Scotland’s six offshore wind farms have paid just £150,000 to nearby communities in the last 12 months, it is revealed.
Holyrood Energy Minister Michael Matheson unveiled the figure in response to a written question from Scottish Labor MP Monica Lennon, who told The Ferret she was “amazed” by the “paltry” sum.
The Scottish Government is encouraging wind farm developers to make an annual payment to local areas impacted by the construction of a new project. This is paid directly to the community housing the turbines by the wind farm owner and used to support local projects.
The payments — known as community benefit funds — are often viewed as a form of compensation for the visual impact that wind farms have on the environment, as well as the disruption experienced by local residents during the construction and operation of the farm.
They are also seen as a way of ensuring that some of the wealth generated by Scotland’s energy resources is locally owned and used for the benefit of local people.
Scotland’s offshore wind farms – which are worth £889million – account for just 0.7 per cent of welfare payments, despite accounting for nearly 10 per cent of wind energy capacity.
Activists argued that the figures added to “overwhelming evidence” that Scotland’s offshore wind was being used “not for national benefit, much less for the benefit of coastal communities, but for the benefit of businesses”.
But the renewables sector told investigative journalists cooperative The Ferret that focusing on social services would do a disservice to “an industry poised to forever change the fortunes of Scottish coastal communities” by investing in supply chains.
Initiatives supported by non-profit funds include community hall renovations, friendship programs, continuing education grants, and energy efficiency programs.
In March 2022, as part of our ‘Priced Out’ series on the cost of living crisis, The Ferret and The Herald revealed that onshore wind farm owners were paying ‘small change’ to local communities when they were supposed to be producing over £3bn in that electricity Year.
However, payments from onshore wind power still dwarf payments from the offshore industry. An offshore wind farm could pay communities as little as £55 per installed megawatt each year.
The Scottish Government recommends that companies building onshore wind farms pay £5,000 annually to the local community per megawatt of energy generated.
It has not set a recommended annual rate for offshore projects. And this despite the fact that the Highland Council had already asked in 2016 to consider one.
Although payment of social benefits is voluntary, they have become an integral part of renewable energy projects. The Crown Estate – which manages the seabed on which wind farms are built – calls them “essential” if operators are to be seen as “good neighbors” to coastal cities.
They are also separate from monies paid to Crown Estate Scotland to lease parts of the seabed and from other supply chain benefits – such as employment – that come with the wind farm.
Scottish Labor MP Monica Lennon argued that the level of payments shows that Scottish wind farm owners “need to reset their moral compass and give communities what they deserve”.
Lennon said: “I am amazed to learn that a meager £150,000 was paid in community benefits from offshore wind farms last year.
“This is small change from an industry estimated to be worth almost £1billion a year. It is appalling that large energy companies are making staggering profits while many people are choosing between heating and eating.”
According to Robin McAlpine, head of strategic development at think tank Common Weal, the Scottish Government’s “overall strategy” on offshore wind energy for coastal communities has so far yielded no results.
McAlpine said: “There is quite overwhelming evidence that Scotland’s offshore wind power has not been used for national benefit, much less for the benefit of coastal communities, but for the benefit of businesses.
“The whole strategy is privately agreed by the Scottish Government, its agencies and corporate lobbyists and it is more than clear that if the Scottish Government has fought Scotland’s corner at all, it has done so in a regrettable manner.”
Scotland is poised for an offshore energy boom as it shifts 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 the ScotWind lease round in January are expected to deliver 25 gigawatts of offshore wind capacity. This is more than double Scotland’s current electricity needs.
However, debate rages on as to how best to maximize Scotland’s renewable potential.
ScotWind – which auctioned off parts of Scotland’s seabed for the construction of offshore wind farms – raised £700million for the country’s coffers. However, opposition politicians argued that the seabed was sold “cheaply” to multinational corporations with “questionable human rights records”.
Meanwhile, unions have expressed concern that too little is being done to ensure the jobs needed to manufacture and maintain the wind farms are kept in Scotland.
The firms that won the ScotWind auction have pledged to invest heavily in the Scottish supply chain. Many also pledged to pay more to local communities.
Charlotte Stamper, senior policy manager at industry body Scottish Renewables, argued that the “£20-30 billion in investment” being provided by the ScotWind projects “is poised to transform Scotland’s coastlines”.
“This investment will create tens of thousands of skilled jobs, enable Scottish companies to compete in the global offshore wind market and revitalize communities that currently rely on seasonal tourism,” she said.
“The majority of these offshore wind farms have already committed to providing some sort of voluntary community benefit, like onshore wind already does at £22million a year, but to focus on that when the price is so much bigger and wider – far reaching and longer lasting would do a disservice to an industry that is poised to forever change the fortunes of Scottish coastal communities.”
A Scottish Government spokesman pointed out that there are differences between onshore and offshore projects, “with many of the latter being far from shore and therefore having less interaction with communities”.
They added: “We will be updating our Good Practice Principles for Community Benefit from Offshore Renewable Energy Developments this year to ensure that the guidance remains relevant and valid for the operating conditions of the sector and that local communities continue to benefit from it offshore renewable energy in Scotland.
“We will continue to work closely with communities to deliver 2 GW of community and local energy by 2030 – more than double current levels – as part of our just transition to net zero.”