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. In response, EirGrid devel- pylon for 110 kV lines. oped a community gain package that would be de- ployed on new development projects in the coming The proximity payment is dependent on the voltage years. The package contains two elements: of the line, and is based on a sliding scale; the high- est amounts are given to those at 50m decreasing in The community payment is part of EirGrid‘s re- amount per meter to 200m. sponse to public concerns about new grid infrastruc- ture. The payment looks to share the benefits of new and upgraded network infra- structure with the commu- nities whose cooperation is needed to improve the Irish electricity grid. For each grid improvement project EirGrid creates a dedicated fund, which dispenses payments to communities who are closest to new transmission infrastructure. These pay- ments are used for projects of local value and are dis- pensed in the form of grants.

10 RENEWABLES GRID INITIATIVE Ireland – EirGrid IRELAND – EIRGRID

Ireland – EirGrid RENEWABLES GRID INITIATIVE 11 The process used by EirGrid involves the following consultations were undertaken for the project be- steps: tween 2009 and 2012, with the project receiving • Once the route has been agreed upon, EirGrid final planning permission in January of 2013 and approaches homeowners and explains the offer- construction forecast to be complete sometime in ing and application details. 2016. The line is expected to cost in the region of • EirGrid assesses applications and will either con- € 25 million. The project was identified by EirGrid firm the offer or explain reason for rejection. as a good candidate to pilot the rolling out of the • Homeowner reviews and either accepts or re- community gain package, as construction works co- jects offer. incided well with the introduction of the scheme. • EirGrid pays 20 % of amount when construction starts. The community payment element of the project was • EirGrid pays the remaining 80 % when the line is made available in April 2016 to non-for-profit, com- energised.

 KEY FACTS Both elements are defined as “ex-gratia” by EirGrid and are considered a gesture of goodwill by the com- • The “Community” Gain package was intro- pany. This means that EirGrid does not recognise duced in response to a guidance document any obligation to pay this money and is therefore released by the Irish Government that not legally bound by its choice to do so. Individuals encouraged the implementation of such and communities will only be offered money in this measures. way when impacted by one of EirGrid‘s “Greenfield” • € 15,000 per Km are to be made available projects, meaning that the package does not apply on the initial pilot of the fund (still ongoing). to upgrades of existing lines or substations. • Part of the fund is to be managed by the Mullingar-Kinnegad Community local authority (smaller grants) with larger, Payment regional grants managed by the “The Com- The Mullingar-Kinnegad project is a new 110 kV line munity Foundation for Ireland” (a grant currently being used by EirGrid to pilot the roll out managing NGO). of a community payment. The project is planned to • Involves an independent proximity payment run between two existing substations for a length of element for all those whose main dwelling 24 km, running alongside two existing 110 kV lines. is within 200m of the centerline or pylon A total of 125 double wood pole structures and 23 (depending on voltage). steel towers are to be constructed along the length • Money to be used for employment, educa- of the proposed development with associated up- tion, environmental and community facilities grade works also planned. Several rounds of public

12 RENEWABLES GRID INITIATIVE Ireland – EirGrid munity or voluntary organisations with potential administer these larger awards on behalf of EirGrid projects located within a defined boundary around and have advised EirGrid on the main issues within the new transmission line. The community payment the Mullingar-Kinnegad area. The four areas identi- made available for the project was set at € 360,000 fied include: (€ 15,000 per km x 24 km of line.) • Employment The payment is broken into two streams of grants • Education based on the following differing amounts that are • Environment on offer to the applicant: • Community Facilities

