46: Community benefit from offshore wind
The UK Government has committed to installing 50GW of offshore wind energy by 2030. How feasible is that as a target, and what can be done to ensure there is a community benefit? Fraser, Becky and (newly minted Professor!) Matt are joined by Grace Millman, Energy Analyst at Regen, and Dr Claire Haggett, Senior Lecturer of Sustainability at the University of Edinburgh.
Find us at www.localzeropod.com
Essential reading:
https://www.gov.uk/government/news/new-plans-to-make-uk-world-leader-in-green-energy
https://www.placenorthwest.co.uk/plans-in-for-offshore-wind-farm-that-could-power-500000-homes/
Episode transcript
[Intro music]
Rebecca: Hi, Local Zero, this is Becky and Fraser and we’re just interrupting the show for a minute to tell you about some breaking news that’s happened since recording the main part of today’s episode. Fraser?
Fraser: Yeah, we are afraid to say that we are no longer joined by Dr Matt Hannon. Why is that Becky?
Rebecca: That is because he is no longer Dr Matt Hannon. He is now Professor Matt Hannon! [Laughter]. Congrats Matt!
Fraser: Congratulations. He has seemed like a professor for a lot longer, right? That guy was born with elbow patches.
Rebecca: Yeah, I think so [laughter] and the cap. Don’t forget the cap [laughter].
Fraser: We’re only joking [laughter].
Rebecca: You finally have the title that matches your personality and we couldn’t be happier for you. We are absolutely stoked. But enough that! On with the show and just to say, Matt, we do expect a lot more from you in the future. Now you’re a professor, we are expecting you to take the conversation to the next level [laughter]. Right now, back to the episode.
[Music flourish]
‘There will always be issues in a particular context, so there will be stories in every location and trying to understand those stories, trying to understand value and meaning in those places is absolutely a way of bringing communities along on this great adventure in developing clean, green, renewable energy that could create so much potential for the country.’
‘They could see the port redevelopment and supply chain redevelopment around that area to be able to create these offshore wind projects which isn’t just a one-off payment or a compensation. It is a long-term, sustainable industry that you’re building and you’re providing a future for many people who have lost that.’
[Music flourish]
Fraser: Hello, and welcome to Local Zero with Fraser, Matt and Becky. Your go-to for local action to tackle the climate crisis. This week’s episode is about offshore wind; more specifically, the UK government’s plans to have 50GWs installed by 2030 and what that means for local areas and communities.
Matthew: Yeah, so joining us today is Dr Claire Haggett, Senior Lecturer of Sustainability at the University of Edinburgh and we’re also joined by Grace Millman, an energy analyst and colleague of Fraser’s at Regen. So together, we’ll be chatting about the impact of offshore wind, the potential benefits for local communities and what we need to do to involve them.
Rebecca: And if you haven’t already, do go find and follow us @LocalZeroPod on Twitter to get involved with discussions there and if you can’t constrain your thoughts to just a few characters, do email us at LocalZeroPod@gmail.com. We love hearing from you and today, we want to give a big shoutout to James Kerr for his lovely tweet about how much he enjoyed our recent Shifting and Flexing Home Energy Demand episode. Thanks, James.
Matthew: Yes, and thanks also to tweeter @LilyMWrites. In our flight-free episode, we were talking about air mile reward schemes that encourage people to fly even when we don’t need to. We wondered why train companies don’t offer something similar. Lily kept us right saying, ‘Some do,’ and she highlighted LNER as being one that does. She was also saying about getting the train from Edinburgh to Côte d'Azur this summer. Great effort! Hope you enjoy the trip.
[Music flourish]
Rebecca: Well, I wish I was going on a trip to Côte d'Azur [laughter] but before we get into the episode, maybe we should start by saying we actually are going on holiday; not altogether. That would be a bit much I think [laughter].
Matthew: Yeah, a little much [laughter]. I mean I’m up for it but…
Fraser: If anything, we’re going on holiday from each other [laughter].
Rebecca: We need the break. Get me away! [Laughter].
Matthew: I’ll have to let the family down gently. ‘You know we were going on a summer holiday. Well… [laughter] change of plan.’
Rebecca: No, we are going away and so you will have to have a slight pause from the Local Zero love in July whilst the three of us take time to swan off to lovely vacations that we’re all going on for a bit of a break… but we still have a fantastic episode ahead of us today, don’t we, Fraser?
Fraser: We do. It’s a big, big episode. So today, we’re talking specifically about offshore wind and the big sort of revolution that we’re undergoing just now to maximize the potential of that in the UK. Now intuitively, you might not think offshore wind has anything to do with being local but, of course, wherever offshore wind is, there are huge economic opportunities and social opportunities. There’s supply chain and community benefit attached to that. So in this episode, we really want to think about how can communities and local areas benefit from offshore wind. What are the opportunities for them to participate in the governance of it? Is there opportunity for ownership and how might that look? How do we go about unlocking that? So I think it’s a big, big conversation.
