The Scottish Government

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7. Distributed Energy and Community Based Schemes

Objective: To promote distributed energy systems to promote renewables as well as wider energy targets, and to maximise the benefits for communities from renewables.

• We are keen to promote the development of distributed energy systems to deliver renewable as well as wider energy targets;
• The Scottish Government wishes to maximise the benefits for communities from renewable energy;
• The Scottish Government is developing guidance, including good practice information, for communities and developers on models for community renewables;
• The Scottish Government is refocusing the community stream of the Scottish Community and Householder Renewables Initiative ( SCHRI) in the short-term towards projects with direct community engagement and benefit;
• For 2009/10 we intend to develop a community support scheme to be tendered across Scotland, focussed on direct community engagement and encouraging renewable heat;
• The Scottish Government is supporting a study of how to develop renewable energy on the Western Isles in a manner compatible with environmental objectives.

The community of Fintry, off the gas grid and north of Glasgow, is beginning to see tangible benefits from its involvement in the local Earlsburn wind farm development which went operational in the summer. Having invested in an additional turbine for this commercial scheme, the community is now starting to earn revenue, and is already able to offer all villagers the opportunity to insulate their attics and cavity walls free of charge. Other plans in the early stages of development include domestic ground source heat pump installations for local householders, a biomass boiler for the well-used community and sports facility which currently relies on heating oil, and the formation of a suitable service ( ESCo) model to deliver these new technologies sustainably. The community will be showcasing its achievements in the Fintry Renewable Energy Show ( FRESh), in May 2009.

Introduction

7.1.1. It is important to consider the development of renewable energy in the context of the significant changes to the way in which energy is produced and consumed within our communities. It is particularly important to recognise that the industrial model of centralised production, distribution and supply of electricity which dominated our perception of energy systems in the twentieth century is being replaced by a more decentralised system which is more attuned to local and individual needs. This offers significant opportunities for efficiency gains through the development of a range of approaches such as distributed energy, smart grids and community-based production and supply. This section describes a number of initiatives in this area and seeks views on how these approaches can reinforce our goals in respect of sustainable energy.

7.2 Distributed Energy

7.2.1. Distributed Energy ( DE) is the local supply of electricity and heat which is generated on or near the site where it is used. In practice it is delivered as a package of energy efficiency and energy supply measures and covers a range of technologies at varying scales from the household to the community, which can generate electricity and heat from renewable or fossil fuel energy sources. Distributed Energy in its widest sense currently accounts for just under 10% of electricity supply. This figure includes all generation that is linked to the electricity distribution networks, regardless of fuel or size. ¹⁵ The contribution of renewable community DE is thought to be very low at present ¹⁶; indeed the lack of precise figures illustrates the immaturity of the sector. However, the number and variety of sites that could be utilised for generation make clear that community DE has potential to make significant contribution to renewable energy and carbon reduction targets.

7.2.2. Distributed Energy has a number of important attractions:

• By opting to use a distributed, local solution to their own energy needs householders, communities, businesses and schools can move from being passive users of energy and become producers making an active contribution to energy and climate goals. For many this is an attractive proposition; the step beyond energy efficiency towards truly more sustainable living.
• Alongside energy efficiency measures, DE has a crucial part to play in reducing the carbon impact of the built environment. Energy generation technologies can be integrated into the fabric of buildings as they are built; retrofitted to existing buildings particularly those where energy efficiency measures such as double glazing or cavity wall insulation are not suitable; or installed near the point of use on waste land, nearby roofs or outdoor spaces such as car parks.
• Microgeneration technologies can be installed and connected relatively quickly, particularly where recent changes to rules on household permitted development apply. When considering the need to meet renewables targets this takes on added importance as larger renewable developments can face greater challenges in terms of planning, infrastructure investment.
• DE can help in tackling fuel poverty, particularly as the fuel-poor tend to be heat-poor. Household heat technologies such as solar water heating cut the amount of energy the consumer needs to buy, so also cutting their bills. Once installation costs are covered, there are good examples of positive benefits for the fuel-poor. ¹⁷
• DE can increase the efficiency of fuel use, as the losses that occur in transportation are reduced, ¹⁸ leading to lower generation requirements and consequently lower carbon emissions.
• DE brings valuable diversity to the energy mix, encompassing a range of technologies taking their energy from the sun, the wind or the earth; to meet the energy needs of homes, schools, supermarkets or hospitals; that can be owned and operated by householders, small businesses or local authorities.

