Published on 13 February 2020
About this good practice
Templederry Community Wind Farm is a 2 turbine 4.6MW project generating enough electricity to power 3,500 homes annually. It took over 12 years to develop and began producing electricity in November 2012. It relied on an innovative mix of EU and national exchequer grants, tax relief and guarantees to leverage private and community financing. The development and construction of the project cost c.€6.2m. financed as follows: (a) Initial funding of EUR 1,000 each from 29 local investors; (b) LEADER grant funding of approximately EUR 200,000; (c) EUR 1.2m equity funding under an Irish income tax relief scheme – the Employment and Investment Incentive Scheme (EIIS); and (d) EUR 4.8m project finance from De Lage Landen (a subsidiary of Rabobank). The German turbine supplier Enercon provided construction finance (which was repaid out of the De Lage Landen loan). Templederry Wind Farm Ltd was set up in 2001 by members of the local community who became shareholders for an initial capital investment of EUR 1,000 per person. The wind farm is beneficially owned by the original investors with 2 shares held by a community co-operative for the benefit of the broader community. Tipperary Energy Agency is one of the original investors and a key partner in the delivery of the project. It was anticipated that while there would be no return for the first 5–6 years, if the project is successful, it will generate EUR 1.0 – EUR 1.4m per annum for the local community.
The total investment was EUR 6.2m. Four individuals spearheaded and drove the project. Tipperary Energy Agency provided technical and financial advice. Public support combining a Feed-in-Tariff, an income tax relief scheme and a LEADER grant, enabled private and community investors to come on board.
Evidence of success
Powers 3,500 homes annually with clean renewable energy, overall high level of acceptance of the project, knowledge and jobs have stayed in the community. Instead of taking a dividend, the shareholders have re-invested the revenues in different renewable energy projects: (1) Grid Connection and Planning Permission for 3 x 20MW Solar Farms located in different communities around Ireland; and (2) a community-based Virtual Power Plant (cVVP) - Ireland’s first community owned electricity supplier.
Potential for learning or transfer
Using an innovative financial structure, the project leveraged public funding support (EU grant, an exchequer-funded tax relief scheme and a national feed-in tariff scheme) to secure vendor construction finance, bank project finance and equity. The project began with an open discussion within the community about how to respond to growing unemployment with renewable energy identified as one of the options. The result was a project that encountered very little opposition. The success of getting community buy-in must also be attributed to the fact that this project includes profit sharing for local individuals as well as a share for the community. The patience and perseverance required in delivering any renewable project, but particularly a community-led one involving public support and private investment, cannot be underestimated. Both the Tipperary Energy Agency and one particular community member who drove the project are given credit for getting this project over the line.