Meeting of the Parliament

Meeting date: Thursday, June 7, 2018

Official Report 1274KB pdf

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Onshore Wind Energy (Community Benefit)

The next item of business is a members’ business debate on motion S5M-12167, in the name of Richard Lochhead, on ensuring appropriate community benefit from onshore wind farm developments. The debate will be concluded without any question being put.

Motion debated,

That the Parliament welcomes the reported growth in renewable energy production in Moray and throughout Scotland; recognises what it sees as the importance of renewable energy for a low-carbon future; considers that renewable energy presents a unique opportunity to use local renewable resources to create regeneration, empowerment and financial benefits for communities; understands that, according to Local Energy Scotland, over £15 million in community benefit has been paid in 2018, up to 9 May, averaging over £5,675 per MW for recent projects; considers that these financial resources empower communities; notes that, although community benefit can be delivered in various forms, the national standard for community benefit from onshore wind farm developments is £5,000 per MW; recognises that some companies deliver or exceed this but many others do not, resulting in a very inconsistent picture across Scotland, and notes the reported concerns of communities at these inconsistencies and issues, such as the need for written agreements and management of funds, including retrospectively, to recognise that the exploitation of natural resources to produce renewable energy must adequately benefit and empower communities.

12:50  

I thank colleagues for signing the motion and staying behind for the debate.

Scotland’s transformation into a renewables powerhouse has been one of this Government’s and this Parliament’s biggest success stories. It was tremendous news when ministers recently announced that 2017 had been a record year for renewable electricity and that 68.1 per cent of gross electricity consumption had been met by renewables.

As the most commercially viable technology, onshore wind has led the way and now employs 8,000 people in Scotland. As a result, many communities have found themselves being neighbours to wind farms, which are sometimes controversial but are often widely supported. Community benefit funds have been set up to achieve community buy-in and to provide a share of the benefits from such developments.

Our natural resources belong to us all and, when they are exploited, we should all benefit, particularly communities that are adjacent to developments. We will all be familiar with groups that have benefited over the years from grants that have made a difference by supporting rural development and good causes. Such funds have allowed communities to invest in local projects that benefit everyone. I was pleased last week to hear from Keith & Dufftown Railway Association in my constituency, which has benefited from local wind farm funds, too.

Following the industry’s protocols, the “Scottish Government Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments” was published in 2014, and that policy is now being reviewed. Ministers were quite right to state that

“no one size fits all when it comes to community benefits”

and to promote a national rate for benefits from onshore renewables. That was needed because the success of communities in negotiating community benefits was variable in Scotland, to say the least. Some communities negotiated significant amounts, but others did not. Whether a decent level is secured often depends on a local community’s capacity or the presence of strong personalities and community leaders, which is why a national standard was established, along with a voluntary register that is managed by local energy Scotland to help equip communities with the appropriate knowledge to strengthen their arms in negotiations.

Many developers take their obligations to communities seriously, but communities always need to drive a hard bargain. Some developers have managed to get off scot-free or to avoid paying the recommended level of at least £5,000 per megawatt. The landowner might strike gold and the operator might generate significant profits, but the local community can be left with the crumbs off the table or nothing at all. Energy is a multibillion-pound business and all that our communities are asking for is their fair share.

That is why it is a great shame that, to give just one example, the massive French company EDF Energy has found itself in dispute with representatives of communities in my constituency that are affected by the Dorenell wind farm.

The Moray community associations covering Dufftown, Glenlivet and Inveravon, Glenrinnes and the Cabrach have come together as a group—the united communities impacted by the Dorenell wind farm—to seek the recommended £5,000 per megawatt. EDF told me that it does not believe that it has to deliver the national standard, as the previous owner of the development agreed a lesser amount, which it claims that the community accepted at that time.

However, the local community disputes that, and there is no written agreement in place that anyone can find. EDF is paying £2,000 per megawatt to a fund and argues that when non-monetary benefits are added to that, it rises to £4,000 per megawatt. EDF originally claimed in an email to me in December that the benefits amounted to nearly £5,000, but it is now saying that it is £4,000.

However, the community argues that some of the non-monetary benefits that are part of that calculation were linked to planning conditions; and it is worth noting that they include the refurbishment of properties owned by the landowner, London-based Christopher Moran, who—I might add—has often been criticised for not investing in those properties at his own expense to help attract people to live and work in the Cabrach. So, it is a win-win for the landowner because he gets rent from EDF for the land that he is told happens to be in a windy area and, according to the Scottish Parliament information centre, the annual accounts for Glenfiddich Wind Ltd showed annual profits amounting to nearly £43 million between 2015 and 2017 alone, and Christopher Moran Energy Ltd, which I think is a subsidiary, shows a handsome profit, too. The landowner probably cannot believe his luck in getting his properties refurbished at someone else’s expense, which is then classed as a community benefit.

