Community benefits from onshore renewable energy developments

Executive Summary

Community benefits schemes are a well-established, integral part of renewable energy developments, and often 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 Contracts 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 benefits 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 benefits 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 invest 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 benefits payments received by communities in the last 12 months:

Community Benefits 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 across the UK in our approach to how we wish to see renewable energy projects being developed in Scotland: One that puts communities’ front and centre.

We accept that the renewables industry is in a period of transition at the moment, following changes to UK Government support schemes. This means that new models of community benefits, 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 benefits of the value equivalent to £5,000 per installed megawatt per annum, index linked for the operational lifetime of the project. 

We recognise that some renewable energy businesses will seek to offer communities a more flexible package of benefits, and that package might not necessarily be based on our recommended national rate of £5,000 per installed MW per year. It may, for example, include a different rate or include scope for the direct funding of projects identified by the community. This flexibility is not an entirely new development.

We are aware that the commercial profiles of renewable energy businesses will vary with technology type. However, the Good Practice Principles already recognise that community benefits 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 would therefore encourage all renewable energy businesses, regardless of technology type, to consider what options or community benefits packages they may be able to offer, in line with their particular business model. More flexible packages of benefit should offer an element of additionality and go beyond the requirements of the planning process. Further details are available at Section 5.

We want to promote a more flexible approach to discussions about community benefits in future – a process which allows both renewable energy businesses and communities to identify clearly the best and most meaningful community benefits 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 benefits 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 benefits options openly and fully, including whether a “fund” is the most appropriate or suitable mechanism to suit their specific circumstances.

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.

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 a 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 packages to change as a result of the revised guidance. Non-renewable technologies may wish to adopt these Good Practice Principles and offer Community Benefits in relation to their developments, the Scottish Government welcomes this. 

Section Summaries

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

Overview: Key Principles of Community Benefits

• Provides a high level overview of community benefits
• Summarises key principles
• Discusses expanded value of community benefits
• Outlines key steps
• Helps to Identify the ‘area of benefit’
• Explains the right to express views on the development
• Roles and responsibilities

Community: Identification and Consultation

• Principles of consultation
• Approach to consulting
• Consulting on details of Community Benefits fund
• Identifying stakeholders
• Widening area of benefits, including regional funds
• Community Benefits Agreement

Supporting local legacy

• Developing a Community Action Plan
• Milestones and timeline
• Creating lasting legacy
• Adjusting to changing priorities

Getting the Governance right

• Good Governance – Principles
• Governance Structure – Options
• Effective fund administration
• Wider package of benefits

Ongoing roles for the renewable energy business and the community

• Point of contact
• Reporting
• Review

Support Available

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