Expert blog – September 22, 2021
Investment Manager Nienke Rijpstra describes in this blog how StartGreen can help both developers and citizen initiatives set up a new energy project.
Involving citizens early
In the coming years, we still need to generate a great deal of solar and wind energy in the Netherlands to achieve the climate goals. The Climate Agreement aims for 50% citizen participation in the energy transition to create the much-needed social support for solar and wind farms. StartGreen also believes it is important that citizens are given a say right from the start of a solar or wind project and that they can share in the returns.
Diverse interests
The Netherlands currently has nearly 500 energy cooperatives. Most would like to participate in a solar or wind farm, if only to have a say in the design. Developers, in turn, are increasingly being required by municipalities to involve citizens. However, not all developers are willing to share ownership, and the level of professionalism among energy cooperatives varies considerably. Furthermore, municipalities do not always oversee the implications of mandatory citizen participation.
Two sides
StartGreen can be the connecting link, partly through our role as manager of Energiefonds Overijssel. Together with the energy cooperatives, we engage in discussions with developers and the municipality regarding implementation. We provide input on financing and structuring.
Our involvement works both ways: we help not only citizens but also developers to meet their citizen participation obligations. They are required to give up a portion of the participation, and thus a portion of the profit. It is quite understandable that they enter into the collaboration with some reluctance. It is therefore helpful if they can negotiate with a party that has the necessary expertise.
Development financing
In addition, energy cooperatives can apply for development financing from Energiefonds Overijssel. Such a cooperative has a significant responsibility toward what can sometimes be hundreds of members. Moreover, it must take various laws and guidelines into account, such as the GDPR. With our loan, the cooperative can, for example, hire external experts who can professionally support the members with subsidy applications and discussions with the municipality. We also put them in touch with other cooperatives so they can learn from each other.
Various financing options
Energiefonds Overijssel regularly finances solar energy projects. As a result, we know almost all energy cooperatives in Overijssel, about 10 of which we have now financed. Together with the Goed Veur Mekare cooperative, we are currently working on realizing and operating a solar farm with 20,456 panels at Noordmanshoek in Wijhe.
We work flexibly with cooperatives to determine how we can finance a project. In some cases, Oneplanetcrowd manages citizen participation for developers by raising funding from our crowd of individual investors. In addition to solar projects, they also finance wind turbines and other alternative energy sources.
More flexible than the bank
Banks generally find it daunting to finance energy cooperative projects, precisely because they are not professional. Banks also often think within existing frameworks; we are more flexible in that regard. We have worked with cooperatives so often that we know where the risks lie, so we are willing to take them on. Moreover, banks often only start at 5 million; we finance from as little as one million, and Oneplanetcrowd from even lower amounts. We can also provide risk capital with which they can develop, for which there is no room at a bank.
Say in construction
Furthermore, for energy cooperatives, having a say is sometimes even more important than returns. For example, they want a solar park to have plenty of greenery around it. Preferably with a function, such as a dog park or sports park. That is why it is good for a cooperative to be able to contribute ideas from the start. Unlike wind farms, there are no legal rules for solar parks. However, the municipality often only issues a construction permit if the plan includes planting that obscures the direct view. In that case, it is nice for citizens to be able to walk their dogs or play sports there.
Added value
StartGreen is so much more than a green financier in the energy transition. Our added value also lies in our knowledge and experience, which enable us to think along with energy cooperatives, municipalities, and developers. Precisely by knowing all interests and thinking in terms of possibilities, StartGreen can help make citizen participation possible. For me, the challenge that citizen participation brings is the motivation to bring parties together and prove that it is possible.