While these are strong arguments, there is still much more information required on the carbon and cost benefits of distributed energy. The UK Government is carrying out further research on this issue and the Scottish Government will consider this in developing future policy.

7.3. Community Renewables

7.3.1. The Scottish Government wishes to maximise the benefits for communities from renewable energy. Benefits which could accrue are socio-economic and could include local regeneration and the development of skills capacity, as well as enhancement of social confidence, energy awareness, community cohesion and partnership working, and the mitigation of fuel poverty.

Proven Energy - small wind systems

Gordon Proven deservedly won the Scottish Renewables Green Energy Awards Outstanding Contribution to the Industry last December. Proven Energy, based in Ayrshire, has been designing, developing and installing durable small wind systems since the 1980s and has been a real success story not just in Scotland but also in some of the most remote places in the world. You can find out more at www.provenenergy.com . The picture used is from Cumbernauld primary School, North Lanarkshire.

Four 6kW Proven wind turbines helping to provide 24 hour power on the Island of Eigg

7.3.2. The level of benefits, and indeed the level of risk incurred, depends largely on the models of ownership deployed, and to date these have ranged widely. Models for community renewables include:

• 100% ownership by a non-profit distributing community body, as in the Isle of Gigha Heritage Trust, or nearly 30 projects being developed across the north of Scotland by Community Energy Scotland, formerly the Highlands and Islands Community Energy Company ( HICEC);
• the voluntary community benefit "windfall" payment offered by commercial developers, as in the Hadyard Hill Wind farm owned by Scottish and Southern Energy. This model does not necessarily entail any local ownership;
• mixed ownership - via a community body and co-ops (as in Findhorn - which has a private wires network);
• mixed ownership between public and private developers (as promoted by Energy 4 All and Fintry Frostfree);
• the joint venture model proposed by Viking Energy in Shetland.

7.3.4. Community Energy Scotland ( CES) has quantified the potential benefits to be gained from the encouragement of small-scale community renewables in Scotland over the next 10 years as potentially comprising 10,000 community buildings (including schools), up to 100 small-scale wind farms, 40 hydro schemes and 50 district heating schemes. Such development could cost about £200M over the next 10 years but would result in annual energy cost savings of nearly £50M and an annual income to communities of over £30M, to the benefit of up to 2 million people. It is clear from CES's estimates that the main benefits are socio-economic, and could help regenerate local communities; with a lesser impact in terms of generation capacity and contribution to the national renewables target.

7.3.5. Clearly there are a number of different models for community engagement in renewables which entail varying degrees of impact and risk: commercial windfall payments attract the lowest risk to communities, although the rate of financial benefit offered under this model (usually £2,000 per MW) would put a 50 MW "commercial" development on the same rate of return to a community as a 1 MW development under a fully community-owned model. Developers may engage with communities, or communities may take forward their own projects without developers.

7.3.6. The Scottish Government recognises that there is a need to differentiate in policy terms between community benefits and community ownership - related to the different models above. We also believe that, with some notable exceptions, very large scale commercial developments, while bringing community benefits, should be seen primarily for their contribution to the climate change agenda. These are commercial-scale power stations contributing to achieving Scottish renewable generation targets. By comparison, small scale developments will not impact significantly on renewables targets, but can allow more direct engagement with the local community. As such, they should be viewed within the rural development context: community-scale wind farms provide an opportunity to mobilise Scotland's social economy to local socio-economic benefit.