It has to be said that onshore energy is a licence to print money for many landowners in Scotland. In today’s world, money makes money, but local communities deserve to have their share guaranteed as well. There are clearly many variables at play in estimating EDF’s income from Dorenell over a timeframe as long as the next 25 years, but I have seen estimates of anywhere between £1 billion and £1.5 billion. We do not know what the figure will be but, whatever it is, it is safe to say that EDF and the landowner will make significant profits. Can anyone wonder why the local community feels that it is getting a poor deal? Can anyone wonder why, to quote ministers’ aspirations, in some parts of Scotland the

“creation and strengthening of mutual trust and relationships”

that

“should be regarded as integral to the overall process”

is severely lacking?

I am not saying that private companies that carry the risk, invest millions and make projects happen should not make a good profit; I am not saying that all benefits need to be monetary; and I am not saying that the wider benefits for the Scottish supply chain are not very important. EDF tells me that it has spent £40 million in the Scottish supply chain, which is of course extremely welcome for the Scottish economy. However, we need more consistency across Scotland in terms of community benefit, which should be on a statutory footing, transparent and retrospective for projects that received Government subsidies, and communities deserve a greater share of the benefits.

My key ask is that ministers work with the sector to ensure that all developers deliver the national recommended standard. The Scottish Government has made great progress in promoting community benefit. Local energy Scotland’s website says that communities have benefited from nearly £15 million in the past year. However, there is still some way to go, because the same website says that the average payment is £3,454, excluding community projects, and I understand that 50 projects—that is about 26 per cent—are not paying any community benefit or the available data on them is incomplete.

It is a better story for community-owned projects and I am delighted that there are now 40 such projects in Scotland. I have long supported a nationally owned energy company to have joint ventures with private companies and to work with communities as well.

Until we sort this situation out and have the national standard adhered to and full transparency, Scotland’s communities will continue to lose out on millions of pounds a year that could be put to good use in these difficult times. That is especially the case for rural communities that, ironically, pay more for their electricity and suffer higher rates of fuel poverty. I urge the minister to intervene to deliver the national standards and to seek the necessary powers from the United Kingdom Government and ministers to regulate community benefit and ensure the transparency that is required and that our communities enjoy a fair share of revenues from the renewables revolution.

12:59  

I thank Richard Lochhead for bringing this topic to a members’ business debate and I note my entry in the register of interests around the renewable energy sector.

As the motion notes, it is great to see that renewable energy production is up and that communities across Scotland are benefiting from it. As members will know, the Scottish Conservatives support onshore wind where it is appropriate and when local communities support and want it. We therefore believe that it was correct that the onshore wind subsidy existed to kick-start projects across Scotland, but we feel that it is appropriate to remove that subsidy now that projects can be funded on their own. Onshore wind farming can bring real opportunities for local communities, with new playing fields, village halls and more. The communities that benefit exist in all our constituencies, including my own.

My wife sits on our local primary school’s parent teacher association board, which is currently submitting an application to get funding for a trim trail. I am not sure whether that counts as a registrable interest, but it should certainly count as a plug for the PTA’s application.

Mid Hill Wind Ltd, which is based in Fetteresso Forest, set up a community benefit fund as part of its continuing commitments to communities in the vicinity of its wind farm. The purpose of the fund is to enable communities to carry out improvements to their local area in any sphere, including the environment, local amenity or tourism. Each year, it gives approximately £5,750 to the Crathes, Drumoak and Durris community council, which in turn administers its disbursement to the community.

Another example in the constituency of a wind farm successfully supporting the community is the Huntly and District Development Trust. Set up in 2009, it is a community-owned company and can make £65,000 a year from its wind turbines. The income goes towards social projects, which vary from running car clubs to tackling mental health issues and building new footpaths.

Although those are not large companies, lessons can be learned from organisations such as the Huntly and District Development Trust. It is important that, if a community chooses to, it can share in the benefits of the onshore wind industry and be empowered by having the choice of investing in what matters most to it, whether that is a new sports field, a community hall or a trim trail.

Does Alexander Burnett agree that it would be better if communities had a stake in the ownership of such projects so that, rather than getting the crumbs from the table, they got a bigger bit of the cake?

That was the point that I just made about the Huntly and District Development Trust, which has a considerably larger stake in its project and makes £65,000 a year. That kind of model is certainly possible and, I am sure, desirable for many communities.

We continue to believe that the Scottish Government should not overturn wind farm decisions, especially if communities are against a development being in their area. However, we encourage the Scottish Government to ensure that consistent levels of community benefit are paid out across Scotland. As Richard Lochhead notes in his motion, some companies are delivering £5,000 per megawatt to the local area, but the picture is inconsistent, with some delivering well above or well below that average. Therefore, the Scottish Government should carry out a study with a view to introducing minimum funding per megawatt for community benefit to create some consistency in the framework, although that should be caveated with the consideration of community impact. A low-carbon future is important to us all, but we must ensure that communities benefit fairly, too.

