Communities’ struggle for green energy infrastructure ownership

With political parties placing community ownership of renewable energy at the heart of their election agendas, the question remains: why is it so difficult for local groups to secure a meaningful stake?

As reported by Rhiannon Davies for the Power Shift, just one community-owned wind turbine, Tilley, in the Hebridean island of Tiree has generated since its commissioning in 2009 £4 million for a community of 650 people, funding harbours, childcare, youth services, housing, broadband, a petrol station, business units and more. But, after multiple repairs, Tilley is now uninsurable, and a serious failure would wipe out Tiree’s Trust’s main income stream. They need more core funding to avoid the worst case scenario and are exploring solar arrays as a more reliable source of income.

On the island of Yell (Shetland), the local community borrowed £8.3m to build 5 wind turbines at Garth in 2017, now generating 4.5 MW. This was a huge risk, but so far it’s paying off, with the profits from energy generation being invested in housing, an industrial estate, marina, local shop, community hub, community lunch club, local youth club, community vehicle, grant scheme, and more.

These two projects exemplify how community-owned energy can generate up to 100 times more wealth for local people than privately-owned wind farms. However, setting up a project like this is not easy, and on top of the skills and capital needed in early stage project development to engage with developers and navigate complex regulation, there are two main hurdles: community access to finance and grid connection.


Speaking to Shetland News, North Yell Development Council development manager Alice Mathewson said, “Now, there are a number of potential projects trying to replicate what we have done but they can’t get a look-in, because there’s no space for them to connect to the local grid. We can’t expand, either, for the same reason.”
Fios reports how on Lewis, community developers such as Urras Oighreachd Ghabhsainn (UOG) are being squeezed out of the planned 1,800MW SSEN interconnector between Stornoway and Ullapool. “Demand has now outstripped the capacity available even though the interconnector is still five years away”, says Neil Mackinnon, Development Manager at UOG. And without reliable grid access, communities are far less likely to secure investment.


Financial hurdles, complex regulation, and the absence of consistent national support have kept communities at the margins and owning only around 1% of all renewable energy generated in Scotland

One solution would be to introduce mandatory community allocations or “community first rights” on new grid capacity, ensuring local projects are not pushed aside by corporate-scale proposals.


Tiree currently produces far more electricity than it uses, yet residents can’t buy power directly from their own turbine. Tilley’s output must be sold to an energy supplier, which then sells it back at a profit. To change this, the Trust is developing a local energy co-operative, but current regulations limit the scheme to a single transformer, so the pilot will be small, and there are also technical issues to solve, such as finding a supplier willing to facilitate the scheme, agreeing a pricing structure, and completing the island’s long-delayed rollout of smart meters.

Ownership models


There are three community and local authority ownership models: split ownership, in which the community is the owner of a physical section of the project (e.g. one turbine within a wind farm); joint venture, offering a joint ownership of the project and opportunities for local representation and decision-making; and shared revenue model, preferred by developers, in which communities receive the opportunity to purchase a share of revenue without ownership per se. 


The latter would be more or less in line with what was offered to the communities of Lairg, Creich, Ardgay & District, Kinlochbervie, Scourie and Durness. Sallachy Wind Farm, consented in 2022, offered a 5%-10% stake to these communities. The offer was a junior share of the debt rather than equity. After extensive rounds of negotiation, it was deemed that the potential profits of this multi-million investment did not outweigh the risks and the return would be no better than the current model of community benefit fund.



Push for a new deal


The Scottish Community Coalition on Energy, formed by Community Energy Scotland, Community Land Scotland, and Development Trusts Association Scotland, is advocating to maximise the positive impacts of the renewables revolution by asking policy-makers to:

• Increase Community and Renewable Energy Scheme (CARES) funding for community energy to £15m/year. 
l Consult on amending planning legislation to include the principle that “applications for energy developments that will be fully or partly community owned will be prioritised over applications with no community ownership.”
• Allow local authorities and other public bodies to buy energy direct from community energy groups.

• Create more space for community energy on public land.

• Establish a Scottish Community Wealth Fund.


Their manifesto, published in September, follows last year’s Highland Council “Social Value Charter”, which sets an expectation from developers to offer £7,500 / MW instead of the current £5,000, provide legacy housing, and give communities “the opportunity to participate in an integrated shared ownership model”, among other measures. In November it was announced that SSEN Transmission had become the first company to sign the Charter. 


Last October, the Scottish Government announced a pilot scheme which gives communities the chance to lease one of 10 publicly-owned Forestry Land and Scotland sites with windfarms as they approach repowering. 


In Denmark, by 2016, over half of the country’s installed wind capacity was owned by citizen ownership models (individuals and cooperatives). The growth was made possible by changes in legislation. Since 2009, the Danish Renewable Energy Act has required at least 20% ownership for all new wind projects. This shows what could be possible in Scotland.

This article is part of The Power Shift – a collaborative investigation by 10 independent, community-based publishers across Scotland, exploring the impact of the green energy transition on communities. Co-ordinated by the Scottish Beacon and supported by the Tenacious Journalism Awards, the project aims to amplify local voices, facilitate cross-community learning and push for fair, transparent energy development.