Renewables: Why Scotland should set up new national wealth fund and what it can do with the money

A report has called for a new national wealth fund to be set up for Scotland

Scotland should set up a new national wealth fund and set a target to ramp up community ownership of wind, solar, tidal and hydro power plants as an urgent priority, campaigners have urged.

The move, which it is argued would more fairly share the boom in renewable energy, could generate hundreds of millions of pounds for the Scottish economy and ensure bigger benefits for local people with schemes on their doorsteps.

The call comes from five Scottish community development groups, which have united to press for reform of the green energy industry to ensure the “huge wealth” being generated by the country’s natural resources is more equally distributed.

In a new report, the organisations highlight the risk of corporates and multinationals dominating the vastly expanding renewable energy sector, while local communities lose a “transformational” opportunity.

The report estimates around £170 million could be raised each year and invested in a new National Community Wealth Fund through community benefits earned from onshore, offshore and transmission developments.

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The money would be shared out across Scotland, not just among communities located nearest to the schemes, to support delivery of a just transition to net zero.

Community development groups are calling for the Scottish government to set up a new national wealth fund and set a target to ramp up community ownership of wind, solar and hydro power plants as an urgent priority to more fairly share the boom in renewable energy and generate millions of pounds for Scots across the country. Picture: Getty Images

Entitled A Fair Energy Deal for Scottish Communities, the report criticises the low level – and stagnation – of community-owned renewables projects in Scotland, with only one such wind farm becoming operational in 2023.

It shows how accelerated government support could bring Scotland into line with other European countries where local people get much greater benefits from the massive growth in renewables. The report sets out a number of steps to achieve the goal, including for Holyrood to set a new target of one gigawatt of renewable energy production to be community-owned within six years.

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The groups also argue that community benefit models are out of date, calling for payments to be linked to the consumer price index rather than being frozen at the same rate for the past ten years. Pay-outs of £5,000 per installed megawatt of capacity are recommended – not compulsory – for private sector operators. The recommended moves could be “transformational”, the groups insist.

Dr Josh Doble, policy manager for Community Land Scotland

“While our call to action represents an ambitious and major scaling up of the sector in Scotland, it is entirely deliverable" said Dr Josh Doble, policy manager for Community Land Scotland. “Denmark and other European nations have demonstrated that community-owned wind power can and should be done at much larger scale than the Scottish or UK status quo.

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“Local communities in Scotland have long experience of delivering successful renewable projects with a high level of expertise, which generates a significant amount of sustainable development opportunities. However, these developments have slowed in recent years and the community energy sector is at risk of stagnation.

“Unless urgent action is taken, that opportunity could be missed.”

Kristopher Leask, policy manager for Community Energy Scotland

Community Energy Scotland policy manager Kristopher Leask said there was a “very strong feeling” that communities should benefit properly from renewables being developed around them, using natural resources like the wind, sun and sea.

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“The benefits to society and economy of having community-owned power businesses are clear,” he said. “That is why most European countries transitioning to green energy have developed their domestically owned and democratically owned green energy base.

“This has been achieved not just through large public sector companies, but through community companies and co-operatives.”