Matthew: Yeah, it’s a massive growth area. There’s a recent upgraded ambition for offshore wind from originally 40GWs to 50GWs. What does that mean? Well, we’re roughly at about 10GWs at the moment in the UK. So looking out from today, 2022, to 2030 in eight years and looking to scale this up from about 10-50GWs which is a factor of five which is massive. In Scotland alone, the recent ScotWind leasing round leased a pipeline of about 25GWs which is a phenomenal amount.
Rebecca: It’s huge!
Matthew: Yeah, huge. So the question is what does that mean for the country? What does that mean for the region and local communities? This topic, whilst we’ll talk a bit about Scotland and the UK, is relevant to anywhere worldwide really about communities and offshore wind.
Rebecca: Coastal communities and offshore wind, right? [Laughter]
Matthew: Well, that’s a good point, Becky. Should an offshore wind project focus benefits for coastal communities? Obviously, there are wider benefits across the system and if you’re delivering offshore wind, which is cheap nowadays, you can make much cheaper and cleaner power, there are externalised and socialised benefits to this but what happens to those communities who are looking at these things day in and day out and are part and parcel of that?
Rebecca: I’d be surprised, Matt, if you haven’t got a nice, pretty graph showing us where all the offshore wind is in the UK. Am I right? Am I on the money? Have you done your homework? [Laughter]
Matthew: Not per se, Becky [laughter] but I’ve done a bit of sleuthing or at least I’ve read some good sleuthing. Well, we’ll defer to the experts who are going to give us more on this but the community benefit for offshore wind is a real nascent subject. There’s not really much in the way of guidance around this and so offshore wind developers kind of do what they want to do. I quote from an interesting paper I’ve read recently from academic Oxford Brookes, Glasson – ‘To get a social licence to operate, what amount of money do we need to provide communities per megawatt installed per annum to gain that social licence?’ It varies but typically, offshore wind, much less than onshore wind… with onshore wind, the standard is around £5,000 per megawatt per year. Offshore wind is much less. We’re seeing regularly from as little as £500 up to about £2,000 per megawatt per year, so it’s less than onshore. Does it need a smaller licence to operate?
Fraser: Well, this is the thing is when you start accounting for the scale, it’s still a massive amount of money that’s coming in. The important thing here though, and it’s the same with offshore even in Scotland and in Wales, although Wales is making inroads on this in policy just now, is it’s not mandated. That £5,000 for onshore per megawatt currently is just the standard and that’s the accepted sort of practice but actually, the amount of money that an offshore array is going to be generating for the developers specifically is utterly, utterly enormous. If you think the use that could be going to within local communities and even to local authorities on the proviso that it maybe goes back and the community benefit, that’s transformational amounts of money, even if you just double that £5,000, for argument’s sake. So I think that social licence thing is such an important question.
Rebecca: It is. It really fascinates me though because [laughter] I remember when you first proposed that we do an episode on this, Fraser, and I was just thinking, ‘I can’t see how offshore wind and the concept of communities come together.’ You can really see it for onshore wind and other small-scale renewables. Was it in the last episode or a couple of episodes previously? We’ve talked about the Octopus fan club and was it Ripple Energy? You feel connected to that generation resource because it literally is in your backyard. Whereas, this just feels so far removed that I think sometimes it’s a little hard to bring those concepts together.
Matthew: There’s another key element to this is that it’s much easier, although still very difficult, particularly if you live in England. It’s much harder for a community to coordinate and galvanise themselves to deliver an offshore wind project which is extremely complicated and extremely costly but it is possible for them to do it around onshore wind, especially in areas where there is support for this like Scotland. As you say, in terms of that disconnect, Becky, it’s not just a kind of physical or emotional disconnect but in terms of an ownership and governance disconnect, these committees don’t really have a way into these offshore wind projects. Now maybe there is a way. Could we have shared ownership? Could we have models like Ripple Energy where you crowdsource funds from people across the country to deliver part of an offshore wind project?
Fraser: This is something that we’re seeing trialled by Energy4All and Falck, who is one of the big winners out of the Crown Estate Scotland - the ScotWind leasing round – are currently exploring that and asking, ‘How can we raise the money to make maybe 10% of this installation cooperatively owned?’ You also have situations for onshore, granted, like in North Ayrshire where the council stumped up the money to take ownership that goes back into the community that way. So maybe we think less about community energy groups as we understand them as small groups of dedicated volunteers trying to erect a single wind turbine and maybe we need to think more about local enterprise partnerships. Maybe we’re thinking about conglomerates of community energy groups or maybe, like we say, Ripple Energy and Energy4All, these bigger-scale cooperative-style organisations to pull it together. It’s a lot of money you need.
