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Download Brochure COMMUNITY PAYMENTS Case studies from across Europe FOREWORD Payments by TSOs (Transmission System Opera- This brochure, therefore, looks to act as a knowl- tors) to communities who are present in the vicinity edge-sharing tool by presenting five case studies of of new grid infrastructure have become a common community payments from across Europe. Four of practice throughout Europe. These payments (also these case studies are from the electricity grid sec- known as community compensation/gain/benefit) tor (Ireland, Germany, France and Italy) with a fifth have been seen as a way to both increase local sup- coming from the wind energy sector in Scotland. By port and to supply an “appropriate benefit” to com- creating a common understanding of how TSOs and munities that host grid infrastructure. At the same energy companies across Europe are designing and time, such transactions have been criticised as a implementing their community payment schemes, tool to ‘buy’ local community support. Finding the we hope to facilitate the improvement in practice right, legitimate approach to agree upon such pay- across Europe. ments is therefore of high importance. This brochure builds upon past work done by RGI, The methods used to design and administer pay- which has involved the hosting of several mini- ments to the community with regards to new grid workshops on community payments with contri- infrastructure are diverse. RGI has received requests butions from industry and civil society partners. It from many of its members and external partners also looks to inform RGI’s planned engagement with who are curious to understand what current prac- regulators and European wide organisations on this tice in this field looks like and how it is being shaped topic. A projects inclusion in this brochure does not by local circumstances. These requests come from indicate an endorsement of the project or the spe- a desire to improve practice through the sharing of cific community payment type used. real world “on the ground” experiences. Foreword RENEWABLES GRID INITIATIVE 3 INTRODUCTION Community payments for grid infrastructure are Community payments often share some of the fol- payments made by the TSO (Transmission System lowing characteristics: Operator) to provide a direct benefit to communi- ties in the vicinity of a new or upgraded high voltage • They fund local projects of community benefit electricity line. These payments can be defined as a with a pre-determined one-off or yearly contri- “goodwill” contribution by the TSO for the benefit bution. of communities affected by development, where the • Local/regional government either controls the development will likely have a long-term effect on money or assists in the payments set-up, man- that community. agement and dispensation. • Amounts made available by the TSO are initially Community payments are part of the project of- based on the project characteristics (length of fering due to a desire from the TSO to redress the line, number of pylons, total project cost etc.). lack of local gain that local people often experience • They are geographically limited to activities or from new grid infrastructure. However, offering projects that are a pre-determined distance from community payments is, for many TSOs, also a way the line, or within a local government jurisdic- of meeting corporate social responsibility aims and tion through which the line passes. of creating or maintaining a positive public opinion towards their current and any possible future de- Although often similar, mechanisms for distributing velopments. These payments are a separate offering community payments are currently being designed from compensation monies given to landowners, or in a number of ways. The methods used to define any actions that are considered necessary for the the geographical scope, who is chosen to manage project to receive the required planning or environ- the funds and what these funds are finally used for mental permissions. Consequently, these payments vary from country to country and in some cases are also not considered by the planning authority from region to region. Setting up community pay- when determining the outcome of planning applica- ments as a way of creating local value can be chal- tions. lenging. Ensuring transparency and equity have to be the two primary concerns of any TSO and super- vising governmental authority. 4 RENEWABLES GRID INITIATIVE IntroductIon INTRODUCTION GERMANY – 50 HERTZ In 2012, 50Hertz introduced its policy on “com- opportunity to claim compensation from 50Hertz. munity compensation” (community payments) in As the project becomes more advanced, uniform cooperation with the national regulator (BNetzA) contracts are signed between 50Hertz and the par- and state and national governments. 