€ 1,000 to € 10,000 - These grants are targeted Evaluation Committees are currently in the pro- at smaller initiatives, and will be administered by cess of being established and will comprise elected Westmeath County Council (the local authority) on members of local authorities, Council staff, EirGrid behalf of EirGrid. representatives and independent members of local community organisations. € 10,000 to € 50,000 - For these amounts, the payment looks for benefits proven to last over the The process for the dispensation of the proximity medium to long term. Priority is given to projects payments is currently ongoing and is following Eir- where community and voluntary groups work to- Grid‘s established policy. Full results for both ele- gether to serve a wider area or a larger number of ments of this initial pilot will be available in the sec- people. The Community Foundation for Ireland will ond half of 2016.  LINKS • EirGrid Mullingar-Kinnegad Community Fund details http://www.foundation.ie/wp-content/uploads/2016/04/Criteria-EirGrid-Community-Fund- Mullingar-Kinnegad-110-kV-Line-1.pdf • Details of the Mullingar-Kinnegad project http://www.mullingar110kvproject.ie/index • “Strategic Importance of Transmission and Other Energy Infrastructure” policy statement - Irish Government http://www.eirgridgroup.com/site-files/library/EirGrid/GovernmentPolicyStatementontheS- trategicImportanceofTransmission.pdf

Ireland – EirGrid RENEWABLES GRID INITIATIVE 13 FRANCE – RTE

Payments into local government budgets form the cal committees (usually defined to what extent the backbone of community payment mechanisms in town/area is crossed by the line). France. An overhead line project is proposed by RTE, with French legislation enabling local stake- The Haute-Durance Project holder committees to be set up by the relevant In 2009 RTE initiated consultations for the planned Préfet (administrative leader of a local region) in upgrade of the entire regional electricity grid of order to determine the scope and beneficiaries of Haute-Durance (in the French Alps) in order to im- any payments made by the TSO. The Préfet is able prove local infrastructure. This project is a multi to establish different committees for each topic of stage project (18 projects planned in 6 stages) in- interest (environment, tourism etc.) and choose the volving the upgrade, dismantlement and construc- participants who will decide how the money will be tion of several overhead and underground grid lines spent. These committee groups manage the money across the region. These projects are largely new that the commune/region receives, with the com- build 63kW projects with some being upgrades from mittees often including local politicians, agricultural 63 kV and 125 kV to 225 kV, in total they amount to: associations, the Chamber of Commerce, the Com- mission for tourism and the local DSO. The TSO will • ≈ 100 km of new underground lines then go through a process of negotiation with these • ≈ 100 km of new overhead lines well inserted in committee groups and the relevant local authorities the landscape as to define appropriate compensation amounts and • The removal of ≈ 200 km of redundant overhead activities that can be funded. lines

The total amount that is to be spent for community Impact assessments and public enquiries were con- payments is set by the French State - RTE negotiates ducted within the affected communes over the pe- the structuring of these payments, which represent: riod of 2013 and early 2014. By the end of 2014, the final planning consent documents for all of the • 10 % of total project costs for lines at 400 kV or project elements were received, with construction over work beginning in April 2015. • 8 % of total project costs for any strength of line below 400 kV Details of the final design of the community sup- port elements of the project were released jointly by The distribution to the towns the line is running RTE and the leader (Préfet) of the Haute-Alpes dis- through is set by the Préfet through the set up lo- trict in the form of a community support mechanism

14 RENEWABLES GRID INITIATIVE France – RTE FRANCE – RTE

plan (“PAP” in French). The overall community sup- port contribution is equal to 8 % of the construc- tion costs of the above ground and high voltage works, with the final payments projected to reach € 6.9 million. This money is provided for the follow- ing uses: enhancement of the landscape, heritage, tourism, sustainable local development actions and for the undergrounding of existing electrical or tele- phone networks.

The final total is to be dispensed through three sep- arate mechanisms;