Matthew: There’s a very interesting piece of research that came out last year I think it was from Aquaterra and it asked the question of how much (in terms of money) benefit do communities get from a privately-owned wind farm that makes community benefit payments into a pot versus a community-owned wind farm? Based on their analysis, it would be 34 times the monetary benefit from the community-owned versus the privately-owned. Let’s put some flesh on the bones of an actual project here. There was a project in Orkney where it is just shy of one megawatt at 0.9MWs and each year, it provides almost £300,000 from that turbine which is about a megawatt to that community. Over the course of 25 years, that’s nearly £7 million [laughter]. How many energy bills is that for the community? I mean that’s really getting down to brass tacks now. This is a core issue in the context of an energy crisis.
Rebecca: It is and with that, I think it’s probably time to bring in our guests.
Matthew: Sweet.
[Music flourish]
Claire: Hello there, my name is Claire Haggett and I’m a senior lecturer in sociology and sustainability at the University of Edinburgh. For the last 20 years, I’ve been researching public responses to renewable energy developments.
Grace: My name is Grace Millman. I’m an energy analyst at Regen, a not-for-profit organisation whose mission is to transform the energy system for a zero carbon future.
Matthew: Welcome, Claire and Grace, on to this fascinating episode. We’re very excited to have you along and to talk about this big and very, very live issue about community benefits and impacts of offshore wind. Now first things first, for our listeners, some people will be familiar with the difference between offshore energy, offshore wind and onshore energy and onshore wind but just for the avoidance of doubt, when we say offshore and onshore energy, what exactly do we mean? So Claire, could we possibly begin with you and then I’ll turn to Grace?
Claire: Sure. Thanks, Matt, and I agree. I think this topic is absolutely fascinating. There are some differences between on and offshore renewables. With offshore, we have wind farms all around the coast of the UK. In fact, the UK is a world leader in the generation of offshore wind energy. There are demonstration test projects in the water as well for wave and tidal energy. What’s interesting is that some of the issues that have occurred with onshore wind are very similar offshore as well. So it’s very easy, perhaps, to think of offshore energy projects and offshore wind projects as being out of sight and out of mind and as being quite different but we know that a lot of the same issues that occur onshore occur offshore too. So they are issues around visual impact and issues around a disjuncture between the national or international benefits that renewable energy brings and the impact locally. Also, there are issues around process and the way in which projects are developed. So issues around impact, benefits and process are pretty similar for onshore and offshore wind.
Matthew: And Grace, do you see any other key differences between the two or are we kind of dealing with a homogenous group of energies here?
Grace: I think the main difference is really the scale. Obviously, when we’re developing onshore, we have a constraint because of land and because of the other uses of that land, primarily for housing and development in our own lives. So when we go offshore, we actually have a lot larger area that we can develop in and now as well with the introduction of floating offshore wind, which can operate in deeper seabeds, you can go further and further offshore and still be generating. But as Claire said, you have a lot of the same issues because at the end of the day, that offshore energy is going to need to connect onshore somewhere. So there are similar issues that onshore wind faces that are faced by offshore as well but on a much larger scale because we are talking about gigawatts and potentially, many, many gigawatts offshore.
Rebecca: That brings us to a couple of really important points that I want to dig into a bit further. You talked about scale. The words ‘scale’ and the word ‘local’ have just come up a few times and I think this is really, really important. On the one hand, we’re talking about scale and the huge amount of offshore that we might be able to build maybe... but how realistic is it? We’ll dig into that but also this concept of scale when we’re thinking about local. EnergyREV is the research consortium that supports Local Zero and some of our researchers have been looking at what local means. I think these words are all words that we use all the time but we possibly are using them with different mental models behind them. Certainly, in the projects that we’ve seen that are onshore – they’re not necessarily onshore wind but they are certainly land-based projects – the word ‘local’ has been used very pragmatically [laughter]. It grows and it shrinks. So I think maybe let’s dive into both of those first. Let’s start with the scale of the wind and then maybe the scale of local [laughter]. So with the scale of the wind, I mean are some of these new targets realistic? Can we achieve the amount of wind that we want to deploy by 2030? Is this realistic? Can we make 50GWs? Yeah, it’s huge! Is it realistic? Grace, you were talking about some of those challenges and the scales. Is it realistic? Can we meet that?
