Local Energy - Energy and Climate Change Contents

5  Public acceptance of energy infrastructure

71.  Public opposition to new energy developments—whether windfarms, nuclear power stations or shale gas fracking wells—can be a significant barrier to developing the additional capacity that is needed to meet our energy security objectives. In June 2013 Government announced new planning guidance for onshore wind farms.[163] Key points from the new proposals include:

  • a five-fold increase in benefits paid by developers to communities, to increase from £1,000/MW of installed capacity per year, to £5,000/MW per year for the lifetime of the wind farm;
  • earlier and greater community involvement, including compulsory pre-application consultation with local communities for the more significant wind applications, and
  • best practice guidance from DECC to onshore wind developers with regard to community engagement.

The Government has also stated that the new Office of Unconventional Gas and Oil will examine, as a priority, Community benefit from shale gas exploration.[164] Our inquiry investigated a number of factors that might affect acceptance (or otherwise) of energy projects.

Project size

72.  The size of a new energy plant does not seem to have any impact on levels of local acceptance or opposition. That is, small and medium-sized projects can attract just as much local opposition as larger-scale plants.[165]

Community engagement and consultation

73.  Many witnesses felt that large corporations involved in renewable energy developments contributed little to the community and failed to engage local people.[166] Merlin Hyman, Regen SW, suggested that strengthening relations between energy developers and the public was vital for the growth of the renewable sector:

There is no way that we will build the scale of distributed/renewable generation that we need without a better relationship between development and the public. People notice this stuff. It is there, it is in front of them, and they want to know why it is there and what it has to do with them. There is a huge appetite to engage, understand and gain benefit from it. If we think we can just sit there and build out the renewable energy of the future without a much better relationship between development and the communities then we are living in cloud cuckoo land, frankly.[167]

Friends of the Earth suggested there was a lack of trust in developers, particularly larger companies, and recommended that communities be given greater prominence in decision-making processes to ensure adequate community benefits. The organisation also noted that "better public participation in the local plan stage as well as the pre-application stage is crucial", and went on to suggest that local energy projects involved a mandatory proportion of community ownership (see below).[168]

74.  We welcome DECC's proposals in conjunction with DCLG to introduce best practice guidance on community engagement and compulsory pre-application consultation for larger wind farms. These measures should help to encourage earlier and better quality consultation with communities, leading to greater public acceptance. DECC should consider extending these guidelines to cover other local energy projects in addition to wind.

Ownership model

75.  The ownership of new projects does appear to have some impact on the likelihood of local opposition. The Co-operative Group told us that it had commissioned an opinion poll, which suggested that opposition to wind turbines fell if they were "owned by and benefitted the community".[169] Research by Community Energy Scotland and Warren and McFadyen also supported this conclusion.[170] Many other witnesses shared the view that some level of community ownership (including owning a stake in larger projects developed by energy companies) would help to boost support and reduce opposition to new developments.[171] One witness, Renewable Energy Systems (RES) (a renewable energy developer), was less convinced and explained that its own study had shown that many people were put off the idea of owning shares in a wind farm because it was perceived to be too complex and risky.[172] There may therefore be some difficulties in harnessing local benefit through community ownership.

76.  DECC told us that it was hoping to "get more robust evidence on [the impact of community ownership on acceptance of energy infrastructure] through its Community Energy Call for Evidence, which was launched on 6 June 2013.[173]

77.  In Denmark, wind farm developers must offer at least 20% ownership to individuals and communities living in the surrounding area.[174] Friends of the Earth argued that the UK should follow this example and should make a community ownership offer mandatory for all new onshore wind developments.[175] Rebecca Willis, Co-operatives UK, thought it might be premature to introduce legislation to this effect but that the Government "should make sure that developers know that they are serious about community ownership". She went on to suggest that Government could do this by saying "you can do it yourselves or in two years' time we will mandate it".[176]

78.  There are strong indications that some level of local ownership can help to boost support and reduce opposition to energy infrastructure projects. We welcome the fact that DECC is seeking to develop a more robust evidence base on this issue. If the evidence shows that local ownership does indeed improve acceptability, we recommend that the Government encourages the industry to offer a stake to local residents for all new developments (perhaps by revising industry guidelines such as the Community Benefit Protocol). If the industry does not respond, the Government should consider the option of making a community ownership offer mandatory for all new developments.