7.3.7. The Scottish Government has more than doubled its budget for community renewables over the next 3 years and will be focussing on signposting for communities on how to make these developments happen and who can help them, as well as developing clear and stable funding mechanisms. We intend to:

• Develop guidance, including good practice information, for communities and developers on models for community renewables;
• Refocus the community stream of our Scottish Community and Householder Renewables Initiative ( SCHRI) in the short-term towards projects with direct community engagement and benefit;
• Develop (for 2009/10) a community support scheme to be tendered across Scotland, focussed on direct community engagement and on renewable heat.
• Fund two Schools Renewables Development Officers to work with local authorities increased uptake of micro-renewables in schools to reduce carbon emissions and energy costs and raise awareness of sustainable energy issues through educational opportunities

Windygoul Primary School, Tranent, East Lothian. Winner of the 2008 Carbon Trust Low Carbon Building Award.

The single storey new school, opened in August 2007, was specified to ensure pupils benefit from a healthy learning environment which makes use of natural ventilation and minimises energy usage. Environmentally friendly features include a green 'living roof' of sedum which provides superb insulation, keeping the building warm in the winter and cool in the summer. Photovoltaic glazing has been incorporated into the glass conservatory style roof in the dining hall, providing a 17kWp array to help heat water and provide electricity. Special control panels allow pupils to monitor the amount of electricity being used. Windygoul shows that high quality low carbon buildings can provide light and airy learning environments that give youngsters the best start in life.

7.3.8. Smaller, community based housing associations can play an important role in delivering local renewable energy schemes with community development benefits. Both local authorities and housing associations may also be well placed to facilitate the setting up of small and medium-sized renewables projects linked to housing that offer benefits in terms on emission reduction, and contributing to our renewables targets. They own and/or manage groups of properties, are used to working with local communities and many of their residents are on low incomes and thus may be in fuel poverty and in need of the benefits renewables can bring. Some have already developed renewables pilot projects or are keen to do so.

Easthall Park Housing Co-operative - Wind Turbines

Easthall Park is a small fully mutual housing co-operative based in Easterhouse in Glasgow. Earlier this year the co-op put together a funding package from range of sources to purchase two wind turbines. The turbines are sighted in Glenburn Park (owned by the co-op) and are now used to provide 40% of the energy requirements needed by the Glenburn Centre (a local community facility owned the co-op and managed by a committee of local residents. Each turbine cost approx. £58,000 and a contribution of £6,858 was made towards the cost of the turbines by the Wider Role fund. However funding was secured by the co-op from a number of sources including the Energy Saving Trust.
http://www.easthallpark.org.uk

7.3.9 It will be up to local authorities and communities across Scotland to take forward their own approaches to this area in line with this general framework. But the Scottish Government, in recognition of the special environmental and economic circumstances which apply in the Western Isles, is supporting (as at October 2008) a study to assist in the economic and community development of the Outer Hebrides in a manner consistent with conservation obligations.

7.3.10. The key objectives of the study are to examine a range of scenarios for development in the Outer Hebrides and thence:

• to identify renewable energy potential, including the role of different scales of energy generation. It will seek to outline the extent, in scale and timescale, to which this potential can deliver economic and community development compatible with environmental obligations. In doing so it will consider ownership models, their different impact on benefit to be realised and how these might be realised;
• to identify the other opportunities for sustainable development initiatives at different scales which might contribute to delivering economic and community benefit compatible with environmental obligations including opportunities which may arise from the management of habitat; and
• to produce a report and recommendations for action at a community rather than individual site level. The report will identify likely costs and benefits flowing from the recommendations.

7.3.11. The results of this study will be available in late 2008 and will be used to help frame future polices for the development of renewable energy in that area.

Questions for debate

• How can distributed energy systems be promoted in Scotland?
• Do you agree with the Scottish Government's proposed measures for maximising community benefit from renewables, including the production of guidance and the development of an improved grants scheme?
• What role can social landlords play in developing local renewable energy schemes and what is the best way of supporting and enabling this ?

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