Grace: Well, as an energy analyst, I had to come with some numbers because that’s how my mind works [laughter]. As you said, Matt, the target is for 50GWs of offshore wind by 2030. To put that in context, we’re currently at 11.3GWs operational around the UK. I think the issue here is not around the pipeline. In the pipeline, we have 9GWs under construction of offshore wind. The Scottish Crown Estate has just granted seabed rights to 25GWs of fixed and floating offshore wind around Scotland and we have the potential for a 4GW leasing round in the Celtic Sea. So add that all together and you get 50GWs. Great! That’s not the issue. The issue is developing that and the rate of development needed. So to get to 50GWs by 2030, that would mean 4GWs of deployment a year and we currently hit about 1.2GWs of deployment a year. That is the issue. It’s not that the developers aren’t there, or the projects aren’t there, or the feasible areas aren’t there. It’s the fact that we need to deliver at a rate that we haven’t delivered at before and how do we actually scale up our supply chains? How do we get our ports ready for that? How is our grid ready for that? That’s where the question of feasibility comes in. On the positive side of that, hopefully, that’s all fixable with good strategies and good investment. From a theoretical point of view, yes, we can achieve that but it would require rates of deployment not seen within that industry. That’s the big question.
Rebecca: So Claire, is there where local meets scale as you start to think about deployment? Is that one way to think about it?
Claire: I think you’re absolutely right, Becky, that there’s something very interesting about how local and how community is defined when we’re thinking about offshore energy projects. Sometimes, as Grace has said, these will be floating wind projects and so these will be a long way offshore. Community is one of those very vague, and nebulous, and slippery sort of terms. It can mean everything and nothing. In this sort of context, it’s interesting how it is differently used. For example, if we’re thinking about who is the local community from an offshore wind farm, there are different ways that that term has been defined or understood. If we’re thinking about offshore wind farms as harnessing a great, national, natural resource and so harnessing something that is of great benefit, then that community is sometimes defined very broadly. It could even be the whole country or it could be a wide region. If we’re thinking about those who might be affected by the development of offshore projects, so people on land who perhaps have sight of it or whose activities are in some way influenced by it, then that’s a more specific community. Sometimes we’re thinking actually very specifically about a host community, so those locations in which the onshore cabling or the onshore substation is located. That’s a very particular and very geographically specific understanding of a community. In this field, we see all of these being used and sometimes at the same time. Community meeting scale happens in different ways and in different contexts.
Fraser: So Grace, this is something that you’ve dug into a little bit in terms of communities that are impacted in terms of the local area and what that means. Broadly defined, what has offshore energy meant for local areas, and for host communities and for people close to those developments so far?
Grace: I think from a nebulous point of view, I’m kind of like, ‘Oh yeah, offshore wind is great for everyone because it means we reach net zero.’ [Laughter] I’d love to think that it has a lot of benefits for everyone but from a very tangible perspective around what is that actually giving back, there has been a lot of commitment by developers in offshore wind to either fund specific projects, so funding school programmes, university programmes and the building of schools in local areas or a kind of consistent per annum fee that they donate to a local area. That’s up to them to use in the way that benefits them most. There has also been some focus on fuel poverty and helping to alleviate that from different developers. However, I think the key thing here is it is a voluntary thing in the UK right now and it is up to the developer. There isn’t any favourable treatment for developers that do it. That is the issue. When do make profits and you actually start thinking about benefits in the community and the impact of your development?
Matthew: I’m going to be annoying actually [laughter]...
Rebecca: You, Matt? Never [laughter].
Fraser: For a change [laughter].
Matthew: Claire is asking a really important question there about what we define as community and Grace, you’re quite rightly talking about directly the benefits that these communities may enjoy. Claire, with some of the research you’ve undertaken, you’ve spent quite a lot of time asking the question not only what do we mean by community but what do we mean by impact and what do we mean by benefit? So I wondered whether you could offer a bit of insight into where the boundaries are around this. What are we classifying as an impact and also what are we classifying as a benefit?
Claire: Yeah, that’s a really good question, Matt. We think that those three things are absolutely related to each other. How do you define a community? How do you define a benefit? How do you understand the impact that might come from any particular project? You might think of the impact as being very positive and that clean energy is a good thing, so hosting projects is a positive thing and, therefore, you’re spreading the benefits widely that come from this positive project. That’s a very wide definition of a community. If the impacts are perceived to be more negative and that there is something that might be lost, then benefit becomes about trying to rebalance or redress that and trying to invest in communities to try and support them. If it’s thinking about benefit and impact more narrowly and a more narrow definition of community, that’s when we’re thinking about being a good neighbour and demonstrating good corporate social responsibility to those communities who are hosting cabling or onshore substation sites. You’re trying to say something, Matt. I’m going to stop talking so you can get a word in.
