frequently asked questions
- What is Hepburn Wind?
- When did the wind farm start generating?
- Who owns Hepburn Wind?
- Are shares still available?
- How can I buy shares?
- Can I apply for membership if I live outside Victoria?
- I live outside Australia. Can I apply for membership?
- Can I sell my shares?
- What constitutes active membership?
- How accurate are the financial forecasts?
- How is the project financed?
- Will there be a return on investment?
- Will the investment returns be taxable?
- What are the social benefits for the community?
- What are the economic benefits for the community?
- What benefits are shared with those living close to the project?
- What is the Hepburn Wind Community Fund?
- Who developed the project?
- How is Hepburn Wind governed?
- What is a co-operative?
- Who runs Hepburn Wind?
- Does Hepburn Wind publish audited accounts?
- How are members kept informed?
- Why a wind farm?
- Did the wind farm require a planning permit?
- What community engagement has been undertaken?
- What studies and assessments were undertaken during the project’s development phase?
- Why just two turbines?
- How are the turbines be maintained?
- What responsibility do members have for the activities of the Co-operative?
- What kind of turbines are installed?
- What is the wind like on Leonards Hill?
- What is the working life of the wind farm?
- What happens in extreme wind conditions?
- What fire risks do turbines present?
- What difference will these turbines make?
- Couldn’t you just plant trees instead to offset CO2?
- What happens when the wind isn’t blowing?
- Does the area need backup power now there’s a wind farm?
- How is the project paid for power generated?
- How can I buy the power generated by Hepburn Wind?
- How can my community build a project like this?
Hepburn Wind is the community co-operative responsible for the first community initiated and owned wind farm in Australia ? the Hepburn Community Wind Farm. The 4.1 MW wind farm comprises two turbines and is located at Leonards Hill, in Central Victoria, just south of Daylesford and approximately 100 km north-west of Melbourne.
Hepburn Wind is the trading name of Hepburn Community Wind Park Co-operative Ltd, a co-operative registered in Victoria, Australia.
Hepburn Wind was established in 2007 by the Hepburn Renewable Energy Association, now known as SHARE.
The Hepburn Community Wind Farm first exported electricity into the local electricity network at 10.20am on 22 June 2011.
Hepburn Wind is owned by its members, numbering more than 1900 (as of 1 November 2011). Just over half of Hepburn Wind’s members identify as local to the project.
Since each member receives a single vote at meetings, all members have an equal say. In order to ensure that the interests of the local community remain paramount, the board aims to maintain majority local ownership.
As of June 2011 we have raised all the funds required to build and operate the wind farm, however we continue to favourably consider applications for new membership in order to give as many people as possible the opportunity to own a part of a wind farm.
Additional funds received are being applied to reduce our modest bank debt.
Shareholding in Hepburn Wind is open to members. Applicants for membership must satisfy the board that they will meet the active membership test (see below) on an ongoing basis.
Due to factors outside our control, membership is generally constrained to those living in Victoria, with some exceptions. (See below.)
Hepburn Wind is presently unable to accept applications from those residing in Australian states and territories other than Victoria.
For some time, the States and Territories have been working on a ‘mutual recognition’ framework for co-operatives. Once this has been implemented the board will revisit this issue.
We understand that there are no local laws restricting us from accepting applications from outside Australia. However international applicants should make their own enquiries as to whether there are local restrictions or tax implications.
We will deduct any bank fees incurred from processing international applications, capped to AUD $10 per application. We will cover the bank fees at our end required to make payments to the home bank account as and when these are made. The recipient will be responsible for all other fees, charges and taxes.
Shares in Hepburn Wind are not tradable on a registered stock exchange, however we maintain a closed register of buyers and sellers for shares. The register enables us to put willing buyers into contact with those members who wish to sell their shares. An intending purchaser must be an existing member or approved by the board for membership.
In accordance with the Co-operatives Act, we may, at the request of a member, repurchase their shares subject to our financial capacity and the board’s discretion. We are prohibited from purchasing more than 5% of our total share capital in any one year.
As per our rules, all members must satisfy the active membership test. The test requires that members must, on an on-going basis:
- purchase or consume energy generated directly or indirectly by the co-operative, or
- subscribe to the co-operative’s information advisory service relating to energy usage and efficiency, or
- subscribe to the co-operative’s newsletter.
Currently all members are subscribed to the newsletter without charge.
From time to time we release financial forecasts based on a range of assumptions determined by our board of directors.
The project’s performance is a function of the quantity of energy generated, market prices and various expenses.