50Hertz is the ticipating “Landkreise” that guarantee the amounts first and only TSO to introduce community compen- calculated and secure the rights and responsibilities sation in Germany, with the here detailed process of both parties. Amounts are calculated strictly on considered by 50Hertz to be a pilot case. So far, the basis of the length of the line that crosses the community payments have been paid in two proj- community territory/the strength of the line and the ects in the company’s area of operation (North East- number of electrical systems, with no negotiation ern Germany). on amounts possible. The communities themselves then either choose to accept or reject the contract Before introducing the payments, the organisational offering as it is. and legal components and ramifications of introduc- ing such a policy were examined by the 50Hertz le- The money itself is paid by 50Hertz to the qualified gal department. 50Hertz’s policy was designed in community upon the commissioning of the project, line with a piece of German legislation (StromNEV, with the community free to use the money as they §5(4)) that was issued by the German government see fit. According to the legislation, 50Hertz plays and which was reviewed by the German grid regula- no further role in directing how the money is spent tor. This piece of legislation gave TSOs the opportu- and is reimbursed through the grid tariff. nity to pay a limited amount of money (Max 40,000€ per km of line) to the local communities (“Landkrei- Schwerin-Hamburg “Wind Bus Bar” se”, county/parish council) through which a planned project line would cross. Compliance issues were reviewed The 88 km Schwerin-Hamburg “Wind Bus Bar” proj- checked and discussed with 50Hertz’s Compliance ect is a 380 kV line connecting new wind energy Ombudsman and the responsible authorities, to capacity to consumption areas across northern Ger- avoid any legal risk for 50Hertz, its employees as many. 50Hertz made clear that they were willing to well as for community authorities and their employ- offer compensation on this project during early con- ees. sultation meetings with the local authorities, with contracts then drafted for agreement with each of 50Hertz begins the community compensation pro- the communities. cess by informing the affected communities in the early consultation phase that they will have the 6 RENEWABLES GRID INITIATIVE Germany – 50 Hertz GERMANY – 50 HERTZ Germany – 50 Hertz RENEWABLES GRID INITIATIVE 7 8 RENEWABLES GRID INITIATIVE Germany – 50 Hertz 23 Landkreise in all were eligible for compensation, the best conduit through which to spend the money with 22 deciding to take the money on offer. One in the public good. of those eligible did not receive the necessary feed- back from the supervising body (the state authority) KEY FACTS due to disagreement on competencies and respon- sibilities, and in consequence, did not ask for the • Payments are made directly into the operat- payments. The project was commissioned in 2012 ing budgets of the county/parish council, at with money paid out that year. The money paid a maximum of €40,000 per Km of line. went into the general operating budget of the local 50Hertz plays no role in deciding how the council, whose main areas of responsibility include, • community spends the money. among others: • The organisation and amounts paid for • Public parks “Community compensation” are defined by • Social welfare German law, but remain optional for the • Youth welfare TSO. • Public libraries • 50Hertz has paid community compensation • Building and upkeep of regional roads on two projects so far and plans to roll it • Financial support for cultural activities etc. out on all following projects. • Other German TSOs are currently working 50Hertz sees the money given as a way to redress a with 50Hertz to learn from their approach. lack of local gain in such projects. Those running the • Money to be used for public amenities, communities and receiving the money are consid- support schemes for the youth and elderly, ered to be respected and embedded within the lo- tourism and cultural activities. cal community, and are considered by 50Hertz to be LINKS • The StromNEV, §5(4) legislation (German) https://www.gesetze-im-internet.de/stromnev/__5.html • 50Hertz policy on compensation for municipalities http://www.50hertz.com/en/Grid-Extension/Compensations-for-municipalities • Details of the Wind Bus Bar project from 50Hertz http://www.50hertz.com/en/Grid-Extension/Projects/Wind-Bus-Bar Germany – 50 Hertz RENEWABLES GRID INITIATIVE 9 IRELAND – EIRGRID EirGrid‘s “community gain” measures were devel- EirGrid deliberately keeps the structure of the pay- oped in response to a 2012 policy statement re- ments flexible in order for them to suit a variety of leased by the Irish government on the “Strategic local contexts. Importance of Transmission and Other Energy Infra- structure”. This policy statement looked to promote The proximity payment aspect looks to provide di- ways of increasing public acceptance of grid infra- rect benefit to those impacted by the line. This con- structure by supporting community gain approach- sists of a payment made to all homeowners whose es, with the emphasis on landscape, biodiversity occupied building is within 200m of the centerline and civic amenity benefits that could be brought to of 220 kV and 400 kV lines, or within 200m of a new impacted communities.
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