Scotland’s Just Transition Commission is set to call for the introduction of the statutory right for communities to receive a share in renewable energy projects.
Representatives of the commission are in Lerwick this morning (Tuesday) to launch a new report that pulls together Shetland’s experiences of the energy transition.
It says its findings, which are partly based on research work carried out by local energy consultancy Voar, could help shape fairer outcomes across the country.
“A mechanism for local communities, in the form of local councils or community-based associations, to purchase an appropriate share of a developer’s large scale renewable development should become the norm,” the report said.
The report’s key messages are
- Action is required to make sure local communities can make the most of new economic opportunities through community wealth building.
- Communities need to be able to own smaller-scale renewable energy development and have a share in revenues from big energy projects to create long-term community wealth.
- A new statutory right for communities to purchase a share of renewables developments will be key in building community wealth, especially in rural and island areas.
- A proportion of electricity grid capacity should be reserved for community energy projects.
- Community benefit funding from new developments has an important role to play, with proper scrutiny and accountability.
- Consistent and equitable compensatory mechanisms should be developed for those whose livelihoods are directly impinged upon by infrastructure development and other changes required for net zero.
- Restore trust between key groups working in the marine environment.
- Local climate strategies should apply just transition principles and monitor and evaluate progress towards delivering the required changes in the fairest way.
The commission said it would this week write to the Scottish Government, UK Government, energy regulator Ofgem and the Scottish National Investment Bank to highlight these key lessons.
The Just Transition Commission is an independent expert advisory group with members drawn from business, industry, trade unions, environmental and community groups and academia.
It says Shetland’s experience managing the development of oil and gas infrastructure at Sullom Voe from the 1970s, combined with the rapid expansion of wind energy over the past decade, “provides significant learnings for the whole country.”
Shetland’s local authority secured special powers through an act of the Westminster parliament in 1974 to allow it to negotiate more effectively with oil companies following the discovery of oil near Shetland.
This included an ability to act as a port authority, establishing a charitable trust and charging “disturbance payments” to reflect the environmental, social and economic impact of the oil industry on the local area. But it warns that action is required to manage the move away from fossil fuels.
“The current route for Shetland, as we move away from oil and gas through rapid expansion of clean energy, appears unlikely to sustain current levels of investment for meeting local needs, with a risk to the funding model for critical social infrastructure across a rural island setting community striving to support an ageing population, retain young people and attract new residents,” the report said.
The commission’s co-chair Satwat Rehman said: “Speaking to people in Shetland, we have seen again how a striking feature of the climate transition is the way that exciting new renewable energy projects sit alongside people that are struggling to pay for basic needs, and communities with concerns about the long-term sustainability of local economies.
“Our message today as a commission is that there is more that government can do to support communities and local authorities in navigating the big changes underway across the country.
“Shetland teaches us that with the right powers and enough capacity, local communities are best placed to build long-term, shared prosperity and tackle inequalities.”
Tom Wills, director at Voar and co-author of the research report, added: “A fair energy transition fair means retaining a fair share of resource value. Our research has explored the opportunities and barriers to greater community ownership, participation and benefit from energy projects.
“As new energy developments accelerate, we have found that government at all levels – UK, Scottish and local – could be doing more to ensure communities are not left behind.”
