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frequently asked questions

 

What is Hepburn Wind?
Hepburn Community Wind Park Co-operative Ltd (Hepburn Wind) is a co-operative registered in Victoria, Australia (Registration Number: G0003442Y, ABN: 87 572 206 200). Hepburn Wind aims to build and operate a two-turbine wind farm at Leonards Hill.

Hepburn Wind was established by the Hepburn Renewable Energy Association, now known as SHARE.

How can I buy shares?
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.

Prospective member shareholders should read the Membership and Share Offer and seek independent financial advice. A membership and share application form appears at the rear of the Membership and Share Offer.

There are constraints on investment for those living outside Victoria (see below).

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Can I apply for membership if I live outside Victoria?
The Board is permitted to accept applications from those living outside Victoria if any of the following apply:

Acceptance of applications from other non-Victorian residents is possible under certain circumstances, however due to factors beyond our control, acceptance may take many months and may ultimately be unsuccessful (see below). If, for any reason, we are unable to accept an application, the entire funds of that application will be returned.

Please contact our Executive Officer for more information.

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Why are non-Victorian applications treated differently?
Hepburn Wind is a co-operative under Victorian legislation. Not only does this structure meet our community objectives, including ‘one member, one vote’, it also greatly simplifies fund raising within the local area. Unfortunately, the Corporations Act places constraints on raising funds outside a co-operative’s home state. As such, the place of our offer is Victoria, and it is made to Victorian residents.

Within weeks of releasing our initial offer Hepburn Wind received applications from non-residents of Victoria in excess of the allowable limits in the Act. An exemption was granted by the Australian Securities and Investments Commission (ASIC) allowing the Co-operative to accept interstate applications received up until the formal close of Hepburn Wind's first offer.

For some time, the States and Territories have been working on a ‘mutual recognition’ framework that is expected to greatly simplify this process. Whilst we had been expecting implementation of the new framework during 2009, it now appears unlikely to be implemented before the completion of our capital raising period.

Hepburn Wind will released an updated Membership and Share Offer on 28 April 2010. Again the place of the Offer is Victoria, and is made to Victorian residents. The closing date for this offer was extended to 19 July, 2010.

At the end of the offer period, if the number of interstate applicants exceeds the limits set out in the Corporations Act, Hepburn Wind intends to again apply to ASIC for exemption. ASIC acceptance, it should be noted, is not automatic.

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I am already a member but live outside Victoria. Can I apply for more shares?
Unfortunately, the restrictions relating to investments by non-Victorian residents (see above) applies irrespective of whether the applicant is already a member.

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What is a 'sophisticated investor'?
A ‘sophisticated investor’ is a person who has net assets of $2.5 million or more or has gross income for each of the last two financial years of at least $250,000 a year. These criteria must relate to the same entity to which the offer is made. A qualified accountant must certify that the person/entity satisfies this criteria and this certification must be no more than two years old.

Applicants intending to apply for shares as a ‘sophisticated investor’ should contact Hepburn Wind's Executive Officer to arrange documentation to accompany the application.

Note that for the purposes of the Offer, the ‘sophisticated investor’ classification is relevant only to Australian residents not residing in Victoria.

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I live outside Australia. Can I apply for membership?
The Board understands that there are no Australian legal restrictions on Hepburn Wind accepting applications from outside Australia. However international applicants should make their own enquiries as to whether there are local restrictions or tax implications for investments.

Hepburn Wind 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.

Can I sell my shares?

Shares in Hepburn Wind will not be tradable on a registered stock exchange, however the Co-operative will maintain a register of buyers and sellers for shares. This register will put willing buyers into contact with those shareholders that 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, Hepburn Wind may, at the request of a shareholder, repurchase their shares subject to to financial capacity and the Board's discretion. In any one year, no more than 5% of the total share capital of Hepburn Wind may be repurchased by the Co-operative.

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What constitutes active membership?
As per the Rules, all members must satisfy the active membership test. The test requires that the member on an on-going basis must:

Currently all members are subscribed to the newsletter without charge.

 

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How accurate are the financial forecasts?
The forecasts in the Membership and Share Offer are based on assumptions by the Board of Directors.

Wind farm costs are sensitive to commodity prices, currency fluctuations, global demand and other factors. The financial model includes a contingency to allow for adverse price movements. Ongoing costs associated with the wind farm have also been estimated and an inflation factor has been included to allow for cost increases.