13:02  

I congratulate my colleague Richard Lochhead on securing the debate on a topic that impacts on a sizeable number of communities throughout Scotland. As the motion rightly highlights, because of our energy needs and owing to climate change, we need to embrace renewables. As we have heard, Scotland has a good track record in that regard. Developments must, of course, be in the right places and local communities should, in turn, benefit financially from them. Therefore, I note with concern the situation at Dorenell that Richard Lochhead highlighted and suggestions that community benefit over the 25-year lifespan of the project could amount to £11 million rather than £27.5 million.

It might surprise members to learn that there is only one wind farm in my constituency. It is at Ark Hill and is operated by Green Cat Renewables. The Glamis and Area Community Trust exists to distribute the funds from the Ark Hill wind farm windfall revenue scheme, which was set up voluntarily by Green Cat, as the Ark Hill site was granted planning consent before the time when it became the norm for such benefit to be derived locally. Applications are invited from within the boundaries of the Glamis community council area, and the trust seeks to support projects that promote citizenship and community benefit; the arts, culture, heritage or science; the provision of recreational facilities; and environmental protection or improvement.

An annual contribution is made to the trust and a number of projects within the local area have been supported by that funding. They have included a grant to the Glen Ogilvie residents association for two defibrillators and to Charleston Village Hall for a wheelchair access ramp. The trust has also grant aided the Saddle Up! Ranch, which has a project to improve horse-riding facilities at Glamis for the disabled and recovering persons. Those projects are worthy of support.

We need to be mindful, however, that companies should not be too restrictive when they draw up the terms of their community benefit schemes. I do not say that in relation to Ark Hill.

The western part of my constituency runs along the border between the areas of Angus Council and Perth and Kinross Council. As I said, there is only one wind farm in my constituency, but Drumderg wind farm, which is only a couple of kilometres from the Angus boundary, is both seen and heard from properties in Glenisla and Kilry. Despite it being so close, however, no community benefit is provided to my constituents there. I am told that Alyth in Perth and Kinross has had significant benefits from Drumderg, yet people who live there can neither see nor hear it. That has rightly caused some consternation among my constituents in the locality and I contend that the matter requires attention.

Given that onshore wind farms are largely located in rural areas, the potential funding for local projects will become even more important due to the uncertainty surrounding the future of the LEADER scheme after Brexit. As I highlighted in a members’ business debate a few months ago, LEADER has been a lifeline for many projects in Angus South.

However, even if we set aside the concerns over what Brexit will mean, the LEADER funding that is available in Angus is fast running out, partly through Angus Council and its arm’s-length leisure and culture organisation Angus Alive having been awarded funding—wrongly, in my view. I accept that the rules allow for that, and the provision of, for example, mobile library services to those in rural areas is important, but should public bodies really be able to access such funding to the detriment of community groups and small local businesses? I believe that community groups and small businesses that seek to develop and help their local areas should be at the front of any funding queue. As LEADER cash runs out, with no certainty over future replacements, moneys that are derived from wind farms in the form of community benefit will become critical.

I thank Richard Lochhead again for highlighting the topic and bringing it to the chamber for debate. I endorse his motion and support his call for the national standard for community benefit to be placed on a statutory footing.

13:06  

I, too, thank Richard Lochhead for bringing the subject to the chamber and for his excellent speech, in which he summarised the issues that are at stake. I raised the issue in one of my first members’ business debates when I came to Parliament, so I am delighted that, seven years later, other people are catching up. I say that with tongue in cheek, of course.

I apologise to you, Presiding Officer, that I will have to leave after my speech in order to prepare for the policing statement.

I was interested to hear Graeme Dey say that he has one wind farm in his constituency. I have seven or eight, with well over 100 turbines within three or four miles of my house. Wind energy and the onshore sector is one of the biggest missed opportunities for decades. This natural resource that should be providing years of clean energy and finance for a host of communities has instead become a Klondike for speculators. Organisations submit planning applications and take their chance, often in the hope that the Government will call the applications in if they are rejected by local authorities. Many of those organisations are driven not by environmental concerns but by hard cash and would just as readily invest in coffee beans, widgets or whatever as long as they provided the same returns. I am not generalising about all of them, but that is true of a number of them.

In my area and across many parts of Scotland, the development of wind farms is dominated by multinational companies and venture capital firms that see Scotland’s wind as just the latest commodity, and they will do whatever it takes, including trampling over local communities’ concerns, to take advantage of the significant profits that are available to them. Those companies often set up a local company as a front for their project. They will call it “Fluffy Animals Renewables” or “Nice Green Forest Renewables”. They get their planning application and then the mask is suddenly whipped away and we see who is really behind the project.

