There is a notion around these parts, indeed any part of the Highlands and Islands (and wider Scotland?) destined to be ‘home’ to multi-billion pound investment by the renewables industry, that significant local benefit is a ‘given’.
The fact that nothing could be further from the truth is what gives objectors the traction that they need to attempt to disrupt, and rightly so.
For any significant, long-term benefit to be forthcoming; negotiation is crucial.
That so very little is contractually obliged to be derived, contrasts so very greatly with the bounty enshrined in legislation by Iain Clark and Shetland Council in 1973.
The Ways and Means committee of the House of Commons decided that the Shetland Bill raised issues of such importance that it would have to go through a full parliamentary process.
The powers sought by Shetland over the oil industry were exceptional.
Critically, these included compulsory purchase of all relevant land and allowing the council to act as port authority and thereby concentrate oil coming ashore at a single, multi-user terminal at Sullom Voe.
Jo Grimond was the sitting MP at the time and opened the second reading debate by saying that the bill “may well point the way to better methods of controlling developments consequent upon oil discoveries in other parts of Britain”.
As far as Shetland was concerned, “the impact of oil on a rather unique island community will not go on forever and may be over after 50 years … We must not sacrifice the long-term future of the community.”
Are there any bells ringing yet?
The ‘noise’, particularly here in Lewis where we have three major onshore wind farms in the offing and two offshore, while very relevant, has been more of a distraction than major concern for the actual progress of the developments.
‘Government’ has decided that the future is green and, while we have some of the best wind in Europe on our doorstep, necessarily we ‘must’ be home to the country’s renewables future.
That this has pretty much been decided, a forgone conclusion even, might come as a surprise to some who think they can still influence the ‘direction of travel’.
We need to accept the facts as they are and get on with it.
‘It’ being holding the feet of every developer to the fire for maximum community payback.
Here in the Western Isles, Comhairle nan Eilean Siar is stuck in the middle of the whole argument on how to best progress for the benefit of all.
Realistically, they are only the planning authority and have no actual powers to extract any tariffs from any potential developers.
In the offshore space, there is no legislative requirement for community benefit.
Neither Crown Estate Scotland, in awarding leases, nor Marine Scotland, in consenting wind farms, require any community benefit.
It is left to the local authority and the local community to negotiate whatever benefit they can secure from developers.
It is to the credit of the Comhairle and the community estates on the west side of Lewis that, in a legislative vacuum where any contribution from developers is entirely voluntary, they have secured a commitment from Northland Power for a total of £158 million to be paid to these estates over the lifetime of the Spiorad na Mara Wind Farm.
Follow Shetland’s example and invest this money wisely and the sum could double.
This is why, as currently enshrined in law, they can only dream of extracting, as one local councillor naively put it, ‘casino-type community payback’.
A one-off windfall is NOT what is required (unless it’s eye-wateringly meaningful).
Casinos thrive on being able to handle the mug punters who they placate very irregularly indeed.
As far as the onshore developers are concerned there are obligations for ‘local content’ in the Section 75 Legal Agreement and all three (Uisinis, LWP and Druim Leathann) are committed to £5,000 per MW ScotGov Guidance figure.
That’s correct: just £5,000.
Uisinis at 200Mw p/a will yield just £1 million a year, ditto LWP.
Druim Leathann despite being a quarter of the size are offering benefit to the community of £7,000 per MW increasing to £10,000 per MW in year 13, in addition to regular land rentals.
The precise destination of this funding is not yet defined and routing it directly to the Comhairle, given State Aid restrictions, public perception etc, may well be problematic.
Remember though that this was agreed 10 years ago and that, had it been index-linked, it should now be around £7.5K per Mw.
Factor in the £760 million of licence fees that have been harvested by Edinburgh already for offshore licences with not one penny going to the impacted areas, and you can see how, without dramatic intervention/skilled negotiation, there would, realistically as far as the statutes are concerned, be just a pittance being derived.
This is where negotiations, both with the developers and SG need to pick up the pace, and soon.
The cost to the comhairle in extra planning effort is going to be immense.
The recognition by the developers that there must be a reasonable, ongoing, locally sustainable and regularly renewing fund is a ‘given’.
They’re not daft.
They recognise that they need to bring the affected communities with them.
But, I for one, am at a loss as to understand the government’s complete lack of a ‘position’, other than as a (substantial) rent collector, on any of this.
This is, after all, to better help with GB’s ‘energy security’ (despite the entire investment coming from foreign countries).
They could have attached ‘proper’ conditions to the licences to better empower local authorities.
Certainly they could have foreseen the difficulties that this massive investment would visit upon the comhairle and its ability to cope with the planning aspect alone.
Commentators on social media have mentioned that we (local councillors) will be distracted by ‘shiny things’ and that we will fall for any ‘smoke and mirrors’ trick deployed by the big companies.
This ‘them and us’ nonsense needs to stop.
I’m still unsure as to how I became an idiot merely by winning a ballot.
If, as the public perceives, this is simply a game of high-stakes poker; then we have been dealt a weak hand.
Luckily the comhairle have had some seasoned ‘poker players’ around the table for the past 20 years.
Without them we would never have had an interconnector to the mainland which makes all these projects possible, and for the extra capacity to enable new community turbine schemes to join Point & Sandwick Power, Horshader, Galson & Tolsta Trusts to benefit, directly, their local communities.
They’ve been heavily involved in the development at the Stornoway Port Authority where an ‘Energy Hub’ at Arnish will tease out the possibilities for any derived industries to be successful.
They, in conjunction with Stornoway Trust, also had the foresight to take advantage of the offer of a 20 per cent stake in both Uisinis and LWP (Stornoway) windfarms, risk-free.
All the development costs have been sunk by the developer and the comhairle are, in effect, inheriting their Contract for Difference.
As one officer put it ‘you can’t put a price on that’.
Surely decent sums of money and not including benefit from SSEN, Magnora (the other offshore developer) and Tolsta.
The next ‘pot’ from Northland (and remember the comhairle played a major part in their negotiations with the estates) will have to go into a central pot.
All revenues derived from this ‘pot’ must go to benefit the wider Western Isles.
The Shetland Fund was live from 1978 to 2000 and their total gross income was £83 million, albeit boosted to nearly £400 million at today’s values by prudent investment.
Also they were, like every other local authority at the time, being adequately funded from central government and not having to dip into their investments.
It is predicted that between 2023-26 they will have a funding shortfall of £106 million.
Luckily ‘prudence’ will help them overcome any difficulties in the short term.
For us, there are very obvious issues on the horizon with regard to ferry/transportation capacity and the knock-on effects on tourism, accommodating, indeed housing, a large workforce, the degradation of our existing infrastructure (in the short-term) and ‘managing’ the whole project in its myriad strands to completion.
I think of them more as opportunities than issues.
If this isn’t our ‘Shetland’ moment then when will be?
It may well be our only chance to derive meaningful, transformative, benefits for generations to come.
So, are we in a position of ‘bounty’, or are we just looking for a ‘plug’ to fund a government funding gap?
The answer surely has to be a bit of both.