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Letters / Managing community benefit from commercial renewable energy schemes

I welcome Sustainable Shetland’s points in their recent letter about Viking Energy and the community benefit scheme and will try to explain some of the background (Will the community benefit payments be adequate?, SN; 13/6/19). Unfortunately that can’t be done in a couple of paragraphs.

Shetland Community Benefit Fund Ltd (SCBF) was established as a separate legal body by the Association of Shetland Community Councils to negotiate and manage community benefit schemes from commercial renewable energy developments in the islands – if they ever happen. All 18 of Shetland’s community councils have a seat on the management committee.

SCBF takes no view on the rights or wrongs of Viking or any other scheme. We have folk on the committee with very different views – but all agree that if developments do happen we should try and achieve the best possible deals for the islands. Therefore the wider issues raised by Sustainable Shetland regarding Viking and other developments are not for SCBF to comment on.

To answer Sustainable Shetland’s points in order:

1) SCBF did apply for LEADER funding in 2013 to prepare a business plan. Our application was approved but we never went any further because Viking’s prospects declined and there was no point in carrying out work that might be pointless.

2) The draft agreement SCBF has with Viking Wind Farm LLP allows for up to 10 per cent of the community benefit to be allocated to projects directly proposed by community councils. That money will not be divided equally but divided into shares – the four community councils with a Viking turbine in their area will receive five shares each and the other 14 will get one share each.  Using Sustainable Shetland’s figures that would be £33,600 a year for the four areas and £6,700 each for the others. Also a maximum of 10 per cent of the total is allowed for SCBF administration.

The bulk of the money will be held centrally by SCBF and disbursed by grant, loan or investment on the basis of a business plan with clear criteria, transparency, auditing etc and would be available Shetland-wide. We are at the start of work on this and are currently consulting community councils and their members for ideas on the plan’s strategic objectives.

3) We are also consulting with community councils on the initial agreement with Viking which will form the basis of a formal legal contract – if it goes ahead at all. In addition SCBF is taking legal and financial advice.

4) SCBF does not know whether or not the community benefit proposals play any formal part of Viking’s application to the government’s so-called Contracts for Difference scheme.

5) We are also in contact with the other two main Shetland commercial developers regarding their schemes.

In the next few months SCBF hopes to increase the public’s awareness of its work – and the potential benefit of £2.2m a year for 25 years going into the islands’ communities – assuming Viking and the interconnector cable go-ahead. If they don’t then we will all have more spare time on our hands.

Chris Bunyan
Chair of Shetland Community Benefit Fund
Market House