For miles all round my home, I see turbines turning and another bunch of £10 notes fluttering off to Danish, Dutch, Austrian, French and Spanish bank accounts and boardrooms. Community benefit schemes exist, but the sums involved are a drop in the ocean compared with the cash that is being generated by the big companies that dominate the scene.

A robust community benefits strategy could result in significant cash, as well as the energy being generated, for communities and local services. Public bodies should own and develop onshore wind. Local authorities or the Forestry Commission could be doing it. Scottish Water and others could be doing it to generate money to go back into services, but that is not happening. We are seeing a few crumbs from the table going into communities in an attempt to buy them off.

Before entering Parliament, I led a group of negotiators from West Lothian Council that was negotiating a deal on behalf of a community development trust in my then council ward. That deal was with Scottish Power, which is now Iberdrola. We struck a decent, six-figure deal in circumstances in which we had very little guidance or information to draw on because we were in the very early days of community benefit. In the final round of negotiations, having taken them through about six stages, the owners withdrew the ownership option. We wanted ownership, not crumbs from the table; however, ownership was withdrawn at the last minute and the council was compensated with additional cash.

Ownership is key. Communities should have ownership so that they have a real stake in the assets and they can generate significant money, not crumbs. That money could be invested by community development trusts, for example, in local housing projects, local youth facilities, environmental projects and the rest. It should not be substitute funding. I fear that Graeme Dey’s example of mobile libraries is substitute funding. Libraries are a local authority function, and it should not be for the money that I am talking about to fill the gap.

I am about to finish, Presiding Officer.

If communities were in control and were in a genuine partnership, there would be less resistance to wind energy projects.

Mr Findlay believes that if he does not draw breath, I will not be able to get in to tell him to hurry up.

13:12  

I join members in thanking Richard Lochhead for securing this debate on onshore wind.

We have seen significant growth in onshore wind over the past 15 years, and we have probably seen some missed opportunities, too. Some credit is due to the Scottish Government, particularly as it was elected in 2007 on a manifesto that promised a moratorium on onshore wind. Despite that, we have seen some sensible decisions from Government and councils, and the right projects have appeared in the right places in Scotland, by and large. I hope that we can now look forward to the extension and repowering of projects by taking down the older turbines from 10 to 15 years ago and putting in place more efficient turbines that can produce more power while reducing the footprint of wind farms on the landscape.

There are opportunities through the new repowering initiative, particularly if we take a landscape-scale approach and start to embed more community benefits. Some of the early negotiations that many members have talked about included either no commitment to community benefit or a commitment to some, perhaps at £1,000 per megawatt. We now have the opportunity to renegotiate those deals and ensure that communities get a much more significant amount of the benefit.

It is important to recognise that financial benefits are not compensation; they mean the communities that host the wind farms sharing the financial benefits. They might be crumbs off the table, but they are not compensation. If we class community financial benefits as compensation, the logical conclusion is that that becomes a material consideration in the planning system, which could create an unhelpful precedent, particularly if it were extended to fracking. Planning decisions should be made on the basis of not the size of the financial benefits that are being offered but the merits of the development and whether it is the right development in the right place.

The elephant in the room in today’s debate is land reform. The best way for communities to share in the rewards of these projects is for them to own the land. If they cannot get ownership of the land, they should at least be able to take a financial stake in a project through a joint venture. That would ensure that they did not just get the crumbs off the table but got the cake and probably the bakery.

The fantastic growth in wind power that we saw in Denmark in the 1990s was driven by landowning farmer co-operatives coming together to develop wind power in their communities and making a huge contribution. We have seen impressive growth in Scotland but, by and large, it has come from estates working with large corporations.

For example, in my area, Moray Estates is the big landowner—it probably owns most of Richard Lochhead’s constituency as well—and it worked with corporations to develop Braes of Doune wind farm early on. Since 2006, ownership of that wind farm has been passed around, and the original level of community benefit, which was £1,000 per megawatt, has never gone up but has remained the same. Although wind the farm has made a significant contribution to the community—worth about £72,000 per year—that money is not transformative. It buys play equipment and kit for the playgroup, but it does not allow the playgroup to buy its own building, which it desperately needs to do.

We need transformative opportunities, an example of which we can see by looking across the Forth Valley. Earlsburn wind farm was an early joint venture in which the community bought into a project. By the time that it has paid off its share, it will be earning about £400,000 every year.

