A healthy slice of the profits from 22 wind turbines proposed for Fauch Hill in West Lothian will be shared by surrounding towns and villages – plus all the profits from an additional turbine that will be wholly owned by local residents.
The deal, agreed after long and hard negotiations, is reckoned to be one of the best ever won from a wind power developer, and could have major implications for other communities that are considering hosting wind farms in Scotland.
The 69-megawatt wind farm is being proposed by the Louis Dreyfus Group, a privately owned company founded in 1851 in Alsace, France. Two opinion polls have suggested that the farm is supported by around 60 per cent of local residents.
But the development has been opposed by some environmental groups, and was rejected by West Lothian Council in 2012. Last year it was the subject of a public inquiry, and is now awaiting a decision by Scottish ministers.
Local community groups, meanwhile, have negotiated payments from Dreyfus of £5,000 per megawatt per year, which is expected to amount to £8.25 million over the 25-year lifetime of the project. The company is putting an additional £330,000 into a fund to improve energy efficiency and boost broadband locally in compensation for disruption during construction.
Unusually, Dreyfus has agreed to let the community own one of the three-megawatt wind turbines for itself, and promised to loan the money to buy it on favourable terms. One conservative estimate says that the turbine could net more than £4.5 million over 25 years, though others suggest it could be two or three times that, depending on the future price of electricity.
Dreyfus has also promised to ensure that the wind farm can be used by walkers, horse-riders and cyclists. It’s planning a visitors’ centre, free parking and enhanced access to the neighbouring Pentland Hills Regional Park.
Stewart McKenna, who chairs one of the local groups, Kirknewton Community Development Trust, predicted that the social and environmental benefits to local people would be “enormous”. It was a hard-won victory that others could learn from, he said.
“Scotland's people and its renewable resources are two of our greatest assets,” he declared. “In combination they form a powerful positive force and will help to deliver a more resilient local democracy, better able to make decisions for itself.”
The Kirknewton trust tried for seven years to develop its own renewable energy project, but was forced to abandon the idea due to lack of capital and land. Without reliable funding “volunteers burn out in frustration and ideas are still born”, McKenna said.
So instead the community has driven a hard bargain with a foreign developer. “I cannot see how long-term, meaningful projects such as this can be delivered unless there is some form of partnership with a larger developer who is prepared to undertake the first and significant quantum of risk,” McKenna argued.
The community benefits package agreed for the Fauch Hill wind farm was praised as “excellent” by Dr Richard Dixon, the director of Friends of the Earth Scotland. “Locals have clearly bargained hard to get a good deal,” he said.
“Simple financial contributions are welcome, but we would like to see the community owning a part of every new renewable energy development. The proposal at Fauch Hill sets an important standard for all the big renewables developers.”
According to Deborah Chawner, director of Dreyfus’s Fauch Hill Sustainable Energy company, the project offered “the best package of community benefits”. It included “valuable suggestions that were made to us by local groups,” she said.
“If consented, this will represent a new model for community participation for communities hosting a wind farm in the future. In addition, all funds from both the cash element and the community turbine will be managed and distributed by local community development trusts, fully accountable vehicles with charitable status.”
Chawner was not aware of any other community wind power scheme in which the developer had offered to finance the purchase of a turbine with a low-interest loan for which the borrower was not personally liable. The Fauch Hill deal was a response to the Scottish government’s guidelines encouraging communities to take a share the ownership of wind farms, she said.
Scottish ministers have set a target for 500 megawatts of renewable energy to be owned by local communities by 2020. The aim is “to maximise the benefits for communities from renewable energy.”