This information is intended to answer some common questions about the Hydro scheme and community shares: if you want any further information, have a question, or would like to be kept informed please contact
LEG Power.

FAQ

1. The Hydro Scheme

Where is the Abhainn Greadhain community hydro scheme?

It is in Glenachulish, to the south of the Ballachulish bridge. The water intake will be at an altitude of 150m and of a relatively low design, due to the shape of the river. The penstock (pipeline) route is still being finalised but it will be buried and head down the glen to the powerhouse near the forestry car park.

How much electricity will it produce?

The scheme will produce about 544 kW when running at full power and is expected to generate over 1.7 GWh of electricity per year This is enough electricity for 420 homes and will save 850 tCO2e compared to a modern gas power station.

What type of Hydro Scheme is It?

This is a ‘run-of-river’ scheme so there is no reservoir at the top as in in the large schemes around Lochaber. These are among the cleanest forms of energy generation available.

What happens to the surpluses generated by the Hydro?

The financial surplus from the Scheme, once the loan repayments and operational costs have been met, will be gifted to Lochaber Environmental Group to support its sustainability and that of its environmental projects across Lochaber. A proportion of the surplus will also be given to the local communities of Ballachulish which includes Glenachulish. LEG’s work on sustainability, energy efficiency, local food production, education and other areas is a great way to use surpluses from a renewable energy scheme.

Will any trees have to be felled during construction?

During construction there will be some felling of trees to get machinery in for laying the penstock. The vast majority of the trees to be felled are commercial plantation and are nearing their ‘harvest’ time. These are expected to be replaced 1 for 1, though Forestry and Land Scotland (previously Forestry Commission) has the authority to say where they go and what species are planted.

All tree and river work are closely controlled and appropriate environmental surveys, will be carried out and followed through.

Will the powerhouse which houses the turbine be noisy?

The powerhouse will also have special features to reduce noise, which is necessary when sited near people’s homes.

Is there a deadline for this Scheme to be up and running?

LEG has secured support for the scheme through the Feed in Tariff (FITs), which pays a small amount per kWh to help renewable generation. The scheme was in the last round for FITs and there is no longer support of this kind available for small hydro schemes. We must be generating by September 2021 in order to get the FITs, so we are on a tight timescale!

What happens to the electricity which is generated?

The electricity generated by the scheme will be sold to the grid, and then be part of the mix we use in our homes and businesses.

How will LEG Power raise the funds to build the Hydro Scheme?

LEG Power will use a Community Share Offer to raise some of the funds required. This will complement the funds promised by two commercial lenders to construct the Hydro scheme by the deadline.

How has the development work so far been funded?

LEG and LEG Power have been supported by Local Energy Scotland with a grant and loan through the Community and Renewable Energy Scheme (CARES). Their support is essential to enable small community groups take on such a large project. 

In addition, Community Shares Scotland has provided help in kind for the registering of LEG Power as a Community Benefit Society and a grant for promoting the Community Share offer.

2. Community Shares

What are Community Shares?

Community Shares are a practical way of supporting a local enterprise that serves your community: they have been used by communities across Scotland. The share capital will help finance the business and in return you might receive limited interest on your investment. And if you want your money back you have the right to withdraw some or all of your share capital, subject to terms and conditions.

What did Lochaber Environmental Group set up a new organisation called LEG Power?

Community shares can only be issued by co-operatives or community benefit societies. Lochaber Environmental Group (LEG) set-up a new community benefit society, known as LEG Power, to take forward the hydro-electric scheme at Glenachulish and to raise funds for the community. LEG Power will be able to issue community shares to raise the funds needed to build and operate the hydro-electric scheme. It will also be able to develop other renewable energy schemes in the future and issue more community shares to maximise community ownership and involvement.

What happens to the surplus income from the Hydro?

As the Scheme begins to generate a financial surplus, this money will provide a sustainable income to Lochaber Environmental Group and its environmental projects, as well as a proportion being allocated to the community in which the Hydro scheme is situated.

What is different about Community Shares?

The primary motivation for buying community shares is usually different from that of shareholders in companies: it is to support the social purpose and objects of the enterprise which benefit the community. Financial motivation is at best secondary though the rate of return is expected to be reasonable.

Community shares refer to a distinct type of share capital called Withdrawable Shares and they behave differently to conventional share capital, (which are also known as ordinary or transferable shares). The difference is explained below:

Transferable Shares: most companies financed with equity use a form of share capital known as transferable or ordinary shares, which can be transferred or sold by shareholders to a third party. Investors buy shares in the expectation of two types of financial return: a regular dividend on shares, and the possibility of capital appreciation, in which case they would expect to sell the shares at a higher price than they paid for them. This is the most common form of share.

Withdrawable Shares: withdrawable share capital is completely different. This type of share capital cannot be transferred between people. Instead, the society allows shareholders to withdraw their share capital, subject to terms and conditions that protect the society’s financial security. Shareholders in LEG Power will be allowed to withdraw their share capital, and therefore it provides a straightforward way of getting your money back when you want to cash-in your shares.

What benefits can Shareholders in LEG Power Expect?

  • You will potentially receive a greater financial return through interest payments than you would currently gain by putting your money in the bank
  • You will have one vote at LEG Power meetings, regardless of the size of your shareholding, and you can stand for election to the Board
  • You will be able to apply to withdraw your shares in the future.

And in addition to your own benefits you will help us to achieve our vision of a greener future through development of a new, community owned renewable energy scheme and you will be supporting the sustainability of Lochaber Environmental Group and its environmental projects.