Matthew: Well, no, I’m just fascinated by what you’re saying. I think often these community benefit payments, I hear, rightly or wrongly, people with a slip of the tongue possibly referring to these as compensation benefits. Now when you see an offshore wind project at sea, I’m immediately looking at that and thinking, ‘Well, somebody has got to look after that. There are operations of maintenance. There was a lot of work that went in in terms of commissioning this and the environmental impact assessments and then there’s work that needs to be done at the end of this.’ There are jobs. There is an economy and a whole industrial complex around this. So do we need benefit payments? Are they not creating a benefit already?
Grace: Yes, I think Claire is right to say there is always going to be a community that’s directly impacted. So, for example, you look at the cable laying route; there are going to fields that are dug up to lay that cable and, therefore, there is an element there that the people who have complied, helped and supported that project by allowing that cable route should have some kind of compensation to say thank you and to mitigate that impact. When that’s seen as the only benefit, it has to be a financial benefit. Actually, what we need are sustainable benefits and that comes, as you said, from jobs. That comes from the supply chain. That comes from GBA in the area and it comes from prosperity in areas that potentially have been quite hard hit because a lot of these places where you’re going to be landing are coastal communities and potentially industrial communities. If we look at South Wales, where a lot of offshore wind projects could come online, they’re going to face a real challenge with the shift away from fossil fuels. That’s where a lot of their industries are and they’ve already been impacted by that. They could see the port redevelopment and supply chain redevelopment around that area to be able to create these offshore wind projects which isn’t just a one-off payment or a compensation. It is a long-term, sustainable industry that you’re building and you’re providing a future for many people who have lost that.
Matthew: Claire, do you share the same view or something different?
Claire: I do and I think it’s very interesting, Matt, that you mentioned compensation. You’re right that very often, that is a slip of the tongue because the sorts of benefits that we’re talking about here are not compensatory benefits, for example, that sometimes are paid to the fishing industry. We’re talking about very different sorts of benefits here and benefits in terms of a just transition whereby there are fair processes and that the benefits of moving to a just transition are spread widely and are available. We’re thinking about energy justice where we have distributive justice that communities can benefit and should benefit from this move towards low carbon technologies. What’s really interesting is that research very strongly finds that communities can’t be bought and that thinking about benefits and thinking about paying into local communities funds and so on doesn’t necessarily buy support from the local community for that project because that assumes that the landscape or the seascape has a price on it. It assumes that people put a price on what might be happening around them. Research very strongly finds that benefits are appropriate and only appropriate when they’re part of a bigger and ongoing commitment from developers to local communities and as part of a fair process.
Matthew: Yeah, and I’m not going to ask the next question because Becky’s going to come in but your point about not being able to buy communities reminds me of a summer holiday I had about three years ago. I won’t name the place but I had the conversation with the person in the community hub which was paid for by community benefit funds from an onshore wind farm we could both see it and we were talking about it. They were very angry about the construction of it whilst they were sitting there having a coffee in the committee hub paid for by it, so I hear you.
Grace: It’s interesting actually, Matt. I know someone who lives on the North Devon coast and he got his house very cheaply because it overlooks an offshore wind farm and he works in energy, so he absolutely adores it. He is so thankful to the person that built that offshore wind farm because he got his house cheap because the previous owners thought it was an eyesore. It’s about who values what and there’s also a societal shift that’s hopefully happening where these developments are not seen as ugly, intrusive or an eyesore but they’re seen as a remarkable reflection of what we’re achieving and what we’re working towards and our shift away from fossil fuels. The thing is that, unfortunately, forms a small percentage of people at the moment. We shouldn’t be looking to buy those people but we should be looking to bring them along on that transition to be able to see the value in these projects.
Rebecca: I think this is a fascinating point and I want to reflect on some of the language and the language of complied and compensated is very different from a language around participating, engaged and co-creating. If I think about the things that I value [laughter], I always bring things back to what my kids do because it’s pretty much what my life revolves around right now [laughter] but if you presented me with a terrible piece of splodged artwork, I would not value it at all. The fact that it’s something that I made with my children means that I value it so deeply because there’s something more than just what I’m seeing. I wonder if the way in which the narrative is being framed and in which these projects are being developed is not lending itself particularly well to creating that value. Claire, you talked about distributive justice but actually, is there another way forward where communities can be actually engaged far more in the process and shift the entire narrative on this?
Claire: I think so. I think you’re absolutely right and I think that what Grace said about bringing communities along with us is absolutely the way forward here. I think that comes about from trying to understand the places in which these projects are being planned. Research very clearly finds that there will always be issues in a particular context. The issues themselves will be different but there always will be something and it will be that particular context which gives meaning, value and attachment to that particular place, so the story behind the place or the story behind that splodged artwork. So there will be stories in every location and trying to understand those stories and trying to understand value and meaning in those places is absolutely a way of bringing people along with us and bringing communities along on this great adventure in developing clean, green, renewable energy that could create so much potential for the country. So I think that you’re absolutely right to be thinking about why we value these places and that’s a big part of moving forward.