My last point is about how we can unlock capacity in the future. At the moment, dozens of megawatts of onshore wind power is stuck in the system because it cannot find a route to market. I say to Alexander Burnett that the Westminster Government needs to realise that the onshore wind farm is the cheapest source of renewable energy. We must allow onshore wind to compete on price in contracts for difference. Allowing it to compete for subsidy-free market support will see more appropriate development coming through, and only by doing that will we start to unlock future community benefit. Communities will need a greater stake in that: they will need land ownership and project ownership as well. If we just collapse the industry and do not allow growth, we will not see opportunities emerging.

13:16  

I congratulate Richard Lochhead on securing today’s debate and on giving members the opportunity to discuss an aspect of Scotland’s role in renewable energy production that is rarely at the forefront of discussions on our low-carbon future.

Scotland is already a world leader in renewable energy, helping to reduce greenhouse gas emissions and ensuring that we benefit from the creation of green jobs. Scottish Renewables estimates that 8,000 people are directly employed in the onshore wind sector.

Some benefits of wind farms are less obvious. For example, farmers and other local landowners receive rent for turbines that are erected on often fairly unproductive land, thereby repurposing it to provide a sustainable income. Much of that money will then be spent locally, further reinforcing the wind farm’s enduring legacy of investment.

The benefits of wind farms in Scotland do not end there. Beyond creating sustainable employment and clean energy, wind power also generates opportunities for local regeneration and community empowerment. However, more can and should be done by actively encouraging community ownership of turbines whenever and wherever possible so that more people and communities can benefit from having them in their areas.

In Cunninghame North, many local initiatives have benefited from the release of wind farm community funds. Since it became operational in June 2006, Dalry community wind farm has generated enough electricity per annum to power approximately 11,800 homes, thereby displacing around 20,300 tonnes of carbon. In addition, the wind farm provides annual community benefit funding equivalent to £2,500 per megawatt of its installed capacity, which totals £45,000 per annum. By the time that the wind farm’s 25-year operational period comes to an end, the local community will have benefited by more than £1.13 million. Of course, if the recommended amount of £5,000 per megawatt were to be spent, the community benefit would be £2.26 million. In my constituency, Kelburn wind farm community fund provides financial support to Largs, Fairlie and Cumbrae, with a focus on projects that deliver social sustainability and environmental and energy efficiency. Its board publishes annual reports on the value of grants made, the community groups that benefit and the nature of its projects, and such information is freely available.

Other renewable sectors should also bring community benefits. At SSE’S Hunterston national offshore wind turbine test site, £238,000 has been invested in its community fund since it began in 2013, with grants having been made to 102 local projects. In Fairlie alone, those grants ranged from £3,000 to help the primary school parent council to fund a children’s adventure trail to £2,340 to support organic growers and £6,000 to help the bowling club to refurbish its car park.

Not all areas of Scotland are suitable for wind farms—for example, national and regional parks and other areas of outstanding natural beauty. Nevertheless, Richard Lochhead’s motion raises the important point that community benefit is spread unevenly across Scotland and, as Graeme Dey and others have touched on, communities often do not see it in their localities.

In 2014, a North Ayrshire Council report revealed that communities receive only 20 per cent of the £5,000 that the Scottish Government recommends that developers invest per megawatt, with the maximum benefit paid by any wind turbine development being just £1,570 per megawatt. Also, the ad hoc nature of contributions does not optimise resources for community projects. New onshore wind farms will not have access to UK Government subsidies, and the Scottish Government will not be able to oblige payment of community benefits or determine how funds are spent.

Although developers are encouraged to follow the good practice principles that were set out in 2014, some communities and campaigners have called for more transparency and accountability around how funds are spent. Unease over the transparency and auditing of the actual developer contributions breeds hostility and mistrust of energy companies and may increase reluctance among residents to support future developments. If a local community has questions about significant discrepancies between the reported community spend and the stated benefit per megawatt installed, it should be able to receive clarification and hold developers to account.

I look forward to the report of the steering group that is reviewing the good practice principles and the outcome of the formal consultation that is to be undertaken this year. It is right that communities and industry stakeholders shape the process, and it is vital that funds for community benefit are distributed fairly and prudently. I support the call from Scottish Renewables for a flexible and holistic approach to community benefit packages and re-emphasise the need for more transparency and accountability in the sector.

13:21  

We all understand how onshore wind has been used to deliver environmental benefits by helping to replace fossil fuels, to the point at which it accounted for two thirds of our renewable electricity generation in the last quarter of 2017. However, coupled with the environmental benefits is the potential for huge economic gains, particularly at a local level. We can already see that enviroeconomic success in action. UK emissions are down by two thirds since 1990, while the British economy has increased by a third. In Scotland, emissions are down by over 40 per cent since 1990 and renewables, particularly onshore wind, have provided significant economic benefits for our communities.

