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August 17, 2010

Community sector is missing out

Last week the government allowed local authorities to cash in on the renewable energy bonanza. Welcome relief no doubt amidst the doom and gloom of budget cuts.  And although an increasing number of communities are waking up to the possibilities with the active support of Community Energy Scotland, many more are missing out on this once in a life time opportunity.  And as the folk of Fintry have already demonstrated, it doesn’t have to be this way

Current models of community benefit from windfarm developments

Current models of how communities can benefit from the development of windfarms  broadly fall into one of two categories :
1. neighbouring communities are offered a £’s per megawatt compensatory payment by the developer – often this is brokered in some way by the local authority – or
2. the community seek to develop and retain ownership of the windfarm.

A third model, a hybrid of the two, has been established by the community of Fintry, Stirlingshire. This has involved the community negotiating with a windfarm developer, Falck Renewables, to extend the footprint of a proposed windfarm by one additional turbine which the community’s energy company (Fintry Renewable Energy Enterprise ltd) effectively financed and now own. In effect, the community has raised the equivalent proportion of the increased costs of the overall project and in return will receive an equivalent proportion of the income. In this model, the bigger the overall development the lower the marginal cost of increasing the footprint of the development.
Fintry is a community which is adjacent to the proposed windfarm development and in other circumstances could legitimately claim to feel some visual/environmental impact and seek the sort of compensation outlined above in the first option for community benefit. Choosing the hybrid model however, the community of Fintry expect to enjoy significantly greater long term financial return and have already started to reinvest surpluses in a programme of work to improve the energy efficiency of homes in their community. It is important to stress that this model does not preclude the more usual community benefit payments being negotiated with other neighbouring affected communities. In this case, Fintry contribute their share of the community benefit payments to other nearby communities.

The common factor in all of these models is that community benefit is restricted to communities that happen to be adjacent or relatively nearby the site of the development. There is however, no reason why the potential beneficiaries have to be restricted to neighbouring communities.  The principles and methodology of the Fintry model could be expanded in such a way that would enable a wider range of organisations to benefit.

Shifting the focus of community benefit

Fintry have established the principle that it is possible within any windfarm development for a wider range of community sector interests to derive financial benefit than just those neighbouring settlements which are adjacent to or nearby the development.

At zero cost to the developer other than the time invested in agreeing the detail of the financials, there would be very significant gains for them in terms the PR and Corporate Social Responsibility objectives of being associated with such an innovative and sustainable solution to the funding needs of the ‘supporting architecture’ of Scotland’s Third Sector. This model could be applied to the intermediaries that support much of the Third Sector or indeed sections of the Third Sector that are either not geographically proximate to a wind farm site or are communities of interest such as those involved in the arts or in other fields such as mental health. In addition, a development of this type, with its much broader community benefit being acknowledged, brings a fresh counter-argument to those of the anti-wind lobby.

Establishing a constructive, mutually beneficial relationship between the private sector and the voluntary/community sector is usually interpreted as a request for donations or sponsorship. Corporate social responsibility often struggles to find expression in a way which all parties can understand. This model of partnership between a private developer and a defined consortium of respected community sector bodies offers a unique opportunity to all parties concerned – it is one of those rare instances which is genuinely a win–win for all parties.

An additional benefit to the developer of this approach is that they would have at their disposal, if required, the expertise and knowledge of the community sector intermediaries to help negotiate/mediate the community benefit payments to the neighbouring communities.