highly educated and sophisticated individual investors into the industry. These same people very often switched their careers and are now entrepreneurs, managers, professional advisors etc. for renewable energies enterprises. This, in turn, created a professionalization of the community projects they own and operate and resulted in better returns and increased attraction of people into the community power project space.

Something to think about when in Ontario community power projects are regarded as “granola-bar-eater-projects” by some of the big players.

Koenig Consultants are a CTT Emerald Partner.

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