For example, the motion notes how communities have already received millions of pounds from onshore wind projects in this year alone. In addition, almost half of all British onshore wind jobs are in Scotland. That is thousands of high-quality jobs that will positively impact communities through increased spending and tax revenues. Scotland-wide, we benefited from £1.5 billion in revenues from onshore wind in 2015, and it is estimated that, over its lifetime, every turbine is worth more than £0.5 million to the Scottish economy and over £100,000 to local economies. That is capitalism and environmentalism working hand in hand to protect our environment, create jobs and boost our economy.

On that basis, does the member believe that there should be more onshore wind farms in Scotland and, if so, where should they be?

There certainly should be onshore wind farms where communities support them. There is a compelling case that, where local communities are advocating onshore wind, we should allow them to receive the benefit that it undoubtedly provides.

Overall, as good as the numbers are, they are in some ways divorced from the practical day-to-day needs of people who are asking where their share of the renewables boom is. It is a fair question, because not every community can easily access the rewards. Some communities, such as high-density urban areas like Paisley, cannot easily accommodate wind farms and must settle for indirect benefits or rely on others to share the proceeds of their projects. Alternatively, communities might find themselves competing against one another or facing requirements to access funds, as is the case with the East Renfrewshire renewable energy fund, which is an important and welcome funding source but one over which individual communities do not have full control. Furthermore, cash payments are not the only socioeconomic benefit. For example, having a say in how projects are run might be of greater importance to particular areas.

I recently raised that matter with the Minister for Business, Innovation and Energy and I was encouraged to find that he recognised its importance. Ensuring that everyone can benefit is key to maintaining wide support for further carbon reduction. Current support for renewables is overwhelmingly strong. It was 79 per cent in a recent UK Government survey, but we risk squandering that good will if only some people reap the rewards while others bear the costs.

It is for those reasons that the Scottish Conservatives are calling for the introduction of a renewable energy bond—an opportunity to ensure that the rewards of our renewable future are distributed more evenly by pooling and sharing ownership. Just as we want every individual to feel that they have a stake in the success of the country, so too do we want communities to have that same aspiration: something to work towards, invest in and empower themselves through. The task for us all is to make sure that that actually happens.

Mr Macdonald will be the last contributor in the open debate. If we are going to allow the minister to respond at all, we will have to extend the debate slightly. I am minded to accept from Richard Lochhead a motion without notice under rule 8.14.3 to extend the debate by up to 30 minutes.

Motion moved,

That, under Rule 8.14.3, the debate be extended by up to 30 minutes.—[Richard Lochhead]

Motion agreed to.

I am pleased that we want to hear from the minister.

13:26  

I thank Richard Lochhead for raising the debate on an issue that was topical when I was the minister responsible for consenting wind farms some 15 years ago and is still topical today.

As Neil Findlay said, the most direct community benefit, now as then, comes from community ownership, and Udny in Aberdeenshire provides a very good example. Udny Community Trust Company owns the local wind turbine, supplies electricity to local homes and business and uses the proceeds to support local development and good causes. I have seen for myself the buy-in of local people, from the farmer who owns the site to the volunteers who get together to decide where best to spend the revenue that has been generated in order to benefit their local area.

I am also familiar with plans for a community enterprise on a larger scale, in the Isle of Lewis, where the Stornoway Trust was one of Scotland’s first community landowners as long ago as the 1920s. The trust is the landlord of crofts and common grazings across the parish of Stornoway, and is now working on the Stornoway wind farm project, which is one of several consented major wind projects in Lewis—in its case, in partnership with EDF.

We have seen the vital role that renewable energy can play in community land buyouts—to which Mark Ruskell referred—from the hydro scheme on the river Don in Aberdeen to single wind turbines in islands like Gigha and Eigg. If having a share in ownership brings the most direct benefits to communities, then the interconnector to take power from Lewis to the mainland will be an enabler of community benefits. It must be built with enough capacity to take power from projects that already have consent—such as Stornoway—and to stimulate community-led projects across the islands by allowing them to sell their surplus power to the grid as well.

Not every community enterprise can have ambitions on the scale of the Stornoway Trust, and that is where local authorities can also be vital enablers. Aberdeen renewable energy group was set up by the city council and helped to attract European Union funding, and now the Swedish energy company Vattenfall has built on that work by deploying the world’s largest wind turbines in Aberdeen bay. They are due to be commissioned later this month and I was delighted to be able to visit Scotland’s newest wind farm just a few days ago. It is truly a scheme of scale, and it comes with community benefits to match.

This week, Vattenfall announced a £3 million scheme involving investment of £150,000 a year for the next 20 years. Ten per cent of that will be ring fenced for communities nearest the point where the power comes ashore at Blackdog, while the rest will be open to bids from communities right across Aberdeen and Aberdeenshire. Projects will have to demonstrate both community benefit and environmental sustainability, but there is clearly great potential there.