The quantity of energy and Large-scale Generation Certificates (LGCs, formerly RECs) created by the product is subject to wind resource, the ‘availability’ of the turbines and associated electrical plant and the ability of the electricity network to accept energy generated.
The value of generated electricity and certificates are subject to market fluctuations.
Project expenses include operations and maintenance of the turbines, insurance and compliance obligations relating to the operation of the wind farm. In addition, the project incurs costs related to membership services and community engagement.
Our financial forecasts are prepared based on market knowledge obtained from a range of reputable sources. While great care is taken, neither Hepburn Wind nor its directors, officers nor advisors take responsibility for the accuracy of any forecasts.
The project’s financing comprises:
- capital from members and applicants ??$9,640,225
- Sustainability Victoria RESF grant ? $975,000
- Regional Development Victoria RIDF grant ? $750,000
- Bendigo and Adelaide Bank loan (10 years, not fully drawn) ? $3,100,000
- a debt guarantee from Embark Australia ? $1,000,000
Future Energy underwrote a significant portion of the early stage development costs.
Hepburn Wind receives income from the sale of the electricity generated by the wind farm and associated renewable energy certificates. Information regarding the anticipated level of distributions may be found in the latest financial forecasts.
Now that the wind farm is operational, the board expects to generate surpluses. The project’s cash reserves will be limited in the early years due to debt service obligations and weak market prices. For more information see the financial forecasts.
The board is responsible for recommending the level of rebates and dividends to members for approval at the Annual General Meeting. The directors anticipate that the majority of earnings will be paid to member shareholders as rebates or dividends after making allowance for expenses, working capital, taxation and the contribution to the Community Fund.
Returns received from Hepburn Wind will likely be a combination of dividends, rebates and capital returns. These returns will generally be taxable under the Australian taxation system. It is currently forecast that the project will generate few franking credits in the early years of the project.
As every individual’s taxation situation is different, members should seek their own legal and tax advice before investing. We hope you understand that we are not in a position to provide tax advice.
The project is demonstrably delivering a host of significant social benefits to our local area. The project has:
- set a new standard in community engagement for infrastructure, helping to greatly reduce the reflexive opposition common to other wind farm developments
- created a wealth of intellectual property, which is being made freely available to others
- created new employment and skill development opportunities for our four local staff members and more than a dozen local service providers
- ‘up-skilled’ more than 30 volunteers in areas as diverse as community engagement, project management, finance, communications and contract negotiation as the project interacts with a large number of community, commercial and government stakeholders in a complex industry
- empowered many in the community with a sense of pride and purpose, fostering a range of new and complementary local sustainability groups
- designed an innovative benefit sharing model that will ensure that the whole community stands to benefit.
With over $13.5m invested and an anticipated working life of over 25 years, the project is one of the most significant projects undertaken locally in recent decades.
The community enterprise model provides many economic benefits for the region:
- construction employment ? construction of the wind farm involved over seven work-years of on-site employment.
- local purchasing ? the project strives to use local service providers wherever possible ? not just for construction and operations, but for catering, graphic design, internet service, accountancy and other consulting services. Project expenditure includes more than $7 million of Australian content with more than half of this spent in regional Victoria.
- ongoing employment ? HW currently employs four local staff in the operation of the wind farm and the management of the co-operative.
- return to local investors ? with very significant local investment, a large proportion of the ongoing profits of the project will remain in the region.
We have implemented a number of innovative mechanisms to ensure that additional benefits are provided to the approximately 65 households in a defined geographical area of up to approximately 2.2 km from the wind farm.
- Neighbourhood share offer ? neighbours in the immediate vicinity of the wind farm have been offered a gift of equity in the project. This is a ‘no strings attached’ offer which provides neighbours with a share in the success of the wind farm as well as conferring rights of ownership such as the opportunity to vote at meetings of the co-operative.
- Electricity affordability program ? we have developed a program that provides a contribution to electricity bills for each household in the neighbourhood that signs up to the Red Energy ‘Community Saver’ retail electricity offering.
- Visual screening ? we have offered tree planting to all neighbours with a view of turbines, rather than just the 18 required by our permit conditions.
- Community Fund ? a portion of the Fund will be focused on projects and institutions (such as the Leonards Hill Hall and the Leonards Hill CFA) in the immediate neighbourhood area of the wind farm.
Our project was founded with the goal that the whole community should have the opportunity to benefit from the wind farm, not just those with a direct financial stake.