Grace: I think there are some really good examples of that actually already happening. This is where it goes beyond just a payment or anything like that. Blue Gem Wind, who is a floating offshore wind developer, are doing a big initiative at the moment with schools. They have created an educational pack about floating offshore wind. They go into schools to talk about it. They started a competition for the children to name their next floating offshore wind project and they’re doing that for all their projects going forward. What that means is those children go home and they say, ‘Oh my god, floating offshore wind. Have you heard about it? Let’s talk about it. It’s going to happen off our coast,’ and it becomes an exciting conversation to have rather than it being something that’s happened to them but something that they feel that they understand a bit more and that they can be excited about. These children are then seeing careers in this in the future and they could be a floating offshore project managers. They could be developers. I’m not sure if any of those are careers that children might be excited by but they could work in this awesome floating offshore wind. I think, where developers have much more of a responsibility to the community and responsibility to the sector to do that and bring people along rather than, as you’re saying Claire, compensation or buying people is completely the wrong language.
[Music flourish]
Fraser: We’re talking a lot about what developers are giving and what are we willing to accept from developers. Everything seems to be in this conversation about the developers’ gift to give. Should we be talking about shared ownership? Should we be talking about different structures of governance here and not just participation and not just benefits but an actual ownership stake at a local level, whether that’s community or local authority? Is this another conversation we need to have?
Claire: I think that’s a really good question. Shared ownership necessitates engagement. It necessitates a partnership. If you are a community that has a stake in an offshore wind farm, then you have to be working in partnership along with a developer. So in principle, it’s a great idea and it could really help to build on exactly the sorts of things about which Grace has been talking about; really exciting and (pun intended) energising communities and really getting them excited about these projects. You can probably hear that there’s a but coming and that’s about the difficulties of arranging shared ownership. So for smaller more local onshore projects, it’s fairly complicated already. It’s difficult for communities to raise finance. There’s a lot of time, commitment and skills needed by community members to engage effectively in this sort of process. There are similar issues that you’ve been talking about in this series during the podcast on green-led about the way in which sometimes it’s not people who live in a community who are buying into environmental projects that are located there. There are a lot of issues not just specific to on or offshore wind but are relevant when we’re thinking about shared ownership. So in principle, it’s a great idea but the details are a bit tricky.
Matthew: Can I ask a question about how community benefit payments are currently governed? I know there are big chunks of money from onshore wind but less per megawatt per annum from offshore wind and not quite as lucrative for communities as it stands but that may change. How are these funds actually managed and could that be a way of bringing a little bit more in the way of social justice and distributive and procedural justice so that it’s a fair distribution of benefits but also fair distribution of power and agency? Who wants to hop in but whether you’ve got the familiarity with how these schemes actually work?
Grace: There are no government requirements of them and so from that perspective, any management of them is through the developer and community group itself rather than it being something that has a regulator to make sure that this is being used in the right way or being operated in the right way. From my understanding, and do correct me if I’m wrong, Claire, please do, [laughter] is you end up with a bit of a community energy bond. It kind of goes into that and then that’s why it’s protected. They then have the access to that and they can spend it on the things that they need to. Fraser?
Fraser: No, I was going to come in on the back of that, Grace, and, of course, shameless self-promotion but you and I worked on a little bit around this, although you did most of it but in terms of some of the ways that that can look, and I don’t mean to nudge in as a guest here now Matt, but some of the ways that can work... so the traditional community benefit fund but also what we’ve seen in places like, like we’ve mentioned on the show before, North Ayrshire where they generate from renewables owned by the local authority which then goes into a community benefit fund or specifically, a community wealth building fund. So there are different ways to own, receive and manage that money. I think maybe this is where we think about skills. Grace or Claire, I don’t know if you’ve seen any interesting examples or maybe heard of some in the pipeline that are maybe more feasible for the bigger scale that we have to work at for offshore?
Claire: Sure. It’s really interesting because there are a variety of different ways in which schemes are already administered. Sometimes, it’s an independent organisation that has a grant distribution remit. Sometimes, it’s a voluntary community organisation. Sometimes, it’s a local authority. So it tends to vary according to the place in which a particular project is planned and what the local governance might happen to be there. So there’s a large umbrella organisation that runs across Scotland that deals with a lot of these but just in Scotland obviously. So it tends to vary a lot and there isn’t a set way in which funds are administered. There’s not a set way that the governance exists around these sorts of funds. As Grace mentioned earlier, there are lots of different sorts of funds too. Sometimes, it’s a pot which is held by an independent organisation and community groups put in applications. Sometimes, projects are directly funded. So there’s a great deal of variability at the moment and I think that flexibility is probably helpful. There’s less guidance in place for benefits from offshore wind and I think that’s probably a useful thing bearing in mind the state of the industry and that things are not as well developed as they are onshore. So variability, in this sense, is probably good.