It seems to me that, in different ways, all of those wind projects point in the right direction. Wind energy generation at farm scale and at community-owned small scale bring benefits to the whole of rural Scotland, as in the examples of Udny and others mentioned today.

Scotland’s islands—Orkney and Shetland as well as the Hebrides—offer a whole new platform for both wind and marine renewables, with community enterprise as one partner, as in the Isle of Lewis. However, they need the right connections in order to succeed, and I hope that the minister will agree with that, and that the Western Isles need a 600MW connection if they are to maximise the economic benefits from wind for communities there.

Aberdeen has been the oil capital of Europe for forty years, and is now developing renewable energy on a European scale, with millions of pounds in benefits for local communities. We want more projects such as these, and they need to have community benefit and support, adequate infrastructure, and political backing. We want a diversity of co-operative and community enterprise and an active role for local councils too. I hope that that is the positive message that we will send from this debate.

I call Paul Wheelhouse to respond to the debate—you have around seven minutes, minister.

13:30  

Thank you, Presiding Officer. I was worried that you were going to say that I would have to use the half hour by which the debate had been extended.

I thank Richard Lochhead, as others have done, for securing a debate on a very important issue. I am aware that over the years he has taken a keen interest in the issue and is active on it locally in his Moray constituency. Indeed, Mr Lochhead has corresponded with me on the matter a number of times. Colleagues across the chamber will not be surprised to hear that it is also an issue in which I take a particularly strong interest. I will say more about that shortly.

I am pleased that the motion gained cross-party support. That is important—it demonstrates that we broadly share a common view that communities near onshore wind developments, or any renewable energy project, should have the opportunity to share in the rewards from their local energy resource.

Before I respond to members’ contributions, I would like to set out what this Government has done, what it is doing, and our plans for the future. It is important to emphasise that due to reservation of powers in the Scotland Act 1998, the Scottish Government has no direct powers to oblige developers to pay community benefits or to determine how funds are spent. In the absence of clear powers, we have focused on developing a coherent and ambitious energy strategy for Scotland, and on driving new standards of good practice in community engagement and community benefit. The latter, in particular—the subject of today’s debate—has been effective in helping to transform industry practice in recent years, and has brought transparency and openness into a system that I know some people have viewed as being secretive and divisive. We may not be entirely there yet, but I hope that members will acknowledge that progress has been made.

It is important to stress that community benefit payments remain a valuable source of income for communities. Graeme Dey made that point in the context of decreasing LEADER funding in his area. Community benefit payments support a wide variety of projects, including health and wellbeing activities, training and student support, and employment opportunities. Other examples have been given today by members from across the chamber.

If we focus only on projects that are not wholly community owned, we see that in the past 12 months almost £15 million—about £3,400 per megawatt of installed capacity—has been given to communities that have direct links to renewable energy projects through hosting commercial development. Such projects can make a real difference to communities, and in many cases can be transformational.

The payments typically continue to be made each year of a project’s lifetime. For example, last year, social housing providers including Berwickshire Housing Association in my home area of the Scottish Borders and, more recently, Fyne Homes in Argyll have developed projects that will invest in new social housing while paying the community benefits to the host communities, in line with our good practice principles. I understand that in the case of BHA, its three-turbine Fishermen Three wind farm at Cockburnspath will generate £20 million in new revenue for BHA to help to fund an additional 500 affordable homes over the 25-year lifetime of the site, while also meeting good practice principles on community benefit.

The publication in 2014 of our “Scottish Government Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments” has been crucial to our success and it has provided a benchmark for the sector. It has fairly quickly become an invaluable tool, particularly for communities that have little or no experience—a point that Neil Findlay and other members made. The Welsh and UK Governments have also adopted the document for their own use.

Scotland is very much leading the way across the UK in how we deliver renewable energy projects, and in ensuring that communities are front and centre. I welcome the fact that, on the whole, developers and communities have adopted the good practice principles, which has helped to increase trust and credibility.

In light of the fact that no wind farms in my constituency pay anywhere near the national standard, and that solar farms are now being built in my constituency—ironically by a company called Elgin Energy that I think is based outside Scotland—can the minister confirm that the principles and guidance apply to all onshore renewables, and not just to onshore wind, and that solar farms and other forms of renewable energy should therefore also be paying towards community benefits?

That is certainly the intention. We started, as I think Mr Lochhead knows, by looking at projects that took place on Government land—principally Forestry Commission Scotland land—and seeking to ensure that good practice was maintained in terms of payments per megawatt of installed capacity. However, I acknowledge the point that Mr Lochhead has made. With regard to the recent consent for the solar farm to which Mr Lochhead referred, unfortunately, community benefit is not part of material consideration in planning applications.

