Andy Paterson on how initiatives led by local businesses and social enterprises could be the future of energy across Scotland
The stretch to achieve net zero by 2045 is getting shorter, as energy demands in Scotland increase due to the use of new technologies becoming more widespread and record high energy bills.
It does seem like to reach net zero and have affordable energy bills are polar opposites.
However, if we look at what we already have in Scotland, with our social enterprises producing and selling clean energy through wind turbines, the answer to this problem may be right in front of us.
Scotland has always been incredibly lucky, with its landscape and its natural resources being particularly energy rich. In the previous century we had an oil and gas boom and now we are dealing with the consequences of that extraction. However, this is Scotland’s second energy chance and one that should not be squandered. It is a fantastic opportunity to create green energy that is bought sold to fund our communities.
Aquatera produced a report on Point and Sandwick Trust, comparing the benefits received by a community when a local wind farm is owned privately or by the community. These are benefits that are outwith the usually associated bonuses of a business operating in the community, eg job creation.
The report found that “in terms of sheer size, the benefit payments from community owned wind farms far exceed the payments from private wind farms. Even the community owned wind farm with the lowest average donations on a pound per installed MW per annum basis that we studied is still 15 times more beneficial than the most recent standard of £5,000 per installed MW recommended by the [Scottish] Government for their privately owned counterparts”.
At the lowest end of the scale, community owned wind farms were 15 times more beneficial. This is a phenomenal statistic, especially with the increased importance of renewable energy across Scotland. The social enterprise model is perfect for contributing to this uptick in community ownership. Not only are these organisations giving a social benefit, but also clearly an environmental one. It isn’t just our rural communities who are benefiting from community energy.
A new community energy project has been confirmed in East Lothian, across Musselburgh and Portobello. The project aims to deliver community energy via solar and battery systems installed across participating local buildings.
These initiative projects, led by local businesses and social enterprises, could be the future of energy across Scotland. This project in particular was funded by Local Energy Scotland, and these funds are absolutely vital to ensure community operated energy is consistent throughout Scotland. This will take funding from the Scottish Government and the new UK Labour government.
From the UK Government this could come from GB Energy. GB Energy is an investment body and publicly owned energy generation company that Labour revealed in the 2024 manifesto. It will take time to create an energy company without nationalisation of the big six currently operating in the UK. However, as an investment vehicle it could operate as a conduit for funds for local communities who are serious about owning the energy they use and can sell back to the grid.
Not all communities are created equal when it comes to their ability to create energy. To make community energy a benefit to everyone who lives in Scotland there needs to be a system of sharing the funds generated by our renewable energy.
A National Community Wealth Fund for Scotland would be a way of achieving this. This wealth fund has been proposed by Community Energy Scotland, Community Land Scotland, Scottish Community Alliance, Development Trusts Association Scotland and Scottish Communities Finance. This proposal, I believe, could have the potential to exponentially grow energy ownership amongst communities in Scotland.
A wealth fund that any community in Scotland could access would be incredible. With a dedicated percentage to safeguard long term investment into our communities, it would provide stability and confidence for years to come. If we think of the profit margins that the energy industry giants like Shell or BP make every year, even if a fraction of that was being used by our communities and social enterprises instead of going to shareholders, it would be difficult to imagine the social and environmental good that could be achieved with such investment. Social enterprises could be subsided by this for providing the social and environment good that we champion.
Scotland is moving to become a renewable energy leader and we cannot let the same mistakes of the past haunt us and leave our communities without the benefit they deserve, as happened with our mining sectors and is currently happening with our oil and gas industry.
Renewables give us these new opportunities and we have to make sure we support our communities in making sure that energy is owned by all of us to benefit all of us.
Andy Paterson is a policy officer at Social Enterprise Scotland.
