AN AGREEMENT in principle on how Viking Energy would pay money into a community benefit fund is expected to be reached by the end of July.
Shetland Community Benefit Fund Ltd chair Chris Bunyan told a meeting of Lerwick Community Council on Monday evening that after being “dormant for a number of years” the group has been forced into activity as Viking Energy wants “this part of the project settled” quickly.
It comes as the government auction for renewable subsidies has opened, with the 103-turbine Viking Energy wind farm expected to get the green light if its bid is successful and a subsea cable is then installed to allow the export of energy to the mainland.
Viking Energy is expected to pay up to £2.25 million into a community benefit fund each year if the project goes ahead – £5,000 per installed megawatt capacity.
The money would be used for community projects, while up to 10 per cent of the annual payment is set to be allocated directly to community councils across the isles, with areas featuring turbines in line to receive a greater share.
A draft agreement has been negotiated between Viking Energy and Shetland Community Benefit Fund Ltd and the group is seeking the thoughts of community councils on the terms.
Shetland Community Benefit Fund Ltd is a co-operative which was formed by the Association of Shetland Community Councils in the early days of the Viking Energy project, with each community council able to nominate a representative to its board.
Bunyan told members of Lerwick Community Council that the fund was now faced with a “frightening amount of work” after Viking Energy appeared to fast track the community benefit process.
He said the fund had expected that the terms would need to be agreed by the end of the year or early next year, but Viking Energy put pressure on the group to finalise the agreement by the end of May 2019 – something which they agreed to delay for a couple of months on request of the fund.
The draft terms state that the benefit fund will award grants or loans to support community or charitable actives from not-for-profit groups.
It may also award grants or loans, or make investments, to promote “economic development activities” in Shetland.
Lerwick Community Council chairman Jim Anderson questioned, however, if the benefit fund was properly mandated in light of it having a number of vacant community representative positions, including in areas like Bressay and Delting.
Bunyan said that a few of the vacancies were the result of people stepping down recently.
The chairman said he was concerned that “people are oblivious to the fact that you exist” – especially new community councillors elected over the last year.
Anderson also asked if the community benefit fund company had enquired about taking in money from other proposed wind farms in Shetland, like Peel Energy’s Mossy Hill and Beaw Field developments, and the Energy Isles wind farm in Yell.
Bunyan said it was likely that the two Yell projects – Beaw Field and Energy Isles – will “follow the local community’s view on benefits” and that the money was likely to stay in the island.
He said he has previously raised concern, including with Northern Isles MP Alistair Carmichael, about one particular island or community accruing “considerable sums of benefit”.
Bunyan praised Viking Energy for wanting to spread the community benefit payments across the whole of Shetland.
Arwed Wenger, who is Lerwick Community Council’s representative on the fund’s board, admitted he was concerned to read in the draft terms that any community benefit payment would be “voluntary”.
Bunyan, however, said that this was because there is no mention of community benefit payments in law, and that it is instead a well-established standard practice.
He reassured members that “there will be a legally binding contract that they will have to pay these payments”.
The meeting also heard that community benefit money would be paid shortly after the start of major civil construction work on the wind farm, rather than from when the turbines start being operational.
This means that Shetland could potentially receive an extra year of community benefit payments on top of the wind farm’s 25-year lifespan, Bunyan said.
He added that the community benefit fund would remain independent. “We have said quite clearly in the past – we don’t intend to supplement the SIC,” Bunyan said.
“Several times in recent years we have had to fight off attempts by the SIC to take over the fund,” he added.
However, the chair said the fund wishes to “dovetail alongside existing schemes”.