Benefitting Communities - Can new renewable energy projects help communities?

NESCAN Hub

#news

#Buildings & Energy

Publish Date: January 2025

Last Updated: April 2025

The Scottish Government is currently reviewing its “Good Practice Principles” for new renewable energy projects. But what exactly does "Community Benefit" mean, and what could it look like in practice?

In December 2024, the Scottish Government launched a public consultation focused on community benefits from net-zero energy developments.

The consultation itself is split into two parts: the Scottish Government's review and the delving into the wider concept of Community Benefits.

Scottish Government Consultation

The consultation is part of a review of the Good Practice Principles for Community Benefits linked to onshore and offshore net-zero energy developments. The goal is to update the guidelines to better support both communities and developers in maximizing community benefits from these projects.

The review builds on the previous set of principles, but with updates to account for newer technologies and the Scottish Government's evolving targets and goals. The review covers a range of energy solutions, including renewable sources like wind, hydro, and solar; non-renewables such as bioenergy; and related technologies like hydrogen, battery storage, heat networks, electricity transmission, and carbon capture.

The consultation highlights the current community benefits available and identifies where opportunities are lacking. It asks for input on whether new technologies should be included, whether certain practices should be standardised, and how communities should be involved in the decision-making process. It also explores whether there should be a fund benchmark and what kind of impact these funds could have on local areas.

Community Benefits – More Than Just Money

“Communities with access to community benefit money own and operate more businesses than they did previously; including post offices, hotels, shops, transport, even a cinema. They deliver more services for families, for the elderly, the young and the vulnerable. And they own more assets including buildings and land…” – Rachel Searle, Head of Communities, Foundation Scotland

While community benefits are typically thought of as financial contributions, they can (and should) go beyond just monetary support. Ownership of energy projects is often viewed as a significant benefit, but how that ownership is structured and managed can vary widely.

Financial community benefits can take the form of direct payments to households, discounts on household energy bills or by creation of community funds.

In some cases, community benefits are decided without much input from the community itself, with commercial entities taking the lead. However, there are examples where communities have more control over the benefits generated by these projects. See local examples below and here.

Wholly Community-Owned Energy Generation:

In Aberdeenshire, the Udny Community Trust owns and operates a wind turbine at Tillymaud Farm through the Udny Community Wind Turbine Company Ltd. The project started with an annual income of around £50,000, expected to rise to over £150,000 after the loan repayment. This income is used to support a variety of community development activities in the area, benefiting all local residents.

Commercial Projects with Community-Owned Stakes:

The Boyndie Wind Farm project, located at Boyndie Airfield in Aberdeenshire, is a partnership between Falck Renewables and the local community. The Boyndie Co-op owns a 2% stake in the wind farm, which generates enough energy to power approximately 8,500 homes. Community funds have been directed to support local schools and renewable energy initiatives.

Commercial Projects with Community Payments:

West Coast Energy (WCE) partnered with the Huntly Development Trust (HDT) to create a community benefit scheme tied to their wind project. The agreement provides an annual income to the community based on energy output or profit, whichever is higher. A percentage of the funds is earmarked for the areas most directly impacted by the turbines, with a portion reserved for the surrounding communities. The Cairnie Glass Community Trust now manages this fund.

Aberdeen Offshore Wind Farm, operated by Vattenfall, supports a range of community initiatives through its Unlock Our Future Fund, managed by Foundation Scotland. The fund supports projects that promote sustainability, such as green community spaces, sustainable transport, and creative solutions for local challenges.

Contribution to a National/Regional Community Benefit Fund:

These might be managed by a separate entity. Usually these are offered with outcomes, not necessarily climate related, and usually for projects that support the local communities. SSEN Transmission has their Regional Community Benefit Fund and Vattenfall’s Aberdeen Offshore Wind Farm supports a range of community initiatives through its Unlock Our Future Fund and is managed by Foundation Scotland.

The Importance of Full Ownership and Accountability:

One key issue in the discussion of community benefits is ensuring that local communities are included in the creation of and have full ownership of the benefits. Without a clear commitment to community ownership, payments from developers can sometimes feel like mere “pay-offs,” rather than a real, lasting investment in the local area. This can lead to situations where funds are available but are not accessed by the communities they are in place to develop.

The question remains: why aren’t certain percentages of commercial energy projects automatically allocated to community ownership? How can we place community ownership at the forefront of these projects, rather than leaving it as an optional, secondary consideration?

Communities who have shared (or full) ownership of renewable energy projects benefit with regular income, stronger partnerships with commercial entities and local groups, they can have more impact in deciding how these projects are designed and build leading to a more resilient community. Energy projects which have shared ownership are more likely to have planning applications approved, so it is a benefit for all parties.

Energy developments which do not involve the community at development level can lead to:

Sensory impacts on communities (wind turbines are loud).
The distribution of impacts from the development falls unequally on society – private landowners/businesses can profit whilst the rest of the affected community are uncompensated.
Energy developments are disproportionately felt by relatively disadvantaged groups (Joseph Rowntree Foundation). Wind-energy development has gravitated towards places already adversely affected by previous environmentally damaging activity. These are the communities least able to object.

So, How Should Community Benefits be Managed?

If you're involved in community energy projects, or are thinking about starting one, and want to understand how to organise or claim community benefits, there are some useful resources available. One example is the Community Benefits Toolkit offered by Local Energy Scotland. This guide helps communities navigate the process of securing and managing community benefits from energy projects.

Read NESCAN Hub’s resource for more information about community energy schemes. Contact NESCAN Hub and we can introduce you to members who are currently running projects, support community conversations to develop ideas into projects or direct you to who else to speak to.

There are several organisations that support community groups to establish and run projects. CARES (Local Energy Scotland) the start point for projects, Community Energy Scotland) and Energy4all.

Conclusion:

Renewable energy infrastructure is happening at a huge scale across Scotland and is essential for the global journey to net-zero. The North East has a long history with the energy sector but communities here are in danger of missing out in benefiting from this new development. Commercial entities are ready to go, have the experience, and have the clout to push projects. Communities need time and support to give them the opportunity to be involved and ensure that energy generated in Scotland, benefits Scotland’s communities, taking lessons from how Aberdeen’s oil industry progressed. The Scottish Government are the ones who need to hear from communities and have a huge say in how communities can be involved. NESCAN Hub, the other Regional Hubs, alongside partners like Community Energy Scotland, are encouraging as many people to pass on their views – by taking part in this consultation. Even if you don’t answer all the questions, we need the smaller communities’ voice because what’s best for Aberdeen is different from Banff. We need to work together and ensure Scotland’s community have their say and are an important contributor to this energy transition.