Shared Ownership of Onshore Renewable Energy Developments

The Planning System

This section sets out:

• National context
• Decision making process
• Implications for communities, renewables industry and planning authorities

National Planning Policy

National planning policy does not require developments to demonstrate economic benefit. However, it may be helpful to demonstrate net economic benefit, where the proposal is contrary to the development plan or the decision is likely to be finely balanced. Projects which do not offer a shared ownership opportunity can still be important to economic growth, jobs, environment (climate change mitigation) and renewable energy ambitions.

Paragraph 169 of Scottish Planning Policy sets out some development management considerations for proposals for energy infrastructure developments. It notes that relevant factors will vary relative to the scale of the proposal and area characteristics but are likely to include, among other things:

Net economic impact, which includes local and community socio-economic benefits such as employment, associated business and supply chain opportunities. 

Scottish Planning Policy paragraph 29 lists net economic benefit as one of a number of guiding principles supporting development that contribute to sustainable development. 

Revisions to how planning is conducted in Scotland are outlined in the current planning bill being considered by the Scottish Parliament. Once the Parliament’s process has finished the Scottish Government will review the National Planning Framework and Scottish Planning Policy. This guidance may be revised to take account of any amendments that are deemed relevant.

Decision Making

This section seeks to provide clarity on what a planning authority can legitimately take into account as a material consideration when determining planning applications.  

Each planning authority has an adopted development plan for the area which is available from the authority’s website.

Renewable energy projects are assessed on their merits against development plan policies and relevant ‘material considerations’ which may include environmental, economic and social effects of each project. 

More guidance on material considerations is available from the Scottish Government’s website: https://www.gov.scot/publications/planning-series-circular-3-2013-development-management-procedures/ 

For something to be taking into account as a material consideration it must have a planning purpose. This means that is must relate to the development or use of the land and it must fairly and reasonably relate to the development proposed by the particular application under consideration.

The financial benefits arising to owners from ownership of any development is not a material consideration in determining the acceptability of the development in planning terms. While financial considerations can be relevant to a planning decision something which is funded from the development or otherwise offered by the renewable energy business will not, by virtue only of that fact, be sufficiently connected to the proposed development to be a material consideration.

Commonly a planning decision is a question of balance, fulfilling the vision and policies of the development plan and accounting for relevant material considerations. No one aspect is given greater weight than another in national planning policy, it is the decision maker who decides what the most important considerations are. Locally, particularly important factors for areas may be identified in the development plan and would be expected to be dealt with in planning applications.

Renewable energy businesses must not request community support for (or indeed no objection to) the application as a condition of offering shared ownership.

A development should be essentially capable of achieving planning permission without the benefits accruing from a shared ownership offer. A poorly designed scheme in an unsuitable location, where the impacts cannot be appropriately resolved, cannot be made acceptable by matters which are not material to the consideration of the application.

A planning authority could not guarantee that a shared ownership option will ultimately be established as this is an arrangement between a renewable energy business and a community. Similarly, the planning process should not be used as an opportunity to seek to compel communities to take-up a shared ownership offer when in the end it is not right for their community and aspirations. 

What does this mean for communities? 

There a number of points that communities may wish to consider: 

• Renewable energy businesses are likely to approach communities to discuss shared ownership opportunities, in line with the Scottish Government’s ambition to see host communities empowered to shape their individual and collective future, and in doing so capture economic and social benefits from developments. 
• A legally binding shared ownership contract is not a requirement of the planning system. Communities should not enter into legally binding contracts for particular ownership options until, or unless they are satisfied with the offer. Communities may want to enter into a less formal, but nonetheless agreed and written, understanding about the kind of shared ownership offer they would agree to, allow a renewable energy business to provide this information to the planning authority, if thought necessary.
• Communities should not sign documents (or make other commitments) which would prevent them from commenting on a planning application either in support or objection. 
• Communities should not sign documents (or make other commitments) which require them to support a planning application.
• The presence of a shared ownership option or not, does not prevent factors associated with a development from being appropriately resolved. Communities should not see shared ownership as a ‘payoff’ by a renewable energy business to get around other standards or policies in a development plan.
• Where multiple communities are involved in discussions all should be open to the idea of creating a Special Purpose Vehicle (SPV) to take forward discussions.
• Communities should consider any adopted or proposed local development plans in the preparation of a community action plan or regeneration strategy.  

What does this mean for renewables industry? 

• A renewable energy business can legitimately approach communities to discuss shared ownership options. 
• A net economic impact assessment is not required in all cases.
• A legally binding shared ownership contract is not a requirement of the planning system. 
• A renewable energy business should not make shared ownership conditional on support for (or no objection to) a planning application.

What does this mean for planning authorities? 

• It is not the role of planning authorities to ‘approve’ a shared ownership offer as good or correct. However, at the pre-application stage, planning authorities may be able to direct a renewable energy business towards sources of information about community priorities set out in the development plan, or an existing community action plan for example.
• A planning authority should not require a renewable energy business to enter into shared ownership through a condition of planning permission, or legal agreement associated with the planning permission.
• If the development is to receive planning permission, it should be acceptable in planning terms and without taking into consideration the shared ownership element.