• € 6 million (87 %) will go directly to the 22 towns concerned, distributed by the number of kilometers of line, which cross the respective Prefectures. The minimum cost of a project is set at € 20,000 with the search for other co- financers being encouraged. • € 800,000 (11.5 %) will go to other regional communities or organisations such as national parks, environment or social related associa- tions, who are in the proximity and operate in areas visually impacted by the new lines. • € 100,000 (1.5 %) will also be contributed by RTE to a new crowdfunding project hosted by the ULULE online platform. RTE will receive “pitches” from entrepreneurial, cultural and development projects within the Haute-Durance territory. Which projects to fund are decided upon through a “Steering Committee” which is chaired by the Préfet  KEY FACTS of the Hautes-Alpes region. This committee judges which of the proposed projects should be funded • The local Préfet (local government represen- based on the quality of the project, and its consis- tative) organises and negotiates on behalf tency with planning regulations. The committee also of the community, whilst distributing the monitors the impact of those projects which have money amongst the various communities. been chosen to be funded. The committee consists • Depending on the line strength, payments of representatives from the State and other local are calculated at 8 % or 10 % of total proj- elected officials, leaders of local associations and ect costs. a representative from RTE, ERDF (the DSO), and • Money is directed by specialist committees SYME 05. RTE does not participate directly in the set up by the Préfet. evaluation of the projects but acts as an observer in • Final payments projected to reach € 6.9 mil- the committee. lion on the Haute-Durance series of proj- ects. Prior to the decisions made by the “Steering Com- mittee” a “Technical Committee” vets proposed projects to decide whether the project is deemed as legally eligible or not under the guidelines set out in the PAP. This committee is chaired by the Deputy Prefect of Gap/Briançon and consists of representa- tives of the State, the Region and the Department.

 LINKS • Full project information of the Haute-Durance project (French) http://www.rte-france.com/fr/projet/alimentation-electrique-de-la-haute-durance • Full details of community payment element of the Haute-Durance project and beneficiaries http://www.rte-france.com/fr/projet/alimentation-electrique-de-la-haute-durance

16 RENEWABLES GRID INITIATIVE France – RTE

ITALY – TERNA

In Italy local governments are given the right to Environmental measures: stipulate agreements with the TSO in order to re- quest “compensation measures” (Legislative act • Conservation and improvement of habitats. 239/2004). These compensation measures look to • Environmental restoration of areas of public offset residual impacts and supply an environmental interest. balance to those areas that are impacted by either a • Energy efficiency/ energy saving. new grid line project or by the upgrading or conver- sion of existing infrastructure. Urban and infrastructure improvement measures:

After a project has been proposed, the national • Construction/restoration of public buildings TSO Terna approaches the various local authorities (schools, libraries, municipality offices etc.). (provinces, municipalities, national parks) in order • Construction of cycling paths. to negotiate agreements on the nature and scope • Improvement of local architectural/archeologi- of the compensation activities. After discussions, cal/artistic heritage. an initial “Protocol of Understanding” is signed • Improving accessibility of public buildings to the identifying the eligible authorities and defining the elderly (eliminating architectural barriers etc.). project route and rationale (upgrading of old pow- er lines etc.). The total amount of money for com- Subsequent to this, the local authorities that signed pensation measures is set by Terna and based on a the protocol of understanding suggest specific ap- percentage of the total project costs (approximately propriate projects that fit into one of the provided 6%). The money is then allocated to the local au- categories. After the projects have been identified, thorities based on a methodology provided by the a contract (Convenzione) is signed with each mu- consultants CESI (Centro Elettrotecnico Sperimen- nicipality to define and approve how the author- tale Italiano). This allocation is mainly based on the ity will receive and spend their respective monies. project parameters and the areas physical charac- This is done after a formal vote for approval is held teristics (number of km of new lines, voltage, sub- within each provincial/municipal administration. stations, environmentally sensitive area etc.). The project itself has to be located on public soil within the boundaries of the authority that signs the Terna provides a list of project categories that it is agreement, regardless of its distance from the grid willing to fund and for the authority to realize, this infrastructure. includes:

