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Letters / Will the community benefit payments be adequate? (Viking Energy)

Some people in Shetland may be interested in the history of the Shetland Community Benefit Fund.

“If the Viking Energy windfarm goes ahead the community benefit fund will be of tremendous importance in helping to support and develop local communities. Because it is not a charity, the co-operative will be free of all the rules and regulations that tightly control how they can and cannot spend their money.”

“I saw the potential of community benefits from renewable energy over six years ago and am honoured to have been elected chairman. We are very close to an agreement with Viking Energy on all but one or two crucial issues. There have been very productive talks so far and hopefully these can come to a conclusion within a few months.” (The Shetland Times, 13/3/2013)

This is what Chris Bunyan is reported to have said on his appointment to the chair of the Shetland Community Benefit Fund Ltd (SCBF), succeeding Bobby Hunter who had recently been elected chair of Shetland Charitable Trust.

Evidently the agreement was not as close as all that…

It is perhaps not so widely known that SCBF received approval in June 2013 from the Shetland LEADER programme for a grant of £16,625 (47.5 per cent of total eligible costs) “to develop the aims and objectives of the Shetland Community Benefit Fund into a comprehensive development and business plan” (https://www.shetlandleader.org/approvals/shetland-leader-programme-for-2007-to-2013-approvals).

Perhaps this offer was never taken up?

For now we are led to believe that the organisation has been almost “dormant” for a number of years. Also, if there are vacancies for up to six community council representatives on SCBF’s management committee, one can’t help but wonder when the last AGM was held.

But leaving that aside, according to Shetland News (Viking pushes for agreement on community benefit fund; SN, 4 June 2019), Viking Energy Wind Farm LLP (VEWF) could annually pay to the fund £5,000 per installed Megawatt (MW) which, if the consented 457 MW is achieved, would be £2,285,000. 10 per cent of that, £228,500, would then be paid annually by the fund to the eighteen community councils: if the sum were to be distributed equally, each would receive £12,694 per annum (for the lifetime of the windfarm).

In this scenario, one wonders what happens to the remaining 90 per cent – just over £2,000,000 – of VEWF’s annual payment. Will it be another ‘rainy day’ investment, or…what?

VEWF, or rather Scottish and Southern Energy (SSE), is keen to agree the “heads of terms”, and, according to Chris Bunyan, it has “taken the lead”, and is even being “surprisingly co-operative and helpful.”

These are very telling comments, as they demonstrate the change in relationship between the Shetland community and SSE. Shetland Charitable Trust has withdrawn from any payments towards building the windfarm, thus ceasing to be an active partner in the project, and forfeiting a good deal of its (or our) projected income.  Now it’s almost as if we have to go ‘cap in hand’ to a potential benefactor.

SSE’s sudden interest in the community benefit fund is of course just a means to an end. With the present Contracts for Difference auction being officially open, pressure is on the company to show that its Remote Island Wind project is of benefit to Shetland, as is required by the UK government.

The last figures on community economic benefit to be published by Viking Energy that I can find are in its 2010 Environmental Statement Addendum (Chapter A 17, Socio-economic effects), and were based on 127 turbines, rather than the 103 consented. Extracts read as follows:

“The level of local ownership within a project of this scale is unique. As a result of this and other agreements revenue generation and income impacts during the operational phase will be significantly different from other projects with a more standard ownership model.

“The continuing positive impact is also partly due to the unique ownership model with 50% local ownership. It is expected that around £848m over a 23 year period is likely to come into the local economy directly as a result of the operation of the wind farm, of which £529m will come to the Shetland Charitable Trust (average of £23m per annum before tax and depreciation).”

There was also to be a “community levy” of £1.3 million per annum “for the local communities directly affected.”

How this was to be administered is not clear, nor do we yet know how it would be affected by the demise of the “unique ownership model.”

Will the community benefit payments that are finally agreed be commensurate with those that were presented to the Scottish Government, and, enticing as they yet may be, will they adequately compensate for the damage done to the environment and an already fractured community, and to Shetland’s reputation as a beautiful, relatively unspoilt holiday destination?

I fear not.

James Mackenzie
Vice-chair, Sustainable Shetland