Community benefit payments

79.  Community benefit payments (which typically involve a developer making an annual payment to the local community) have been at the heart of industry and Government efforts to improve levels of acceptance among local residents.[177] Most recently this had led to a five-fold increase in community benefit from wind farms, increasing from £1,000/MW/year to £5,000/MW/year until new DECC proposals.[178] The shale gas industry has also recently come forward with a package of community benefits, including £100,000 per well in exploratory stages and 1% of revenues at production stage.[179] However, we encountered some scepticism towards the effectiveness of this approach; Alan Simpson argued that "it struggles to get beyond the sense of buying planning permission".[180] Witnesses expressed a preference for community ownership as opposed to benefit payments and suggested that the new guidance on onshore wind represented a "missed opportunity to support community and co-operative ownership more generally."[181]

80.  An alternative proposal was the idea that local communities should be able to benefit by buying the electricity from local energy projects at a cheaper rate than is otherwise available.[182] Friends of the Earth highlighted the practice of "community right of first access" to the energy generated, which applies to community energy projects in Germany.[183] Good Energy has recently introduced a discounted local electricity tariff for people living near to its Delabole Wind Farm.[184] Renewable energy developer RES has also launched a "Local Electricity Discount Scheme", which provides a minimum £100 annual discount to the electricity bills of properties closest to proposed RES wind farms.[185]

81.  There is some uncertainty about the ability of generators in the UK to sell the power they generate directly to local communities. The Solar Trade Association suggested that a generator by itself was unable to sell electricity to consumers unless they are also a licensed supplier.[186] Energy4All also told us that it was prohibited for community energy schemes to sell to the local community.[187]

82.  As matters stand, it appears that the theoretical benefits of local 'buy-in' being obtained by the supply of cheaper tariff electricity to residents in the vicinity of a project remain largely theoretical. However, several other witnesses noted Ofgem's "Licence Lite" arrangements, which are intended to allow distributed energy generators and small suppliers to enter into the supply market without facing all of the costs and complexities of interfacing directly with central systems.[188] As yet, no Licence Lite derogations have been issued, although a request from the Greater London Authority is currently under consideration.[189]

83.  DECC told us that it supported the "Licence Lite" proposals and that the Government has "proposed a power in the Energy Bill that would enable the Secretary of State to amend electricity licence conditions to ease participation in the wholesale market if required".[190]

84.  The idea of providing cheaper electricity to the communities living close to energy infrastructure projects has merit. It would provide a tangible and visible benefit to people living near to development sites, which could act as compensation for any negative impacts associated with the project (such as aesthetic impacts). We encourage the Government to monitor the various initiatives that are emerging in this vein so that it can assess which approaches are most successful. This includes discounted tariffs, discounted bills and any projects going forward with a 'Licence Lite' derogation. DECC should also investigate whether the Licence Lite route is accessible to community-owned projects and, if it is not, should consider exercising the powers that have been proposed in the Energy Bill to amend electricity licence conditions.

163   DECC, Press release, "Onshore wind: communities to have a greater say and increased benefits", 6 June 2013, www.gov.uk Back

164   DECC, Press release, "New office to look at community benefits for shale gas projects", 20 March 2013, www.gov.uk Back

165   Ev w48 (Wood), Ev w24 (RES), Ev w22 (Orkney) Back

166   Ev w8 (SEG), Ev w22 (Orkney), Q 35 Back

167   Q 35  Back

168   Ev w62 (FoE) Back

169   Ev 75 (Co-op Group)  Back

170   Ev 63 (Community Energy Scotland), Ev w48 (Wood) Back

171   Ev w8 (SEG), Ev 36 (Cornwall Council), Ev w22 (Orkney), Ev w54 (Simpson), Ev 54 (UKERC), Ev 75 (Co-op Group), Ev 27 (OVESCO), Ev w8 (Basi), Ev 63 (Community Energy Scotland), Ev w62 (Friends of the Earth), Ev w48 (Wood), Ev w74 (ResPublica) Back

172   Ev w24 (RES) Back

173   Ev w43 (DECC), DECC, Community Energy Call for Evidence, 6 June 2013  Back

174   Ev 54 (UKERC) Back

175   Ev w62 (Friends of the Earth) Back

176   Q44(MsWillis) Back

177   Ev w32 (REG) Back

178   DECC, Press release, "Onshore wind: communities to have a greater say and increased benefits", 6 June 2013, www.gov.uk Back

179   DECC, Press release, "Estimates of shale gas resource in North of England published, alongside a package of community benefits", 27 June 2013, www.gov.uk Back

180   Ev w54 (Simpson) Back

181   Q 73 [Colin Baines] Back

182   Ev w8 (SEG), Ev w54 (Simpson) Back

183   Ev w62 (Friends of the Earth) Back

184   Ev 84 Back

185   http://www.res-leds.com/  Back

186   Ev w68 (STA) Back

187   Ev w40 (Energy4All) Back

188   Ev w35 (Heat and the City), Ev 45 (Cornwall Energy), Ev 63 (Community Energy Scotland), Ev w43 (DECC) Back

189   Ev 45 (Cornwall Energy), Ev w54 (Simpson) Back

190   Ev w43 (DECC) Back

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© Parliamentary copyright 2013
Prepared 6 August 2013