18 RENEWABLES GRID INITIATIVE Italy – Terna ITALY – TERNA

Italy – Terna RENEWABLES GRID INITIATIVE 19 The payments are structured in three steps: the first • Upgrade of heating systems (schools, public of- 25% is paid when the working site opens, during fices). construction the authority is then able to invoice • Restoration of historical buildings and churches. as the compensation project progresses. Finally the • Cycling paths and car parking areas. balance of the agreed upon sum is then paid when • Recreation grounds. the power line is operational. • Remediation of waste disposal areas for ecologi- cal improvement. The most common actions of public interest to be funded by Terna so far have been playgrounds, The most effective compensation project has streetlights, pedestrian/cycling paths and the res- been deemed by Terna to be the project realised toration of public schools and of cultural/artistic by the Municipality of Chignolo Po. This included heritage. the demolition, re-design and enlargement of a local secondary school (pictured) in order to al- Chignolo Po-Maleo 380 kV powerline low the school to increase its capacity and host The 24km Chignolo Po-Maleo power line is a line both primary and secondary school children. upgrade that runs between the cities of Pavia and Lodi, both located in the region of Lombardy. The  KEY FACTS initial “Protocollo di Intesa” (MoU) was signed in June 2008 by the province of Lodi, the river Adda • The total amount of money for compensa- park authority and 8 municipalities. Terna identified tion measures is set by Terna and based on the total amount available for compensation based the total project costs. on the forecast project costs and allocated this • Terna uses a methodology developed by a amount amongst the impacted authorities. These consultant (CESI) to calculate the division of authorities then identified a set of compensation compensation monies based mainly on the projects adhering to the list of possible actions set project parameters and the areas physical out by Terna, with each project being formally ap- characteristics (km of line, substation etc.). proved by Terna and the leading bodies of both the province and the municipalities. • Terna provides a guiding list of projects that it will fund, with the specific projects to be The most common projects chosen for this project funded jointly agreed upon. were: • The most common actions of public inter- est to be funded by Terna so far have been • Maintenance of the roads pavements. playgrounds, streetlights, pedestrian/cycling • Construction works for public gyms, stadiums, paths, the restoration of public schools and schools and municipality offices. cultural/artistic heritage.

20 RENEWABLES GRID INITIATIVE Italy – Terna France – RTE RENEWABLES GRID INITIATIVE 21 SCOTLAND – WIND ENERGY SECTOR

The Wind Energy sector in Scotland has a relatively als in Scotland” Scottish Government guidance pa- long history of offering community payments on per (2014). their projects (over 10 years). Although wind farms are relatively contained “non-linear” projects, there Rather than promoting an approach that looks to exists a similar set of public acceptance issues faced tie funds to local government budgets, the volun- by both the wind energy industry and grid expan- tary setting up by developers of structured com- sion projects. The mechanisms used in Scotland re- munity funds that are managed independently by a garding community payments are therefore of value selected panel is encouraged. The Scottish govern- to all those interested in developing appropriate ment’s position also seeks to encourage innovative schemes for grid infrastructure projects. approaches such as in-kind benefits (habitat im- provement, industry apprenticeships) and broader The Scottish governments guidance on community regional development. Additionally, the schemes benefit schemes for wind energy developments is set up by wind energy developers in Scotland are grounded in the belief that such schemes “present voluntary and are separated from the decision mak- an opportunity for social, economic and environ- ing planning and permitting process run by the local mental improvements to communities and individu- authorities’ planning department.

22 RENEWABLES GRID INITIATIVE SCOTLAND – WIND ENERGY SECTOR It is suggested by the Scottish government that the the financing of local projects and judges on their geographical scope of the funds is based around the suitability, such activities have included; community/parish councils (local governmental dis- tricts). Although these councils are suggested as the • Environmental protection and improvement focus for setting up such funds, no strict rules are projects provided to limit their geographical scope; this has • Building/Improvement of sporting facilities not been done as it is considered important by both • Education and training projects for local people industry and government in Scotland to leave a cer- • Supporting culture and heritage tain amount of flexibility in the process. Management of the funds are ideally governed by How is the money spent? local community action plans, which set community Several of the larger developers in Scotland man- priorities through a consultation process, with re- age the funds “in-house” and administer the fund on porting and review processes built into the fund’s behalf of the community, while others are managed ToRs. by independent charitable foundations (e.g. Foun- dation Scotland). The terms stipulated by the devel- Ensuring Transparency oper are generally “hands-off” and do not prescribe Both the Scottish government and developers are specific uses for the money, rather they define the well aware that if transparency is not ensured then Terms of Reference (ToRs) for the management of the funds are unlikely to have their desired effect, the fund, the amounts given and some restrictions and possibly even erode local trust. The “Scottish on what the money can be used for (no political ac- Government Community Benefit Register” was set tivity/anti-wind farm activities etc.). up as a voluntary way for communities and indus- try to publish what they are paying/receiving, how The decision making body that runs the fund usually the fund is being administered and what it is being consists of at least one local government official. spent on. Apart from this scheme, it is largely up to Who makes up the rest of the panel varies and can the developer as part of their offering to ensure that include a variety of people deemed responsible and stakeholders understand all parts of the process and representative. This panel reviews applications for that they instill complete accountability and trans- parency.

