Why we need a law to ensure community benefits from Scotland's windfarm boom - Brian Wilson

The term “community benefit” from renewable energy projects tends to equate in public perception to strips for the local football team and an upgrade for the village hall, accompanied by generous doses of local PR for the munificent developer.

It is now matter of urgency to wipe that slate clean and start again. As the transition to renewables, mainly onshore and offshore windfarms, intensifies so too must the level of expectation about what local communities and Scottish society as a whole are going to get out of it.

This is a multi-billion pound industry and an extremely profitable one. It has gone far beyond its pioneering stage and a critical part of the contract between developers and Scottish society must be requirements, underpinned by law, to recognise the public interest in exploiting a natural resource, owned by no man.

It is a cause given impetus by an agreement in Lewis this week between Canadian developers of an offshore wind farm and landowners which. If and when the project starts generating, it will be worth £4.5 million a year to the locality. The deal was made possible by the fact that – very unusually in Scotland – most land on the west side of Lewis is community-owned.

It is the first stage in a range of benefits which will accrue as the project develops. Like all such developments, it has opponents and this agreement will not change that. However, the fact community bodies could be pro-active in negotiating potential benefits demonstrated the importance of controlling the land.

It also brought to the fore that “community benefit” is entirely a matter for local negotiation which looks increasingly absurd given the scale of the industry. Why should there be scores of David versus Goliath engagements across the country, with wildly variable outcomes, when legal requirements built into consenting projects could underpin negotiations with rights?

The ScotWind leases for vast offshore projects were concluded without any recognition of the subject. Yet billions will flow into the coffers of energy companies as a result of these leases over the next 40 years. They could comfortably sustain a modest levy which would create a Community Wealth Fund providing substantial returns to the whole of Scotland for decades to come.

I have borrowed this term from a report by Community Energy Scotland which believes such a Fund should “support the delivery of a just transition to Net Zero for all communities across Scotland, not just those located nearest to developments”. Or perhaps it could provide payments to those in fuel poverty, in a much more targeted way than Winter Fuel Payments?

To extrapolate the scale of what is possible, it is often helpful to look at small scale models. As it happens, Lewis has become the epicentre of community-owned windfarms in the UK – tiny in proportion but substantial in benefits. The largest is operated by Point and Sandwick Trust, on land leased from the community owned Stornoway Trust.

Its development director is the former Labour MP, Calum Macdonald, who points out that their nine-megawatt windfarm provides £900,000 a year in community benefit – the same as the average paid out under that heading by the largest onshore windfarm in the UK, Scottish Power’s Whitelee, which is almost 60 times more powerful (and profitable) at 539 megawatts.

Calum says: “There is a huge gap that won’t be filled by moral exhortation”. These days, the norm for onshore developments is £5000 a megawatt for community benefit which many see as far too low – but not low enough for some who can get away with it. He is aware of one project where a major Scottish energy company secured a “deal” worth just £1000 per megawatt.

The Scottish Government would not have to look far for an alternative model. In Denmark, local communities are entitled by law, from the outset of a project, to take a 20 per cent stake. That long-established norm hasn’t exactly chased investment away, as would undoubtedly be pleaded here. On the contrary, assured involvement and benefit help to smooth the path to consents for mutual advantage.

Calum points to the fact that there are 2.2 gigawatt of power being generated from land owned by the Scottish Government-controlled Forestry Commission but not one swish of a blade is publicly owned. When he was a member of the Commission, he advocated that they should act as developers but this was rejected by the Scottish Government who preferred to auction leases in a way that favoured big energy companies.

This is one of many issues that will recur. In early days of renewables, the priority was to incentivise investment in what were still developing technologies. This was done very successfully through the Renewables Obligation and paid for at modest cost by consumers. That was an enlightened policy 25 years ago but the conditions, in both scale and technologies, have changed beyond recognition without government keeping pace.

Soon, these early developments will start coming up for re-powering with bigger turbines and increased profitability. The leases on public land will need renewed. The offshore wind boom will be underway with massive requirements for investment in public infrastructure.

Will anything have changed in terms of the market conditions under which the industry is free to operate? Has anyone in the Scottish Government even been to Denmark to look at an alternative model? As Calum Macdonald says: “The perception that community benefit can only be done small is misguided and has to change”.

These are also questions for the UK as a whole but if ever there was a case of Scotland being in a position to lead, this is it. One looks in vain for anything happening within the Scottish Government which either understands the scale of the opportunity or the price of failing to seize it.