Community benefits from net zero energy developments: consultation

1. Introduction

This consultation is part of a review of the Good Practice Principles for onshore and offshore renewable energy, which seeks to ensure that our guidance helps communities and developers get the best from community benefits.

Community benefits are additional benefits that developers provide to the “community”, which sit independently of the planning and consenting system. They provide an opportunity to share in the benefits of the energy resource and can have lasting social and economic impacts. Community benefits schemes are a well-established, integral part of renewable energy developments in Scotland, fostering a positive relationship between renewable energy businesses and local communities. These schemes saw over £30 million offered by renewables developers in community benefits in the last 12 months^[1].

Since the publication of the updated Good Practice Principles for onshore renewables in 2019^[2], Scotland’s – and the global – energy system and policy landscape have evolved significantly. Changes in domestic and international markets, regulation, and the emergence of technologies such as battery energy storage and hydrogen electrolysers are shaping our future energy mix and will influence how we can maximise the benefits flowing into our communities.

The first Good Practice Principles for Community Benefits from Offshore Renewable Energy Developments were published in 2015^[3] and were intended to apply to developers in the offshore wind industry, noting that other offshore renewable sectors such as wave and tidal stream are at an earlier stage of development. Since then, some projects in Scotland have created community benefit funds. However, the approach has not been wholly consistent across developments. In recognition of the evolving sectoral landscape, we committed to reviewing and updating the offshore Good Practice Principles. We expect that the refreshed Good Practice Principles will continue to be of interest to other offshore renewable sectors as they develop.

We recognise that renewable technologies are at different stages of maturity, existing in distinct physical, operational, and commercial environments. There is a need to support the growth of industry and ensure the substantial supply chain and workforce benefits are captured here in Scotland, whilst recognising the role that coastal, fishing, island, rural, and in some cases urban communities play in hosting projects, and the electricity network infrastructure required to connect them. There is an opportunity to ensure renewables play a role in securing a just transition to net zero.

Through this public consultation, the Scottish Government is seeking the views of all those with an interest in the social and economic benefits of renewable energy development for people and communities in Scotland. Specifically, it seeks views on community benefits from onshore technologies, such as onshore wind, solar, hydrogen and storage and community benefits from offshore technologies, such as offshore wind. Alongside the online consultation, the Scottish Government will be engaging with key stakeholders, including communities, industry, and the public and third sectors to build as broad a picture as possible of the potential opportunities – and limits – of community benefits from renewable energy. The Scottish Government has commissioned research on the provision of community benefits across different renewable energy technologies. Together, the information and views gathered across this work will inform a refresh of our onshore and offshore Good Practice Principles in the latter part of 2025.

1.1 Background

The Scottish Government’s vision is for Scotland to become a global leader in renewable energy, with investment in clean energy sectors forecast to reach £40 billion over the next decade^[4]. This transition is one of Scotland’s greatest economic opportunities, ensuring benefits to Scotland’s communities, workers and businesses are maximised and fit for a net zero future.

Scotland’s path to a net zero energy future must be one that not only addresses climate change but also prioritises the well-being of people and enhances the fabric of our communities. A just transition offers new opportunities, creates good jobs, reduces fuel poverty and improves the lives of people right across the country, ensuring no one is left behind on the journey.

This shift is expected to drive a significant increase in electricity consumption across sectors like heat, transport, and industry. Scenarios underpinning analysis commissioned by the Scottish Government suggest that electricity consumption could increase by up to 45% by 2030 compared to 2020 levels^[5]. At the same time, the demand for fossil fuels will decrease substantially. To support this transition, Scotland will need to expand its capacity for energy generation.

Rural and island communities are often, although not always, those in proximity to offshore and onshore renewable energy developments. Whilst each community is unique, on average they generally experience higher living costs and more limited access to services than those in urban areas, depending on their geography, demographics and other factors. Community benefits have the potential to deliver meaningful and long-term benefits for these communities.