One way we deliver on this goal is via the Hepburn Wind Community Fund. We have committed to contributing more than $15,000 per turbine per year directly to the fund and have implemented other measures that will see this grow significantly. (It is typical for wind farms to contribute $500 ? $2000 per turbine annually to a community fund.)
Over time we plan to contribute more than $1,000,000 in grants to catalyse local initiatives that build the long term environmental, social and economic sustainability of our local area.
The Fund is administered by a committee at ‘arms length’ from the board. Details of the Fund’s guidelines, application details and grants (as they are announced) can be found here.
The early stages of the project were a co-operation between Hepburn Shire locals (initially a group of friends, then a steering committee, then the Hepburn Renewable Energy association and finally as Hepburn Wind) and Future Energy Pty Ltd, a Melbourne based developer of medium scale renewable energy projects.
In recognition of their key role played in the early stages of the project and financial risks incurred, Future Energy received a development fee with a nominal value of $400,000, partly payable in shares of the co-operative.
Hepburn Wind engaged a large number of service providers directly and indirectly over the course of the project including Ballarat University, Bendigo and Adelaide Bank, Bleyer Lawyers, Consolidated Power Projects, David Sparks, Designscope, Dr Greg Richards, Elliot Accounting, Elmoby, Entura, Full Cycle Gardens, Future Energy, Garrad Hassan Pacific, Hardrock Geotechnical, John Cleary Planning, Komesaroff Legal Pty Ltd, Laser Electrical, LiMA Acccounting + Consulting, Marshall Day Acoustics, Maddocks Lawyers, Mattila Lawyers, Montimedia, pitt&sherry, Peter Wallace, Powercor, REpower Systems, Senergy Econnect Australia, Spade to Blade and Terra Culture Pty Ltd.
We are extremely grateful that many companies provided their services at discounted rates.
In addition, we have received valuable advice and assistance from a large number of members and individuals with a passion for renewable energy and our community.
Hepburn Wind is governed by a board of directors, elected by the member shareholders at the Annual General Meeting (AGM) on the basis of the co-operative principle of ‘one member, one vote’.
All members 18 years and over may nominate for a directorship in the period prior to the Annual General Meeting, as prescribed in our rules.
A co-operative is similar to a public corporation, in that it is incorporated, issues shares and has all the powers of a natural person.
Whereas the primary responsibility of the board of a company is to maximise the financial return to shareholders within the boundaries of the law, co-operatives are established for the benefit of their members.
Members of a co-operative are generally the co-operative’s customers. In the case of Hepburn Wind, as the co-operative is not an energy retailer, members may only become customers indirectly through arrangements with Red Energy. The member’s benefit is only partly realised by the payment of dividends or rebates. In this case, Hepburn Wind provides its members, the local and broader Australian community with the additional benefit of producing emissions free electricity.
Unlike companies, co-operatives are democratic institutions. Regardless of the number of shares any one shareholder owns, the shareholder always has one vote at meetings. For example, a member investing $100 has as much say as a member investing $100,000.
Hepburn Wind is managed by a board of directors who have been elected by our members at general meetings.
We currently employ four local staff and draw on our board and other volunteers.
Our board members give their time on a voluntary basis and may only receive reimbursement for limited expenses incurred directly in relation to the operation of Hepburn Wind. All current directors are members and will therefore receive returns from their investment in the same manner as other members.
Board members are chosen by members by secret ballot (‘one member, one vote’). At each Annual General Meeting a number of directors must resign in accordance with our rules.
Yes. Hepburn Wind is a co-operative incorporated under the Victorian Co-operatives Act 1996 (as amended). The Co-operatives Act imposes standard accounting and auditing requirements on co-operatives similar to those imposed on companies.
Our financial statements are prepared by local accounting firm LiMA Accounting + Consulting and are audited by local auditor Elliot Accounting. Our financial statements form a part of our Annual Return which is lodged with the Victorian Registrar of Co-operatives in accordance with the Co-operatives Act. Our annual returns are available in the documents section of our website.
We are required to report our financial performance to members on an annual basis. At each Annual General Meeting audited financial accounts are presented as part of our Annual Report.
In addition, we regularly update our members and other stakeholders via email and our website. A selection of our newsletters are archived on our website. Energy production reports are available on our website and selected details are published in our local paper, the Hepburn Advocate.
Our founders were determined to build a renewable energy project that would supply a significant portion of the local electricity demand. The maturity of commercial wind turbine technology, coupled with our above average local wind resource made a wind farm the obvious choice.
The project was required to submit a planning application to the Hepburn Shire Council. The permit was issued in February 2007. According to the local paper, the council received 325 submissions in support of the proposal and 18 objections.