The value of generated electricity and of Renewable Energy Certificates (RECs) created are subject to market fluctuations.

The financial forecasts in the offer document have been prepared based on best available market knowledge from a wide range of sources. Many eyes have been on the numbers and the Board believes that its assumptions are in line with those of other wind projects, however neither Hepburn Wind nor its directors, officers nor advisors take responsibility for the accuracy of the forecasts. Interested parties should familiarise themselves with the Financial and Risks section of the offer document.

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How is the project funded?
The project's funds comprise member funds, a finance facility from the Bendigo and Adelaide Bank and a $970,000 grant by the Victorian Government's Renewable Energy Support Fund.

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Will there be a return on investment?
Investment in Hepburn Wind will generate income through the sale of the renewable electricity generated by the wind farm. Information regarding the anticipated level of distributions may be found in the Membership and Share Offer.

The Board of Directors 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 Sustainability Fund.

The project's cash reserves will be limited in the early years due to debt service obligations. For more information see the Share Offer.

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Will the investment returns be taxable?
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. Hepburn Wind is not in a position to provide tax advice.

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What are the benefits for the local community?
The Directors believes the project brings multiple benefits to the community:

The directors of Hepburn Wind believe that the shire will benefit from the enhanced reputation of the area arising from the community's leadership with this pioneering project.

Furthermore, the Directors believe there is significant value in demonstrating the model of community ownership of renewable energy infrastructure. 

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What is the Community Sustainability Fund?
As a community wind farm, Hepburn Wind believes that the whole community should benefit from the project, not just those with a direct financial stake. It is typical for wind farms to contribute $500 per turbine annually to a community fund. Hepburn Wind plans to contribute $15,000 per turbine per year directly to a Community Sustainability Fund.

Over time Hepburn Wind intends to contribute more than $1,000,000 in grants to shore up the long term sustainability of our local area.

The Fund will be administered by the Board of Hepburn Wind, or a delegated body, who will determine the funding allocations for the most appropriate local projects. The Fund will be established once the wind farm is operational and will have an emphasis on supporting community and sustainability programmes.

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How is Hepburn Wind governed?
Hepburn Wind is governed by a board of nine 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 the Rules.

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How many members does Hepburn Wind have?
As at 15 March 2010, Hepburn Wind has 1099 members. More than half identify as local. Since each member receives a single vote at meetings, all members have an equal say. The board intends to maintain majority local ownership, which will ensure that decisions are made with the interests of the local community in mind.

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What is a co-operative?
A co-operative is similar to a public corporation, in that it is incorporated and has all the powers of a natural person and issues shares to members.

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 the energy retailer purchasing Hepburn Wind's energy. The member’s benefit is therefore only partly realised by the payment of dividends or rebates. The Co-operative in this case 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. That a shareholder with $100 invested will always have as much say as a shareholder who has invested $100,000.

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Who runs Hepburn Wind?
Hepburn Wind is managed by a board of directors who have been elected by the member shareholders of Hepburn Wind at general meetings.

Hepburn Wind currently employs one part-time, paid contractor and relies on the generous time contribution by its board and many active volunteers. Hepburn Wind has also engaged the services of Future Energy to manage the construction of the wind farm.

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Do board members get paid?
The Board members give their time on a voluntary basis and 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.

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How is the board chosen?
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 the Rules.

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Will Hepburn Wind be audited?
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.

Financial statements are prepared and professionally audited and must be lodged with the Victorian Registrar of Co-operatives in accordance with the Co-operatives Act. These statements are available to all member shareholders.

The legal responsibility for the running of the Co-operative resides with the Board and management. The duties of directors of co-operatives are actually more onerous than those of equivalent company directors.

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How will member shareholders be kept informed?
At present Hepburn Wind is required to report its financial performance to its shareholders on an annual basis. At each Annual General Meeting audited financial accounts and an Annual Report are presented. Hepburn Wind intends to regularly update its member shareholders on the performance of the wind farm via email and its website.

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Who is Future Energy?
Future Energy Pty Ltd is a Victorian company established to develop, construct, and operate small to medium-sized renewable energy projects throughout Australia. Future Energy has played a key role in the project since inception.

Future Energy currently owns key project assets which will be transferred when Hepburn Wind signs the key wind farm construction contract and pays Future Energy its development fee.

Future Energy has been engaged to manage the construction and commissioning of the farm on behalf of Hepburn Wind.

