The Belgian government have just agreed to encourage citizens’ co-operatives to have a stake in major offshore windfarm projects. In Scotland, communities are already losing out.
Having lots of sea and lots of wind, Scotland has massive plans for the development of offshore wind power. The ScotWind process awarded leases for 25GW (gigawatts) of new windfarms. That’s enough to meet Scotland’s peak electricity demand five times over. Successful applicants included BP, Shell, SSE and Scottish Power.
There are already 2GW of offshore wind in operation and another 8GW in various stages of development. The Scottish Government’s target for 2030 was 8-11GW but the falling price of development and the enthusiasm of the energy companies means this will need to be very significantly increased.
For onshore windfarms large developers started to give donations every year to local communities, and the rule of thumb is that they should contribute £5,000 for each megawatt of installed generating capacity. After all, it is our wind, so communities should share in the profits. Last year communities in Scotland received £25m from renewable energy projects, the vast majority from onshore windfarms.
Even better than a simple annual payment is shared ownership, when the community actually owns some of the development, for instance two turbines in a larger development. In that case the community receives even more money. Best of all are community-owned schemes, where the community raises the money to create a windfarm and gets to keep all of the net income.
For offshore wind power the sums involved in simple community benefit funds could be five times larger for onshore wind. The Scottish Government produced a good practice guide for community benefits from offshore wind in 2018 and this is being revised at the moment. They say they will also explore how there could be some aspect of shared ownership with communities for offshore wind.
The 2018 guidance suggest how developers should go about identifying the appropriate community but stops short of suggesting a similar rule of thumb to that for onshore wind. And in both cases the guidance is just that, guidance, there is no obligation for developers to actually give back to the community.
Scotland’s first major offshore windfarm, the Beatrice development in the Outer Moray Firth, paid out community benefits of £6m over five years through three different schemes, starting well before construction even began. No doubt well received by the community but nothing like as generous as for an inshore development. If the same guidance applied as for onshore wind this would have been more like £3m a year and it would keep going for the lifetime of the windfarm.
Scotland’s largest offshore windfarm, Moray East, came online last year. No community funding is being provided.
In Belgium SeaCoop has been created as a co-operative of co-operatives, aiming to help citizens invest nearly half a billion Euros in wind farms and to own 20% of all those developments.
Some very large companies are going to be building offshore windfarms but without a firm grip on the process from the Scottish Government nearby communities are likely to miss out on potentially large amounts of funding and be denied the opportunity to part own these development.
A version of this article appeared in the Scotsman newspaper on 4th May 2023