SCOTLAND – WIND ENERGY SECTOR RENEWABLES GRID INITIATIVE 23 SSE – COMMUNITY INVESTMENT PROGRAM

Since 2002, the energy company and wind farm de- as: skills development and training, social enter- veloper SSE has funded over 1,500 community proj- prise, amenity, educational, charitable, or environ- ects, with grants totaling over £16 million. SSE of- mental purposes. fers a community investment fund on all its onshore wind energy projects in Scotland, with the latest Smaller micro-grants (usually under £500) are ad- updated package offering published in 2012. SSE ministered by the community/parish council, any commits a fixed amount of money to each project, amount greater than this goes to the community with the amount currently set at £5,000 per MW of panel for a decision. The process runs as follows: installed capacity every year for up to 25 years. Of this money 50 % is ring-fenced for the “local com- • Memoranda of Understanding and ToRs are munity”, with the other 50 % set aside and pooled signed with the council (after planning permis- into a “regional” fund for the wider area. sion received). • Fund is made public and advertised to local The Local Community Fund: This half of the fund people. looks to focus on those communities living in direct • Applications received from public and assessed proximity to the wind turbines. The local community (criterion of assessment are flexible). is initially defined as being the community council • Panel meets and decides what to fund areas within close proximity to the wind farm site, • Monies paid. this definition is flexible as this can include commu- nity/parish councils where significant visual impact, The money cannot be used for politics, religion, di- or impact from construction activity, also occurs. rect energy subsidies, or activities that are deemed by SSE to be harmful to their interests or the wind Once the project has full planning permission, SSE energy industry more broadly. starts working with local community councils to set up a small panel of community representatives who Regional Sustainable Development Fund: The sec- decide on how the money is spent. The local fund is ond half of the fund is ring-fenced for the wider lo- for use by communities, predominantly within their cal authority area and is designed to support larger geographical boundaries (community/parish council regional initiatives, with applications for funding area), as they see fit. This has included projects such coming from across the region. SSE looks to focus

24 RENEWABLES GRID INITIATIVE SSE – COMMUNITY INVESTMENT PROGRAM SSE – COMMUNITY INVESTMENT PROGRAM RENEWABLES GRID INITIATIVE 25 the money on projects in close proximity to the wind preparing fund reports, grant-making and publicis- turbines, but applicants’ from farther afield can also ing the fund and supported projects. apply. The money often supports larger initiatives such as:  KEY FACTS • Skills development and training • Built or natural environment projects (e.g. Build- • SSE commits a total fixed amount of £5,000 ing a tourist walk through the region) per MW per year of operation (for 25 years • Community renewable energy projects/energy of forecast operation). efficiency schemes. • Divided 50/50 into a Local Community Fund and a Regional Sustainable Development Projects can be set up to tackle one specific region- Fund. al issue, such as funding for apprentice schemes for • Micro-grants (smaller than £500) are admin- the young. istered by the community/parish councils.

Like the local community fund, all funds are man- • SSE manages the larger grants “in house” aged “in-house” and assigned a fund manager who with a separate panel of local politicians, is an SSE employee. The management of the fund community leaders, regional development was brought in-house (it was previously managed by experts and SSE representatives awarding an external organisation) so as to build a more solid the grant money. relationship with project stakeholders. SSE manages • Funds are only set up after planning permis- the funds by receiving and assessing applications sions is confirmed. against the agreed upon criteria, preparing panel documentation, undertaking annual fund reviews,  LINKS • Guidance Principles from the Scottish government on community benefits for onshore re- newable developments http://www.gov.scot/resource/0043/00438782.pdf • Scottish Government - Local Energy Scotland - Community Benefit Register http://www.localenergyscotland.org/ • SSE - Community Investment Review 2014/2015 http://sse.com/media/328462/CommunityBenefitReport_2014-15.pdf

26 RENEWABLES GRID INITIATIVE SSE – COMMUNITY INVESTMENT PROGRAM IMPRINT

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