The permit was challenged at the Victorian Civil and Administrative Tribunal (VCAT) in June 2007. Although the challenge was unsuccessful, a number of significant conditions were placed on the project.
Hepburn Wind and the Hepburn Renewable Energy Association (HREA, now known as SHARE) have worked hard to build a strong base of support within the community. Since inception in 2005, Hepburn Wind and HREA have:
- run more than 130 street information stalls in the local area
- conducted more than 100 personal home visits to local residents
- run bus tours allowing more than 250 locals to visit turbines at nearby wind farms
- sent more than 20 project update letters to local residents
- been featured in numerous articles in local, state and national print, television, magazine and radio media
- advertised extensively in the local newspaper
- sponsored numerous events including the International Day of Climate Action and Walk Against Warming, SwissItalianFesta and ChillOut
- appeared at many events including SustainableLivingFestival, AlternativeTechnologyAssociation meetings and the DaylesfordNewYearsEveParade
- actively engaged with local sustainability groups such as SHARE,?WISE, MRSG, MASG, BREAZE, HRN, BSG, MEG and others
- sent more than 40 news updates to an email list of more than 6000 people who have registered their interest in the project
- maintained a presence on facebook and twitter
- run public forums about the wind farm and general sustainability issues.
Increasingly, we are being invited to speak at events around the country ? in 2011 we have addressed more than 30 groups around the country.
As part of the planning permit application, the following studies and assessments were undertaken:
- fauna (including birds and bats)
- wind energy
- cultural heritage
- landscape and visual assessment
- shadow flicker / blade glint
- noise impact (pre- and post-construction)
- electricity grid connection
- electromagnetic interference
We are committed to maximum transparency. In this spirit, relevant reports are freely available on the planning and compliance section of our website.
The scale of the project is suited for the energy requirements and financial resources of our community. The site of the Hepburn Community Wind Farm is suitable for only two turbines. Our rules permit us to invest in more wind turbines, however any additional turbines will not be on Leonards Hill.
We have entered into a comprehensive and long-term maintenance and services contract with REpower Systems.
REpower employs service technicians that maintain turbines at several sites across Victoria. The turbines are also monitored from a 24 hour control room in Germany.
Our wind farm manager lives approximately 800 m from the turbines and oversees works on site.
Each individual member’s risk is limited to the value of their fully paid up share capital (as well as any personal debts owing to the co-operative) upon winding up. Members are not otherwise liable for the activity of the co-operative.
We maintain a comprehensive insurance policy which specifically addresses risks of claims arising from the operation of the wind farm.
The Hepburn Community Wind Farm comprises two REpower MM82 wind turbines, each with a maximum capacity of 2.05 MW. The wind farm has been designed to output 4.1 MW when operating at full power. The wind farm has a predicted capacity factor of 34%.
The planning permit constrained the maximum height of the wind farm to 110 m from ground to blade tip. The REpower turbines sit on a 68 m tower and have a blade length of 41 m. At this height, no aircraft warning lights are required.
A wind monitoring mast was installed on the Leonards Hill site in August 2006. After 12 months of data had been collected, Garrad Hassan Pacific Pty Ltd, a recognised world leader in wind energy analysis, was engaged to perform an expert wind energy assessment for the site.
Garrad Hassan’s assessment predicts a hub-height average wind speed of 7.7 m/s with a standard error of 0.50 m/s. The wind energy analysis is available in the planning and compliance section of this website.
Garrad Hassan analysed the detailed wind data and the nominal performance of the chosen wind turbines and predicted that the average annual energy production of the wind farm will exceed 12.2 GWh in 50% of years, 10.8 GWh in 75% of years, and 9.4 GWh in 90% of years.
While the methodology applied is rigorous, the predictions are based on a number of estimates and assumptions which may lead to error (positive or negative) in the predictions. Furthermore, actual performance of any system harnessing natural forces will exhibit variability, and as such there is a significant risk that average estimates will not be met in a given year.
The directors believe that 25 years is a reasonable estimate for the life of the turbines. Much like any machinery, maintenance costs will increase as the turbines age and at some point in the distant future the current turbines will reach the end of their economic life.
Many years from now our board of directors will consult with members and the landowner and determine the appropriate course of action, currently expected to be either:
- decommissioning the turbines, returning residual funds to members
- recommissioning of the wind farm (known as ‘repowering’).
On the rare occasions that the wind exceeds 25 m/s, the turbines automatically ‘feather’ their blades so that they catch minimal wind. A brake is applied and the turbine stops and waits for the high wind conditions to pass.
