Wind has been the world's fastest-growing renewable energy source for the last 7 years, and this trend is expected to continue as wind becomes even more viable financially.
However, there has been a feeling in some local communities that whilst others get the benefit of the energy generated by this source, they bear the brunt of the cost, in terms of the perceived impact on the local landscape and house prices. In many cases, developers have provided community benefits when putting forward onshore projects, but the approach has been inconsistent.
Model for other countries?
Against this backdrop a Community Benefits Protocol has been developed by industry association RenewableUK, in consultation with central and local Government and other stakeholders (including independent community representatives). The Protocol sets out the commitment by RenewableUK's members to deliver “real and tangible benefits” to those communities that live near onshore wind farms of 5MW and above (installed capacity).
- It only applies to onshore wind farms with an installed capacity of 5MW or more;
- The community(ies) with an interest in the wind farm will be identified through a process of engagement involving the applicant, the Local Planning Authority (LPA), and relevant stakeholders as defined in any Statement of Community Involvement, or Statement of Community Consultation documents submitted by the project applicant;
- The developer or operator would make contributions of a minimum of £1000 per year per MW of capacity. The contributions would be made throughout the projected life of the installation, beginning within 12 months of the installation starting to generate power;
- The contributions can be financial payments or benefits in kind, in each case tailored to the community in question. In general, they can be made annually but can be aggregated depending on their nature. It is expected that they would take account of any obligations in a Section 106 (planning obligation) agreement imposed by the local planning authority to secure planning permission, meaning the developer should not have to pay twice;
- Certificates will be issued for the project and its operation. Although the scheme is not compulsory, any wind farm developer and operator who is a member of RenewableUK would face the risk of revocation of certificates if it did not adopt the Protocol; The provisions would take effect 3 months from the initial announcement, and would apply to projects for which a planning application is made after that date. This gives wind farm developers a small window of opportunity to amend their plans accordingly. The Protocol is being introduced for England only at this stage, with similar arrangements for Wales and Northern Ireland likely to arrive shortly after.
Whilst the protocol provides a welcome framework for community benefits, the detail of how the scheme will operate in practice will need to be ironed out, and it has been greeted with scepticism in some quarters.
And the additional cost may result in some schemes becoming unviable, particularly as the Government incentive schemes for projects such as this (Renewable Obligations Certificates or ROCs) will be reviewed periodically.
However, there is a need to encourage renewable generation, due to the UK's target of generating 15% of the country's energy requirements through renewable sources by 2020, and if an incentive scheme results in more communities supporting wind farm projects, then some believe that may be a price worth paying.
NB: Renewable Energy Focus will be profiling the Community Benefit Protocol in more detail in a forthcoming publication.
Anita Gupta is a partner at law firm DWF.
Renewable Energy Focus, Volume 12, Issue 2, March-April 2011, Page 18