The Scottish Government wishes to maximise the benefits for communities from renewable energy. We believe that there is so much more a community can gain from renewables projects, over and above the energy generated and financial benefits. For example: increased community cohesion and confidence, skills development and support for local economic regeneration.
We aim to reach a target of 500 megawatts of community and locally-owned renewable energy by 2020.
- The Community And Renewable Energy Scheme ( CARES) is offering loans for the pre-planning costs of renewables projects in Scotland in the financial year 2011/12, with a budget of £5.35 million for supporting community owned projects and £2.4 million for supporting projects owned by land managers, farmers and SMEs. All projects are required to demonstrate a minimum level of community benefit to the local area. For the latest information, please contact Community Energy Scotland Ltd which is responsible for delivering the loans.
- The District Heating Loan Fund will begin offering loans to support the development of district heating networks in Scotland in the financial year 2011/12, with a budget of £2.5 million, this new scheme aims to provide loans for both low carbon and renewable technologies in order to overcome a range of infrastructural issues and costs of developing these projects. More information is available by contacting the Energy Saving Trust.
Loans and Revenue Support - Not Grants
Government support for renewables has made a transition from grants to loans and revenue support. Whereas previously the main mechanism of support from the Government was through the provision of grants, the emphasis has now changed to support electricity generation projects through a Feed-In Tariff (FIT) or Renewables Obligation Certificates (ROCs), and a similar Renewable Heat Incentive (RHI) is also planned for introduction in late summer 2011. These incentives enhance the financial value of the actual energy generated by a project to make it more attractive for private sector investment.
Installations which have received any public funding or "State Aid" towards the capital costs of purchasing and installing the equipment are generally not eligible for the FIT unless the grants are paid back. This restriction applies to any grants given from public funds for this installation of the equipment in question, it makes no difference if the organisation which received the grant is different to the organisation which wants to claim the FIT. For example, if an installation is sold by an organisation A to a third party B, that third party B will be unable to claim the FIT until all the state aid (e.g. grant funding) which was given to A for the installation of the equipment has been paid back. Under the Renewable Heat Incentive, the rules are stricter - you cannot receive a grant which contributes to the direct costs of an installation and then receive the Renewable Heat Incentive - paying back the grant would not change this.
Operation of the FITs and the RHI is a matter reserved to the UK Government. Therefore policy on this is led by the Department for Energy and Climate Change (DECC) and administration is handled by Ofgem, which has published a guide to the FIT. Any queries should be directed to DECC, Ofgem or your energy supplier.
Community Renewable Energy Toolkits
The Scottish Government's Community Renewable Energy Toolkit aims to encourage and help communities considering how they can benefit from renewable energy projects, whether led by communities themselves or through partnerships with others. It contains information, advice, details of possible funding sources and suggestions of where to go next to get help.
A related resource is the publication Delivering community benefits from wind energy development: A Toolkit from the Renewables Advisory Board set up by the UK Government (relevant to projects in Scotland as well as Northern Ireland, Wales and England) which focuses on making community benefits from commercial developer-led projects more systematic and routine. The UK Government has also published details of Bankable Models which Enable Local Community Wind Farm Ownership in 2007.
The following Scottish Local Authorities have produced their own toolkits on community benefit:
Advice and Support
The Scottish Government has established the Community And Renewable Energy Scheme (CARES) which provides eligible community groups with free advice and financial support for renewable energy projects. The scheme is managed for the Scottish Government by an independent company with charitable status, Community Energy Scotland Ltd, which is the main point of contact for enquiries. CARES Development Officers can also let you know about other financial support schemes or help that might be relevant.
Related Scottish Government publications
The Scottish Government commissioned SAC Consulting, part of the Scottish Agricultural College, and Community Energy Scotland ( CES) to produce an initial business case for a community and landowner Loan Fund.
The Community Empowerment e-Newsletter is available. A previous issue highlighted four inspiring examples of how communities across Scotland have become empowered, including Neilston Renaissance, Friends of the Birks Cinema, Cumbrae Community Development Company and The Bambury Centre.
The Rural Funding Opportunities Guide gives a short description of funding sources with suggested contact points for further enquiries.
The Scottish Government has issued guidance for planning authorities on the use of planning agreements in Planning Circular 1/2010: Planning Agreements.