The blades, towers and foundations are designed to withstand wind speeds well in excess of anything that can reasonably be expected at Leonards Hill.
Turbine fires are very rare, but occur very occasionally, just as they do with other activities that involve electricity, heat and machinery such as cars, tractors, harvesters, trains, buildings, mines, schools and houses.
It is our understanding that over the past 15 years there have been only three turbine fires in Australia, all of which were contained. In context, there are an estimated 220 haystack fires each year in Victoria alone.
Each turbine has a lightning collection system providing a safe path for lightning from the blades, down the tower and into a copper earth grid underground. By providing an alternate and preferred route for lightning, it is likely that turbines reduce the incidence of lightning induced bush-fires in the local vicinity.
The CFA was consulted both during the planning process and for the development of our fire management plans.
Before our two turbines were built, the overwhelming majority of electricity used in the area was generated from fossil fuel sources. Most of this would have been transmitted through some 400 km of power lines from the coal-fired power stations in the Latrobe Valley.
Since June 2011, we have been generating clean energy in Leonards Hill and feeding it directly into the local grid. Electricity generated locally reduces demand that the local area places on the wider network ? and due to losses in the network, every kWh we generate displaces the need for an estimated 1.1 kWh to be generated elsewhere.
Detailed modelling by independent engineering firm Garrad Hassan based on actual wind data predicts that the wind farm will generate an average of 12,200 MWh per year. This is equivalent to the demand of 2300 average Victorian Households.
This locally generated renewable energy from our wind farm is expected to prevent an average of 12,200 tons of CO2 from being released into the atmosphere every year.
According to a leading carbon offset organisation, to offset as much CO2 as our wind farm you’d need to plant 45,523 trees every year. While we love trees and our members have collectively planted hundreds of thousands of them, trees don’t generate electricity and do nothing to reduce our community’s reliance on burning fossil fuels for electricity.
Significantly reducing our community’s carbon footprint requires a mix of initiatives, including renewable energy generation.
When the wind is very low or still, our turbines don’t generate and our area reverts to importing power from elsewhere. When the wind is blowing a gale our power makes its way to houses well outside our local area.
On average the wind farm powers an estimated 2300 homes, but at peak production and minimum local demand we power many more times than this. Interestingly, in our area peak demand is at 1am in the morning due to off-peak water heating.
No. Simplistically, our project is to a town as a solar array is to a house ? we are ‘seen’ by the network as a reduction in demand.
No generator works 100% of the time, and no generator can be said to be backing up any other. The sophisticated National Electricity Market is made up of hundreds of generators who, co-ordinated by the market operator AEMO, guarantee that supply matches demand at all times.
On average, our turbines are generating 85% of the time, however the amount generated obviously varies with the amount of wind.
Traditionally, most wind farms enter into long term Power Purchase Agreements with a retailer. At the time of developing the project, our board determined that the prices on offer were not reasonable and chose instead to sell our energy at the market price.
As such we are exposed to full price and volume risk.
Market prices in the National Electricity Market are set in a form of auction every 30 minutes throughout the day. At times of high demand prices can be well over $1000 per megawatt hour and when demand is low the price can even go negative. In 2010 and 2011 prices have averaged around $30 / MWh.
Hepburn Wind accesses the energy market through an offtake agreement with Red Energy.
We sell our Large-scale Generation Certificates (formerly RECs) to a number of parties including Red Energy.
Red Energy, a 100% Australian owned energy retailer and subsidiary of Snowy Hydro, purchases all of the energy generated by the wind farm at the prevailing National Electricity Market price.
Hepburn Wind and Red Energy have collaborated to create an electricity retail product ? Community Saver. Under the terms of our agreement, Red Energy makes a contribution to the Hepburn Wind Community Fund quarterly for every customer in good standing.
Any Victorian (member or not) may sign up to the Red Energy Community Saver retail product and benefit our community.
Communities all around Australia have expressed interest in building their own renewable energy projects utilising a range of technologies ? including wind, solar, bioenergy and mini-hydro. Many have committed themselves to generating clean energy locally and some already have well developed initiatives.
We are working with the non-profit body Embark to capture our learnings and make them widely available so that other communities may adapt the ‘Hepburn Model’, as it is often called, to suit their unique requirements.
A good place to start learning is the Embark wiki, a collaborative knowledge base developed as a best practice toolkit for developing a local renewable energy project. Articles focus on a range of issues including technical, governance, and community engagement.