Scottish wind powers housebuilding in groundbreaking joint venture

Amid the rolling hills and woodland pastures of south-east Scotland, a wind of change is blowing through communities where low wages and casual work sit uneasily alongside the popular image of timeless market towns and pretty coastal villages.

High above rich arable land by the North Sea, three tall wind turbines, blades spinning wildly, have started generating electricity for the national grid with two social purposes: to sell energy and use the income to deliver hundreds of new homes in a scattered rural community while, at the same time, providing additional funds for similar schemes elsewhere in Scotland.

The groundbreaking initiative is being hailed as a breakthrough in a distinctly different political climate from that in England. “What is happening here is a ‘first’ – relieving housing pressure by harnessing the wind for the benefit of everyone,” enthuses Scotland’s energy minister, Paul Wheelhouse.

Social housebuilding is actively supported by the Scottish government. Unlike its Westminster counterpart, it has ended the sale of public housing in “right-to-buy” schemes, once seen as the late Margaret Thatcher’s enduring legacy. It is pumping more money into affordable housing. And, unlike in England, Wheelhouse insists that onshore windfarms are similarly supported rather than discouraged, in a drive to ramp up generation from renewable sources.

Bring two charities together, Berwickshire Housing Association (BHA) and Community Energy Scotland (CES), in a new joint company called Berwickshire Community Renewables, and things certainly happen, thanks to one vital ingredient: wind. “We have lots of it,” says Helen Forsyth, chief executive of the housing association, which has 1,800 social homes in the old county of Berwickshire, in the Scottish borders. “It blows a lot up here.”

But when planning began in 2009, the financial climate was very different. BHA had already lost 450 homes under the former right-to-buy scheme, similar to the continuing English model – with a modest 150 houses built since 2000 in no way making up for a shortfall in an area where 50 applicants can chase every available vacancy for a social home. “Things were pretty scary,” recounts Forsyth. “Our stock was depleting and you became increasingly concerned that you wouldn’t be able to sustain the organisation.”

So BHA thought radical. It needed a new cash generator to support affordable housing in a 650 sq mile county (1,684 sq km) with a population of only 20,000, mainly in three small towns – the old fishing port of Eyemouth, the largest, followed by Duns, Coldstream and a string of villages.

Harnessing wind power became the answer. Well aware that opposition in other areas has become an unstoppable force, BHA undertook market research to determine attitudes. While support was overwhelming, the proposed height of the three turbines was cut from 125 to 115 metres to address some local concerns.

Discussions began in 2009 against a backdrop of tighter financing for social housing. Eventually, a 183m hill at Hoprigshiels farm, above the village of Cockburnspath, near the main north-south A1, was selected. CES, which has helped scores of renewable schemes to get off the ground – from large windfarms in the Western Isles to small solar projects in the Highlands – became the ideal partner.

Soon pump-priming with a £1.75m loan from a Scottish government renewable energy investment fund triggered a larger £10.6m bank loan for a project that, theoretically, could provide energy for 5,900 homes. In reality, the energy is transmitted through a new sub-station down a new six-mile cable linking the three turbines with the national grid northwards via another new sub-station.

While the main priority initially is paying back the loan, the two partners eventually expect to make £30m from selling the electricity to the grid – with BHA getting £20m and CES the remaining £10m to help fund other projects. But Jamie Adam, the project manager from CES, reckons that the scheme will begin generating modest cash for both partners over the next 12 to 18 months. “But all that, of course, depends on the wind,” he cautions. “In 15 years’ time, however, the loan should be paid off.”

For her part Forsyth, who has worked in housing and social care in England and Scotland, believes they will be well on their way to building an extra 500 homes “at least” by the time the loan is paid off. It will also help with the wider objectives of BHA to “create thriving rural communities”. She sees the association as a vital part of the social glue binding housing to the community by encouraging volunteering and other activities. BHA also runs a children’s nursery next to its headquarters in Duns.

Looking over the border into England, a few miles to the south, Forsyth can only draw comfort from the wider political consensus in Scotland over the need to support social and affordable housing with a substantial spending boost. The Holyrood government has set ambitious targets to build 50,000 affordable homes by 2020-21 – 30,000 of them for social renting – in a ramped up, £3bn investment programme.

With lifetime tenancies all but ended for social housing in England, Forsyth says she is relieved to be working in an environment that values public provision. And with right-to-buy sales now abolished in Scotland, she knows that BHA can give lending institutions – on which associations depend – the necessary confidence that its housing stock is secure when loans are sought. “Lenders want certainty,” she adds. “What is happening in England is terrible ... the idea that you cannot have a secure home. We have a lot of tenants working very hard, sometimes with two to three jobs, finding it difficult to get by ... and they deserve a house. These people are working hard delivering the services we all need and they shouldn’t be made to feel lesser mortals because they cannot afford to buy a house.”

High on the hill at Hoprigshiels, with a piper in full flow playing Scotland the Brave, Wheelhouse hailed the scheme as a pacesetter, as he smashed a bottle of whisky against the base of one turbine to inaugurate the project last month. “This just shows what can be achieved if communities are involved in the process from the beginning,” he said. “The terms of the debate change from a windfarm being seen as doing something to people to an enterprise doing something for people.”

With the nearby village of Cockburnspath likely to get four new affordable homes, the farming couple who own the land on which the turbines are spinning insist the small windfarm is supported by locals and their community council. “They can see the benefit for everyone,” says Stuart Phaup, who with his wife, Edith, farms 283 hectares of mixed arable land. “We are all supporting it.”

Nicholas Gubbins, CES chief executive, praised an “understanding and tolerant” local community for helping Scotland become the leader of a British and European movement dedicated to generating electricity for social purposes.

Standing below a turbine, Forsyth said she was thrilled that a small housing association had managed to develop an innovative funding model to provide desperately needed homes. Fresh from her language class the night before, she invoked the Italian for windfarm, le pale eoliche, as so much nicer than its English equivalent. “It means the blades of the god of the wind,” she told the assembled dignitaries. “I am really proud of what we have all achieved. It has been an epic adventure.”