Grace: There is a good example of how it’s working in offshore wind though. So Ørsted has some offshore wind farms off the east coast and the way that they do it is they put into this fund and then that’s controlled or managed by an independent company and that kind of acts a bit like regulation. In terms of what you’re saying, Claire, about the decision-making about how those funds are spent, the way they do it is they have a kind of an advisory board of local stakeholders, campaigners and community council groups and they’re the ones that make those decisions on how it ends up being used which seems like quite a nice democratic way of doing it.
Matthew: We’re talking about the significance of the money even for offshore wind, so your point about Ørsted, if I’m right in saying, they’ve got three community benefit funds from offshore wind and £6 million delivered to 442 projects. So Claire’s point there about how this is governed and how this is distributed is massive because you could have three different governance and distribution models for the money going into completely different types of projects and a completely different size or number of projects as well and so it really matters about the design of these.
Claire: It does and I think it’s really interesting because with the Ørsted pot, local communities were asked about the priorities that they had for funding for three different pots and three different communities and they all voted for different things as being a priority. So it might well be that actually, keeping things local, and specific and addressing what local communities identify as their priorities and their need is the most appropriate way forward.
Rebecca: I want to bring us back to this very grounded reality of delivering the offshore wind that we’re looking to deliver and shifting from one point something gigawatts a year up to four. I mean that’s pretty much a factor of four increase. We’ve talked about some of the big challenges and a huge one, as is evident by our conversation, is around the way in which communities engage and are bought in. We’ve been trying to talk about it through a positive lens but I guess, to put it bluntly, if we’re trying to massively upscale this, if communities aren’t bought in, it’s going to create barriers to action. We also talked a little bit about the supply chains that we need to deliver this and presumably, they are not there right now. The jobs are not there and the skills may not be there. So thinking about how communities may be engaged, both in terms of supporting engagement with the projects as well potentially growing the workforce in those areas, what are the very practical things that now need to happen to make that target of 50GW achievable?
Grace: I think learning lessons from fixed offshore wind and the fixed offshore wind has currently developed because their supply chain has gone abroad. It’s very offshore. [Laughter] So because they’ve not been able to scale up the UK supply chain in line with the development that we’ve been doing, things have gone abroad and turbines are built and shipped in. In order to avoid that for future developments and particularly for floating offshore wind which we’re starting anew and starting in a new area, again, if you’re going to use the supply chain around that region, that’s bringing that up from the ground up really. We need to focus on the projects that we can deliver right now. I want to move away a little bit from that ambition of 50GWs because if we just aim for 50GWs, what we’re going to do is we’re just going to keep trying to build up these ports and build up the supply chains to deliver gigawatts; whereas actually, what we’ve got right now is a handful of 100MW floating offshore wind projects and we’ve got some gigawatt fixed offshore wind ones but it’s being able to actually deliver the ones that we’ve got ready to go now and what that has is like a domino effect where you’re getting work now, then you’re getting a bit more work, then you’re doing another project, so someone hears about you and then when they look to develop somewhere else, you’re the company on their list. Whereas, if we keep telling the supply chain companies and the ports, ‘Well, just hold off because we’ll be getting to a gigawatt soon and we will develop 50GWs but we need to do all this feasibility work beforehand,’ they’re not going to be able to just rely on that future promise of a project or the promise of 50GWs. As Fraser was saying, we’ve just done some work on floating offshore in the Celtic Sea and so that’s where my mind keeps going to around this which is a completely new sector and a completely technology and, therefore, it’s very different to fixed offshore wind because while the supply chains are very similar and the operation of them is very similar, we’re building up from scratch in terms of the locations and everything. That’s where we need to focus. For fixed offshore wind, what we need is to diversify where we’re building and we need to be able to provide the grid, the ports and the supply chain for different areas around the UK. Some companies are going to be really, really busy but it’s about making it so that more companies can have work and that comes from the Tier 1 contractors for these developers knowing what the capabilities of the UK are and not just going abroad. Also, it’s about factoring in other things than just profit. If you just look at this from an economic point of view, then obviously you’re going to go to the place that has experience with building these and you’re going to get the lowest cost for your wind farm but if you start to factor in environmental benefits and social benefits, then actually providing a regional and a UK supply chain outweighs going international. Again, it’s around that shifting of perspective about what you prioritise.
Matthew: I think, Claire, on this and possibly to wrap up here, can we build 50GW going the way that we’ve been going or do we need to change track? Do we need to do this differently?
