Managing community funds


With more and more commercial renewable energy development throughout Scotland, there is a move to see
benefits going to the local communities most affected by these developments.

Local benefits from external privately owned renewables schemes can take several forms:

  • Community benefit payments – where the developer gives a lump sum or regular payment to the community
  • Part ownership of the renewable scheme – if the developer is keen to involve the community more directly in their scheme, they may offer the community low and no risk equity and profit shares as an alternative to benefit payments, and even the option of part ownership of their scheme (see Joint Ventures).
  • Opportunity for local individuals and businesses to buy a share of the development. Cooperatives share the profits from renewable energy developments with their members. Some cooperatives have higher dividends for members who are local to the wind farm and therefore this is additional benefit to the local area.
  • Some developers and local authorities view community benefit with a much broader definition than community benefit payments or local buy-in to a development.

The following are examples of typical benefits that are offered:

  • local contracts and jobs
  • improvements to local infrastructure (roads and access etc)
  • investment by the developer directly in a local community project e.g. play park or visitor attraction
  • local training, sponsorship or apprenticeships
  • staff or expertise provided for a community group for a specific project
  • data from a met mast or catchment data for a community hydro project
  • commercial developer using their buying powers to help source a wind turbine for a community project

These benefits should be written into any agreements for community benefit made between the community and developer.

Most private developers opt to provide local benefit through options 1 and 4, community benefit payments and broader benefits as these are seen as simpler than offering a community or local buy in to the project, and the private developer can retain full control of the development.

Community benefit payments are not mandatory in Scotland and therefore vary across developments. Payment levels are usually down to negotiations between the developer and the community. Some local authorities require a community benefit payment per Megawatt of installed capacity as part of the planning conditions for
commercial-scale renewable energy developments, e.g. Comhairle nan Eilean Siar. The Scottish Government has
set up a voluntary Register of community benefits from renewables, hosted by Local Energy Scotland, to
provide additional information to aid negotiations. Some agencies are keen to see these benefits going to the
wider community.

Commercial developers vary their approach to the management of community benefit funds although these tend to mirror the models for fund management mentioned earlier.

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