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What is Future Energy's financial involvement with the project?
Future Energy underwrote much of the development expenses of the project and carried significant financial risk. Much of this expense has been reimbursed since by Hepburn Wind and Sustainability Victoria through the Renewable Energy Support Fund (RESF).

As project developers, Future Energy is receiving a fee of $240,000 and 160,000 shares on top of reimbursement for project expenses.

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Why a wind farm?
The founders of the project were determined to build a renewable energy project that would supply a significant portion of the local electricity demand. Several technologies were considered, however with the excellent local wind resource and the maturity and viability of wind turbine technology, wind power was the natural choice.

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Does the project have a planning permit?
As the project is under 30 MW, it was assessed under the local planning guidelines administered through the Hepburn Shire Council. 

The planning permit was issued by Hepburn Shire council in February 2007. According to the local paper, the council received 325 submissions in support of the proposal and 18 objections.

The permit was subsequently challenged unsuccessfully at the Victorian Civil and Administrative Tribunal (VCAT) in June 2007. There are no further avenues of appeal.

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What community engagement has been undertaken?
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:

What studies and assessments were undertaken during the project's development phase?
As part of the planning permit application, the following studies and assessments were undertaken:

Is the project limited to just two turbines?
The planning permit only provides for the construction of two turbines on Leonards Hill. A further planning application would be needed to erect additional turbines however the Board believes that a maximum of two turbines are ideal for the Leonards Hill site.

The Rules of the Co-operative state the the primary activities include owning, operating and managing a wind farm or farms. The Board's is presently completely focussed on the Leonards Hill Wind Farm.

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How will the turbines be maintained?
Hepburn Wind intends to enter into a comprehensive maintenance and services contract with the selected turbine provider.

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What responsibility do members have for the activities of the Co-operative?
Member shareholder's risk is limited to the value of their fully paid up share capital (as well as any personal debts owing to the Co-op) upon winding up.

The directors of Hepburn Wind intend to obtain a comprehensive liability and insurance policy, which specifically addresses risks of claims arising from the operation of the wind farm.

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How many wind turbines will there be?
The Leonards Hill wind farm is expected to comprise 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 speed. Detailed analysis predicts a capacity factor of 34%.

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How tall are the proposed turbines?
The planning permit allows for a maximum of 110 m from ground to blade tip. The REpower turbines will be placed on a 68 m tower and have a blade length of 41 m. At this height, no aircraft warning lights are required.

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What is the wind like on Leonards Hill?
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 wind energy analysis predicts that the turbines planned for installation will produce an average of 12,200 MWh p.a.

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What is the working life of the wind farm?
The Directors believe that 25 years is a reasonable estimate for the life of the wind farm. Over the lifetime of the Wind Farm associated equipment will be subject to depreciation. At the end of the 25 year period, the Board of Directors of Hepburn Wind will consult with Members and the landowner and determine the appropriate course of action, currently expected to be either:

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What happens in extreme wind conditions?
Above the cut-out wind speed certain the blades are designed to ‘feather’ so that they are edge on to the wind and ‘lock down’. The blades, towers and foundations are designed to withstand wind speeds well in excess of anything that can reasonably be expected at Leonards Hill.

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What fire risks do turbines present?
Turbine fires occur very occasionally, just as they do with other structures that involve electricity, heat and machinery such as cars, tractors, trains, buildings, mines, schools and houses. It should be noted, however, that turbine fires are extremely rare.

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What difference will these turbines make?
Currently, the overwhelming majority of electricity used in the area is generated from fossil fuel sources, most likely originating from the coal-fired power stations in the Latrobe Valley.

The renewable electricity produced by the Leonards Hill wind farm will be fed into the local grid which is in turn connected to the national electricity network. Electricity generated locally will reduce the demand that the local area places on the wider network.

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 the wind farm is expected to offset 12,200 tonnes of CO2 every year.

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How can I buy the 'green' power generated by Hepburn Wind?
The renewable energy generated by the wind farm is expected to be sold to an energy retailer under a Power Purchase Agreement. The shareholders of Hepburn Wind will then share in the net profits arising from the energy sales.

Hepburn Wind hopes that the selected energy retailer will offer the renewable energy to its customers under its GreenPower product offering.

More generally, Hepburn Wind encourages community members to elect to purchase 100% GreenPower from their energy retailer to support this and similar projects.

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Last updated: 29 July 2010