Claire: I think you’re absolutely right that these are really the questions to be asking. Becky mentioned earlier about the barriers to action and what we might need to do about those. In terms of communities, communities are or can be and they have a barrier to action. There have been projects around the UK that have been rejected or very seriously delayed due to community opposition. So, of course, we should be trying to work with communities because it’s the right thing to do, it’s the moral thing to do and it’s part of a just transition but we could also think very pragmatically that we should be trying to encourage communities and trying to work with communities because opposition can be very effective. I think rather than trying to think about overcoming that opposition, we should be thinking about this much more positively about the way in which developers and developments can enhance local communities in terms of what they can add and what they can bring and that we can make communities proud hosts to this extraordinary technology.
Grace: Am I able to come back on a point that Claire was talking about earlier? We were talking earlier about shared ownership schemes and we were talking about communities owning part of these wind farms. It comes back as well to what we were saying about scale is that these are a completely different scale to what we have when we talk about onshore community ownership schemes. There is a question, and this is just being truly pragmatic about it, around the amount of funds that would have to be raised in order to get a share in a turbine or a farm. You’re raising all that, you’re putting it away and then you’re hoping for some returns on it. Obviously, you’re going to be getting some returns and you’re going to be able to use that money but if they’ve already raised that money in the first place, there is a question about is that the best way to spend it, particularly when community energy schemes, or local areas, or local authorities are challenged to raise those funds in the first place. That’s not an easy thing to raise and we are talking millions of pounds because if we look at a wind farm, that’s going to be billions of pounds [laughter], so if you want a percentage of it… and there is a question around is this the right thing and I think we need to consider, before we run head first into making 10% of all these offshore wind farms community-owned or shared ownership is actually, is that the best use of that money?
Matthew: My two pennies worth on this, which is a very interesting question, is it the right scale or the wrong scale for communities? If you take somewhere like Brighton and Hove, which is a very, very population dense city, and you draw a ring of five miles around the centre of it, half of that is in the sea. So there’s actually a limited opportunity for maybe alternative onshore renewables like wind, solar or PV and so you could flip this the other way and say, ‘Actually, communities have to look to offshore energies as communities because they’re at a natural disadvantage versus inland communities.’
Grace: I wonder if part of it is the attraction of getting people to invest and put money forward in the first place. If you don’t have onshore energy project and you’re not going to do offshore energy projects because they’re too large in scale, what is the thing that you’re pulling people in with in order for them to invest some money and help provide funds for communities? Even though it might be that they could spend that money better if they had this pot of money, maybe it’s the actual act of getting that pot of money in the first place and that’s why you need the pull of investing in offshore wind which is targetting net zero and all this amazing stuff.
Fraser: Maybe our idea of shared ownership or community ownership is too dictated by community solar or a community turbine onshore. Claire, I wonder if you can come on this. Do we have to be thinking bigger? Maybe like the Energy4All or the Ripple model of opening it up to investment from anywhere. Is that still commensurate with true local community benefit? Is this a good way into this?
Claire: Yeah, that’s a very interesting question, Frase, and I think that very often that isn’t seen as being local when people from outside an area are the ones investing. It’s a really interesting question about how communities could invest when the sums here are absolutely huge and if communities are investing in or taking part in shared ownership of an offshore project, then that’s going to have to be a very tiny proportion because, as Grace says, it’s incredibly difficult to raise the money. I think that there is something about the principle of investing. Even if the proportion of that investment is absolutely tiny, there’s something about the principle of investing which demonstrates a commitment by the developer to the community and by the community to the project. As we know, Denmark is covered in onshore wind cooperatives and apparently, the Danes say, ‘Your own pigs don’t smell.’ So there’s something that I think we can all take forward [laughter] in that if you’re investing in a project and if you feel that you have some sort of ownership, even in a tiny sense and even in a very loose sense, then you’re much more likely to be supportive of it… or think it doesn’t smell.
Matthew: Okay, and that has to obviously be the title of this episode now, Claire [laughter]: Your Own Pigs Don’t Smell [laughter].
[Music flourish]
Thank you both. I think we ought to draw a line under it. I know we could chat on but thank you very much for all your insights. It’s been absolutely fabulous having you.
Claire: It’s a pleasure to be here. Thank you very much.
Grace: Thank you so much for having us.
[Music flourish]
Fraser: You’ve been listening to Local Zero. Thanks again to our guests, Claire and Grace. If you haven’t already, go and find and follow us @LocalZeroPod on Twitter to get involved with discussions there. Also, please, please, please feel free to email us at LocalZeroPod@gmail.com. We really do love hearing from you all.
Rebecca: And if you can, do take two minutes to leave us a review. These reviews really help us to spread the word about the podcast and to reach new listeners, especially if they are five stars but until then, thanks for listening and goodbye.
Fraser: Bye-bye.
[Outro music]
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