Elected Member Briefing Note - Renewable Energy: Net Economic Benefit and Community Benefits

About this Briefing Note

Details

Purpose

In a workshop for members on the Evidence Report for Local Development Plan 3 on 19 June 2025, further information was requested on Net Economic Benefit as set out in National Planning Framework 4 Policy 11(c) and Community Benefits. The information is to provide relevant policy and guidance documents to enable a full understanding of both aspects to inform the potential development of local policy in LDP3. Further information on an additional question relating to Conservation Areas is also provided

Briefing Information

Net Economic Impact

National Planning Framework 4 (NPF4) Policy 11(c) states that proposals will only be supported where they "maximise net economic impact, including local and community socio-economic benefits such as employment, associated business and supply chain opportunities."

NPF4 Policy 25 Community Wealth Building states that proposals consistent with local economic priorities will be supported including actions and opportunities to build local skills, support local businesses and deliver community ownership. Scottish Renewables has produced draft guidance and Scottish Government is anticipated to release guidance on Policy 11(c).

The draft PKC Renewable Energy guidance asks for a statement to be produced in accordance with the framework set by Policy 25. To facilitate delivery by developers it is important that local priorities are available to developers. Local Place Plans, Community Action Plans and the Council's Local Heat & Energy Efficiency Strategy and Local Area Energy Plan will all help identify priorities and potential pathways for developers to support. Note that anything asked of development as part of a planning approval as set out in Circular 4/1998 (and NPF4) must be:

• Necessary
• Relevant to Planning
• Relevant to the development
• Enforceable
• Precise
• Reasonable in all other respects

This means that net economic benefit actions set out or required should only be those that are relevant to the effects of the development and not additional and not a disproportionate burden. Additional voluntary measures are addressed through community benefits.

Community Benefits

Community benefits from renewable energy are a voluntary payment to communities with good practice guidance available and currently under review. The guidance helps developers and communities reach communities and develop governance.

Support and advice are available from Local Energy Scotland. The Good Practice Guidance, and the Chief Planner, make clear that community benefits are not a material planning consideration. This means they cannot be considered as part of a planning application.

Currently the good practice guidelines recommend £5000 per MW index linked, and the Onshore Wind Sector Deal signed by the Scottish Government and industry commits to implementing those guidelines for wind. While other technologies are covered by the guidance, the Scottish Government recognised in a recent consultation that they would like to see contributions from solar farms increase, and asked whether transmission infrastructure, bioenergy and battery storage (BESS) not currently explicitly mentioned by the guidance, should be included. A response to the consultation has not yet been published.

Note that community ownership or part ownership of schemes is a Scottish Government priority and can be offered as part of a community benefit package.

Typically, ownership is not a planning consideration, however NPF4 Policy 25 states that "Development proposals linked to community ownership and management of land will be supported". Renewable development on land that is within the ownership of communities could therefore be supported in planning.

While not part of planning there are opportunities for support for communities to engage with developers. Community Councils have begun collaborating to form consortiums to negotiate with developers on future wind farms. The Sustainability Group of seven community councils affected by recent wind farm applications in the Ochils have an agreement to collaborate on negotiation with developers to secure the best community benefit for their communities.

Two of the four turbines at Binn Farm are community owned. This initiative was led by a community group Glenfarg Renewable Energy Association with support from Local Energy Scotland. A community benefit company owns the turbines with profits benefiting applicants from 3 community council areas via a fund administered by Foundation Scotland.

Outside of the planning system there are options for Local Authorities to set out expectations either where they are leading on negotiations or in agreement with developers.

Highland Council produced guidance in 2013 for communities and developers setting out the amount and application of community benefit (cash payment). This is not planning guidance but applies where the Council is asked to negotiate on behalf of the developer or community and Highland Council. Funds were directed to local, area and Council wide funds for communities to apply to.

North Ayrshire also has a community benefit policy for renewable energy developments and administer an area wide and a local fund. A community benefits officer negotiates with developers and aims to promote delivery of community action plans.

In 2024 Highland Council agreed to establish a Social Value Charter for Renewables Investment which sets out the expectations from investors in renewable energy including an additional £7500 per MW into a central strategic fund in addition to the £5000 per MW direct community benefit. Other elements of the charter are to provide housing to accommodate workers, promote community ownership and provide opportunities to support local projects. It is recognised that committing to the charter is still voluntary and requires engaging and negotiating with investors separately to the planning process.

Historic environment:

Impacts on the historic environment are a consideration that proposals for renewable applications must address in NPF4 Policy 11(e)(vii) Energy. Policy 7(a) Historic Assets and Places requires that development proposals with a potentially significant impact on historic assets or places are required to provide an assessment on the likely visual or physical impact of any proposals; and Policy 7(d) requires that development proposals in or affecting conservation areas will only be supported where the character and appearance of the conservation area and its setting is preserved or enhanced. There are permitted development rights for solar panels which do not face the street front but will otherwise require planning permission in conservation areas.