Onshore renewable energy developments - good practice principles for community benefits: consultation

1 Executive Summary

Community benefits schemes are a well-established, integral part of renewable energy developments, and represent a positive relationship between renewable energy businesses and communities.

They are voluntary arrangements offered by renewable energy businesses to communities located near developments, and are not a material consideration in a planning application.

In 2014, the Scottish Government, in consultation with the renewables industry and communities, published the Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments. Our aim was to promote transparency in the process by providing a practical guide for stakeholders to use.

The Good Practice Principles have been widely adopted across the renewables industry, providing a benchmark for the sector. It has become an invaluable tool for those communities with little or no experience of engaging with renewable energy businesses developing projects. The Welsh and UK governments have also adopted a similar process for their use.

The UK Government’s response to its recent Contract for Difference consultation also refers explicitly to our Good Practice Principles:

Decisions on the details regarding how projects can deliver local benefits are best taken locally, but the (UK) government expects renewable energy businesses, and operators of remote island wind projects should seek to provide community benefits consistent with Scottish Government or other relevant guidance and Good Practice Principles. This includes providing an opportunity for communities or local people to invest in the project, with any offer additional to a community benefit fund. Community benefits are expected to last for the lifetime of a wind farm and it is our expectation that the operator, or subsequent owner if the project is sold on, will honour agreements with the local community.

The (UK) government also expects renewable energy businesses to register community benefits package on the relevant community benefit register (which for projects on the remote Scottish islands is on the Scottish government’s Register of community Benefits), so that delivery can be monitored.

This example highlights wider recognition of the value associated with our approach and principles. We will monitor progress to ensure that the application of the above is consistent with the UK Government’s intent.

Our Good Practice Principles as published included a commitment to review and update the document on a regular basis, to ensure that it remains relevant. We signalled our intention in the Scottish Energy Strategy and supporting Onshore Wind Policy Statement (published in December 2017) to undertake a review during 2018 highlighting the changes that have been introduced to the UK renewable energy support schemes, and their effect on the decision to investment in certain renewable projects.

The starting position for the review was that much of the document remains relevant and valid. This means that we see no need for wholesale change; however, the review provides a good opportunity to enhance and amend some aspects to reflect lessons learned, and align with current and future investment conditions.

We commend the renewables industry for working with Scottish Government and local communities in seeking to build a positive experience in relation to renewable energy developments. Community benefits from projects developed to date are making a real – and in some cases, transformational – difference at a local level. This is demonstrated by the diverse range of projects supported and the value of community benefit payments received by communities in the last 12 months:

Community Benefit Headline Facts and Figures

• 214 projects offering community benefits packages
• £15,719,720 total community benefits paid last 12 months

Example of projects supported:

• Community car club
• Community kitchen class room
• Community cycle club
• Befriending programme
• Refurbishment of community hall
• Start -up grant for small businesses
• Bursaries for further education

Source: Scottish Government Community Benefit Register

The Good Practice Principles are a great example of Scotland leading the way, and ensuring that communities are front and centre in the development of renewable energy projects.

We accept that the renewables industry is in a period of transition at the moment, following changes to the UK renewable support schemes, and that investment decisions are being taken in a more challenging context than has been the case in the past. This means that new models of community benefit, and new approaches, are likely to be needed.

It’s in everyone’s interest to work towards ensuring renewable energy continues to play an important role in Scotland’s transition to a low carbon future. We believe that securing lasting benefit for communities adjacent to renewable developments must remain the core principle at the heart of the Good Practice Principles.

We will continue at a national level to promote community benefit of the value equivalent to £5,000 per MW. However, we recognise that some renewable energy businesses will seek to offer communities a more flexible package of benefits.

That package might not necessarily be based on a rate per MW. It may, for example, include a different rate or include scope for direct funding of projects identified by the community.

This flexibility is not an entirely new development. The Good Practice Principles already recognise that community benefit packages are not limited to annual monetary payments in a fund, and that alternative arrangements can also address longer term community needs by generating positive social and economic impacts which provide a lasting legacy.

We want to promote a more flexible and evidence based approach to discussions about community benefit in future – a process which allows both renewable energy businesses and communities to identify clearly the best and most meaningful community benefit options and packages.

Key to future discussions will be a community possessing a community action plan: detailing its investment aspirations and associated outcomes. This will be critical for communities in their discussions with renewable energy businesses, irrespective of the community benefit package being offered and will deliver our goal of a lasting legacy in line with a community’s aspirations and ambitions, as captured in a community action plan.

This document has been enhanced to include guidance on developing a community action plan. We encourage communities and renewable energy businesses to consider all community benefit options openly and fully, including whether a “fund” is the most appropriate or suitable mechanism.

In summary we expect to see a change in emphasis from the way community benefits packages were offered in the past – purely monetary payments- towards a more holistic approach of supporting a community’s needs and aspirations. However community benefits will still remain an integral part of renewable energy developments.

The success of these Good Practice Principles has been built on a fair process for all sides, with trust and transparency at its core. This needs to continue for the next generation of renewable energy generation projects to flourish.

We intend to continue to review the Good Practice Principles on a regular basis, and to capture and share emerging practices for the benefit of renewable energy businesses and communities.

This Review Process was overseen by an independent Steering Group, which included representatives from community groups, the renewables industry and public bodies, and chaired by the Scottish Government. Full membership is attached as an annex.

This document supersedes the 2015 version. Although, there will be a number of renewable energy projects, not yet operational, that will have already agreed a community benefits package or, are well advanced in their discussions. We do not expect these arrangements to change as a result of the revised guidance.

Section Summaries

A brief overview of the document’s sections is provided below:

2: Overview : Key Principles of Community Benefits

• Provides a high level overview of community benefits
• Summarises key principles
• Discusses expected value of community benefit
• Outlines key steps
• Help to Identify the ‘area of benefit’
• Explains the right to express view on the development
• Roles and Responsibilities

3: Community: Identification and Consultation

• Principles of consultation
• Approach to consulting
• Consulting on details of community benefit fund
• Identifying stakeholders
• Widening area of benefits, including Regional Funds
• Community Benefit Agreement

4: Supporting local legacy

• Developing a community action plan
• Milestones and timeline
• Creating lasting legacy
• Adjusting to changing priorities

5: Getting the Governance right

• Good Governance Principles
• Governance Structure options
• Effective Fund administration
• Wider Package of Benefits

6: Ongoing roles for the renewable energy business and the community

• Point of contact
• Reporting
• Review

7: Support Available

• Provides details of the support available under Scottish Government’s Community and Renewable Energy Scheme.