1.2 The UK landscape

The generation, distribution, transmission and supply of electricity are reserved matters and as such outwith the legislative competence of the Scottish Parliament, which does not have the power to legislate on community benefits so far as related to those reserved matters.

To achieve the best outcomes for communities, the Scottish Government’s guidance will continue to be developed with reference to the UK context, ensuring they complement each other.

The Welsh Government have published guidance on local and shared ownership of energy projects^[6]. The onshore wind sector maintains its own voluntary industry protocol for onshore wind in England that the UK Government has committed to take ownership of and update in due course^[7]. The UK Government currently has no guidance on the provision of community benefits from or shared ownership of offshore wind developments. It encourages developers to invest in projects that will benefit local communities in the regions in which they operate, for example through community benefit funds^[8].

In 2023, the UK Government also committed to produce new GB-wide guidance on Community Benefits for Electricity Transmission Network Infrastructure^[9], following a public consultation and associated research^[10]. In these proposals, the UK Government committed to explore mandating community benefits from transmission projects, including local energy bill discounts for host communities. Following the change in UK Government, it has committed to developing guidance on community benefits for electricity transmission network infrastructure, which it will publish in due course.

Recent UK Government announcements on establishing GB Energy and a National Wealth Fund create additional opportunities for community energy schemes, however, policy development remains at an early stage.

The UK Government’s new Clean Industry Bonus (CIB)^[11] will apply to offshore wind projects bidding into the Contracts for Difference scheme from Allocation Round 7. The CIB will provide extra revenue support, with a budget set at £27 million per gigawatt, to developers who choose to invest in cleaner supply chains anywhere in the world and those in the UK’s most deprived areas. This has the potential to drive further investment in Scotland’s communities.

The Scottish Government will also continue to work closely with the UK Government to ensure Scotland’s interests are fully considered in delivering the Clean Power 2030 Action Plan^[12]. Achieving Clean Power by 2030, and any electricity system reforms, must respect devolved powers, ambitions and policies, and secure investor and industry confidence. With the ambitious scale of action required, it is crucial that communities and consumers are involved at every stage of the process.

We welcome ongoing work by the UK Government to review its approach to community benefit. We look forward to seeing more detail. We will take account of the UK Government’s approach in our assessment of options following this consultation.

1.3 Key terms

Community benefits are additional benefits, that are currently voluntary, which developers provide to the community. The Scottish Government does not currently have the power to legislate for community benefits, which lies with the UK Government. A community benefit fund is considered to be a fundamental component of a community benefit package, though other measures may be considered such as in-kind works, direct funding of projects, or any other voluntary site-specific benefits. Community benefits are not compensation for impacts on communities or other interests, including commercial interests, arising from renewable installations and they are not taken into account in a decision over whether a consent for a development is granted.

Offshore wind refers to the generation of energy from floating and fixed bottom wind farms in a body of water, normally in the sea.

Offshore renewable energy refers to all renewable technologies that operate in the marine environment, including wind, wave, and tidal.

Onshore renewable energy refers to all renewable technologies that operate on land in Scotland, including wind, solar and hydro.

Onshore net zero energy refers to all onshore renewable and low carbon energy technologies that will comprise Scotland’s energy system as set out in the Scottish Government’s draft Energy Strategy and Just Transition Plan. This includes wind, solar, hydro, pumped hydro storage, battery storage, hydrogen, carbon capture, utilisation and storage (CCUS) and other negative emission technologies (NETs), and transmission infrastructure.

Shared ownership provides community groups the opportunity to make an investment in a commercially owned renewable energy project, defined as any structure which involves a community group as a financial partner benefitting over the lifetime of a renewable energy project. Shared ownership is distinct from community benefits.

Socio-economic benefits are the wider social and economic benefits delivered by renewable energy developments, such as employment opportunities, supply chain growth and infrastructure development. These are distinct from, but complementary to, ‘community benefits’.