Offshore wind farms paid ‘measly’ sum to communities

Scotland’s six offshore wind farms have paid just £150,000 to nearby communities in the last 12 months.

Holyrood energy minister, Michael Matheson, revealed the figure in response to a written question by Scottish Labour MSP, Monica Lennon, who told The Ferret she was “astonished” by the “measly” sum.

The Scottish Government encourages wind farm developers to make an annual payment to local areas impacted by the building of a new project. This is paid directly by the wind farm’s owner to the community which hosts the turbines and is used to support local projects.

The payments —  known as community benefit funds — are often viewed as a form of compensation for the visual impacts on environments that wind farms have, as well as the disruption experienced by nearby residents throughout the construction and operation of the farm.

They are also considered to be a way of ensuring that part of the wealth produced by Scotland’s energy resources is locally owned and used to benefit local people.

Scotland’s offshore wind farms — which are valued at £889m  — are responsible for only 0.7 per cent of community benefit payments, despite making up nearly ten per cent of wind energy capacity.

Campaigners argued that the figures added to the “overwhelming evidence” that Scotland’s offshore wind has been “exploited not for national benefit, and certainly not for the benefit of coastal communities, but for the benefit of corporations”.

But the renewable sector told The Ferret that focusing on community benefit payments would be “doing a disservice to an industry which is about to transform the fortunes of Scotland’s coastal communities forever” through investment in supply chains.

Initiatives supported by community benefit funds include refurbishments of community halls, befriending programmes, bursaries for further education, and energy efficiency schemes.

In March 2022, as part of our ‘Priced Out’ series on the cost of living crisis, The Ferret revealed  that onshore wind farm owners were paying “loose change” to local communities, even though they are due to produce electricity worth over £3bn this year.

Payments from onshore wind still dwarf those made by the offshore industry, however. One offshore wind farm could be paying as little as £55 to communities per installed megawatt each year.

The Scottish Government recommends that companies building onshore wind farms pay £5000 per installed megawatt to the local community annually.

It has not set a recommended yearly rate for offshore projects. This is despite Highland Council asking it to consider one as far back as 2016.

Although community benefit payments are voluntary, they have become a well-established part of renewable energy projects. The Crown Estate —  which manages the seabed that wind farms are built on —  describes them as “essential” if operators are to be considered “a good neighbour” to coastal towns.

They are also separate from money paid to Crown Estate Scotland to lease parts of the sea bed, and from other supply chain benefits — such as employment — which accompany the wind farm.

Scottish Labour MSP, Monica Lennon, argued that the size of the payments showed the owners of Scotland’s wind farms need to “realign their moral compass and give communities what they deserve”.

This is pocket change from an industry estimated to be worth nearly £1bn a year.

Monica Lennon MSP, Scottish Labour

Lennon said: “I’m astonished to learn that a measly £150,000 has been paid in community benefits from offshore wind farms over the last year.

“This is pocket change from an industry estimated to be worth nearly £1bn a year. It is appalling that big energy firms are raking in eye-watering profits while many people choose between heating and eating.”

According to Robin McAlpine, head of strategic development at the think tank Common Weal, the Scottish Government’s “whole strategy” on offshore wind has so far failed to deliver for coastal communities.

McAlpine said: “There is pretty overwhelming evidence that Scotland’s offshore wind has been exploited not for national benefit, and certainly not for the benefit of coastal communities, but for the benefit of corporations.

“The whole strategy is agreed by the Scottish Government, its agencies and the corporate lobbyists in private and it is more than clear that, if the Scottish Government fought Scotland’s corner at all, it did so woefully.”

Scotland is heading for an offshore energy boom as it transitions to cleaner technologies to tackle the climate crisis. The country is estimated to have a quarter of Europe’s offshore wind and tidal energy resources.

Seventeen wind farms built as a result of January’s ScotWind leasing round are expected to deliver 25 gigawatts of offshore wind energy capacity. This is more than double Scotland’s current electricity needs.

Debate over how best to maximise Scotland’s renewable potential continues to rage, though.

ScotWind — which auctioned sections of Scotland’s sea bed for the construction of offshore wind farms — raised £700m for the country’s coffers. But opposition politicians argued that the sea bed was sold “on the cheap” to multinationals with “questionable human rights records”.

Meanwhile, trade unions have expressed concern that too little is being done to ensure that the jobs needed to manufacture and maintain the wind farms are kept in Scotland.

The firms who won in the ScotWind auction each made pledges to invest heavily in the Scottish supply chain. Many also promised to pay more to local communities.

Charlotte Stamper, senior policy manager at industry body Scottish Renewables, argued that the “£20-30bn of investment” delivered by the ScotWind projects is “about to transform Scotland’s coasts”.

“This investment will deliver tens of thousands of skilled jobs, allow Scottish firms to compete in the global offshore wind market and revitalise communities which currently rely on seasonal tourism,” she said.

“The majority of these offshore wind farms have already committed to provide some form of voluntary community benefit, as onshore wind already does to the tune of £22 million a year, but to focus on that when the prize is so much larger, more far-reaching and longer-lasting would be doing a disservice to an industry which is about to transform the fortunes of Scotland’s coastal communities forever.”

A Scottish Government spokesperson pointed out there are differences between onshore and offshore projects “with many of the latter located long distances from shore and therefore having reduced interaction with communities”.

They added: “We will be updating our Good Practice Principles for Community Benefits from Offshore Renewable Energy Developments this year, to ensure guidance remains relevant and valid for sector operating conditions, and local communities continue to benefit from offshore renewables deployment in Scotland.

“We will continue to work closely with communities to deliver 2GW of community and locally owned energy by 2030 – more than double the current level – as part of our just transition to net zero.”

Photo Credit: iStock/Lakeland-Photos

This story was updated at 09:18 on 30/05/2022 to reflect the fact that onshore wind farms are expected to pay £5000 per installed megawatt of installed power, not of energy produced.