The relationship between the developers and the local community is critical to ensuring a positive experience and outcome for all parties. I acknowledge that there have been examples of developers not adopting the good practice principles, and examples of relationships between developers and communities breaking down. I am aware of a number examples in which that has happened at the point of sale of a farm, not the least of which is the example that Mr Lochhead has given. We want to look at such issues in the context of the review that has been mentioned.

I am also aware that we need to work hard to explain that sites that were developed prior to 2016 do not benefit from the policy that is now in place. The policy has kicked in from 2016, with developers now taking on board the good practice principles. I am glad to say that the vast majority of projects that we have encountered since 2016 follow the good practice guidance, although some do not, which is disappointing.

Looking to the future, I want to ensure that the next generation of onshore renewables, including onshore wind, continues to have positive and valuable relationships with local communities. However, we must also accept that there has been a profound change in the support mechanism, to which Mark Ruskell referred, and that investment conditions are more challenging, particularly for new onshore wind projects. Changes to UK Government policy over the past few years have resulted in greater uncertainty around funding a route to market. That has been highly frustrating, to put it mildly, so we continue to argue constructively that the UK Government should rethink that position and develop a price stabilisation mechanism to provide a route to market for the sector. As Mark Ruskell said, that could be done through the contract for difference auction pot, which does not require subsidy and would allow onshore wind to compete to provide electricity at low prices.

I stress that I continue to expect developers to offer meaningful community benefits. Richard Lochhead summed that up, and others including Lewis Macdonald referred to community-owned projects. There are, in effect, three key players in the negotiations: the landowner—sometimes the land is owned by the community—the developer, and the community that surrounds the site. A fair result for all three parties is needed. Sometimes, the community is the landowner and is in the immediately affected area, which means that we can maximise the benefits through community ownership.

However, in developer-led projects there needs to be balance and fair allocation of benefits to all three parties. Community benefits should continue to be an integral part of all new projects, although we recognise that such projects might be packaged in different ways—for example, there might be more shared ownership, to which members have referred.

Last December, I published “Scotland’s Energy Strategy: The Future of Energy in Scotland” and an accompanying detailed onshore wind policy statement, which included a commitment to review our good practice principles during 2018. As I have mentioned in correspondence to Mr Lochhead, the time is right to undertake that review. I am pleased to say that it is not my intention to make wholesale changes, but instead to enhance and amend some aspects in order to reflect better the lessons that have been learned, and current and future investment conditions. That process has started.

Will the minister take an intervention?

Do I have time, Presiding Officer?

Oh, why not?

Does the minister agree that, in order to fulfil the potential of Scotland’s islands in terms of energy production and community benefit, there needs to be adequate interconnection between the islands and the Scottish mainland?

I wholly endorse Lewis Macdonald’s view. We have put forward a strong argument in the consultation on remote island wind, and we are thankful that we were successful in that technology being included in the forthcoming contract for difference pots. We maintain that it is essential that all three islands authority areas have the required island connections.

The process has started: we have established a steering group, as members have said. The membership of the group includes representatives of developers and, importantly, communities that will oversee the process. I thank them all for their participation. To date, the group has met twice. It has been reviewing feedback from a number of stakeholder workshops that have been held, and more workshops are planned for later this month. A formal consultation on any proposed changes to the good practice guidance is planned for later this year or early next year.

I will finish by referring to points that have been made by members. In terms of our planning aspirations, we have a target that, by 2020, at least half of newly consented renewable energy will have an element of shared ownership. Shared ownership will play a key part in helping us to meet our target of 1GW of community and locally owned energy being produced by 2020 and 2GW by 2030. I am pleased to say that, by June 2017—we are due to receive updated figures in the near future—666MW of such energy had been produced, so we are making good progress towards the targets.

Mention has been made of renewable energy bonds, which we raised in the context of our energy strategy. I acknowledge Maurice Golden’s interest in that area. He mentioned the high degree of public support for renewables, which stands at 79 per cent, according to a survey that was commissioned by the UK Government. As he knows, there is in Scotland an even higher level of public support for renewables. Community benefit has played a large part in creating a more positive attitude to onshore wind development in our country.

Over the years, we have transformed our approach to community benefit. We are making the whole process more transparent by publishing national guidance. We argue that that has been to the benefit of the industry as well as of local communities, because although community benefit is not a material planning consideration, it has helped to build higher levels of community support for such projects.

However, the time is now right, as we embark on a new chapter for onshore renewable energy, to take stock and to ensure that our good practice principles remain fit for purpose. In the debate, a number of issues have been raised that I am happy to ask the steering group to consider in the course of its deliberations.

I reiterate that I am committed to ensuring that Scotland’s communities continue to benefit from local renewable energy projects and that they derive a fair share of the benefits from the projects, so we will work with all interested parties to make that happen.

13:41 Meeting suspended.  

14:30 On resuming—