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FERGUS EWING: People can have a stake in Highland wind farms they look at – here's what has to happen

By Fergus Ewing

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Wind farm in Highlands.
Wind farm in Highlands.

With many predicting that the Highlands will become the centre of renewables activity in Scotland, what benefits will actually accrue to Highlanders?

Yes, there will over time, be jobs and opportunities created, and that is welcome indeed. However, the benefits – economic benefits – from the wind farms whether onshore or offshore will ultimately benefit the investors and the UK Exchequer.

We have seen that happen with oil and gas over the past half-century.

Without politicising this unduly, the contrast between Norway and the UK is stark. The former invested some of the tax proceeds from their oil and gas, starting in the ‘90s – and indeed in the first five years of the existence of their Sovereign Wealth Fund very little was paid in. Yet the Norwegian fund is now so rich that it holds about one per cent of the world’s shares.

As I write this column, the finance committee of the Scottish Parliament, one of the more assertive committees, has just criticised the Scottish Government for a lack of longer-term thinking. Were the Scottish Government to launch a major campaign to demand that a wealth fund be set up, by the UK government, utilising a certain proportion of tax receipts from wind farms operations, would that not lead to a debate which would look to the longer term, and invest in a fund for our children and grandchildren to benefit?

At the same time, the heating and lighting bills for most folk in the Highlands are higher than the rest of Scotland. Yet many of us can look out onto the turbines in our landscape, that are generating energy – and wealth. Some community benefit is paid – and the going rate remains £5000 per megawatt per annum in many cases. Some others pay zero.

The Scottish Parliament lacks the powers legally to require payment to communities of a benefit.

Better than a fixed cash payment is a share in ownership of each farm. Indeed, we are considering a petition on this topic in the committee I serve upon. Though we cannot legislate that each community acquire a share, we could easily “strongly encourage” developers to enable this to be done. If, say, they plan a 20-turbine farm we could seek that this become say, 22, with two turbines being paid for and owned by the community. The company is no worse off. The method of financing the community owned turbines relies upon the income from the electricity generated.

The funding can come from a, say, 10 per cent contribution from the Scottish National Investment Bank (a grant or loan), and the balance of 90 per cent of the capital costs be met from commercial borrowings. The loan interest can be repaid from the revenue stream from the operations of the wind farm.

This scheme was in place when I was energy minister, with several lenders willing to take part. It was starting to work, when the UK government stopped it. But there is no reason why such a scheme cannot be dusted off again and implemented.

It’d mean that people have a stake in the wind farms they look out upon.

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