mARCH 2012 36 Gillespie Macandrew and Ater Wynne www.lawyer-monthly.com

A Comparison between the USA and Scotland -

Renewable Energy: The Increasing Influence of Local Communities

In today’s challenging markets, energy lawyers must ensure that they appreciate the influence of local and indigenous community interests on a wide range of renewable energy projects.

T

he current focus on worldwide energy demands and security, coupled with

the drive for low carbon economics, has led to a far-reaching potential for remote communities to take their share of and, in some cases, take control of the dividends offered by the current ‘gold rush’ for renewable energy. Further, such communities may influence whether the projects will happen at all, or at the least influence timing or the clearance of regulatory hurdles.

Scotland’s rural areas, including the

remoter Highlands and Islands, and the Native American tribes across the USA provide examples of indigenous communities with a significant stake – and growing interest – in renewable energy development. There are many echoes in both areas of remoteness, high connection and transmission costs to reach power hungry markets, a huge stake perceived in environmental conservation, stable, long term revenues and enormous potential for Renewables, both onshore and offshore. But beyond the usual concerns for all projects such as commercial incentives and funding, regulatory consents and engineering issues, the influence of the local communities in general, and the legal rights of indigenous or protected communities in particular, may well ring bells with other remote areas of the world.

Scotland

Scotland's 100% Renewables target by 2020 is the most ambitious in the European Union. Most of Scotland’s potential is in the remoter onshore areas or otherwise offshore, requiring local land based servicing and maintenance centres, plus key construction and engineering development centres. Either way, the onshore Renewables developments, be they wind, hydro, biomass, geothermal or (yes, even in Scotland!) PV (Photovoltaic or ‘solar’), and the onshore servicing and development centres for offshore, may involve a wide range of community interests, from protected land use rights of Crofters (under

the Crofting Acts, effectively a right to farm small holdings and to share community grazings regardless of the ultimate ownership of the land itself) or other protected tenancy rights such as in agriculture, through to registered rights of community interest groups representing local and remote communities. Our planning and environmental assessment process also requires due regard be had to other community or national interests from impacts on local navigation, fisheries or other economic activities, until now seen to be essential to maintaining such remote settlements.

The Renewables interests and potential for

remote communities to control or sponsor development centre primarily around wind, with Anaerobic Digestion, Hydro and mixed wind/solar as well. Projects range from micro schemes around 50kilowatts (of which there are estimated to be 1400 potential schemes) to major schemes promoted by organized communities in the region of up to 50MW per scheme and then larger projects upwards of 300MW, impacting community and multi landowner interests. Offshore schemes at present have to be so large (upwards of 400 MW to over 1GW to be economically viable) that the community interests are those of consultees and those affecting, in the main, shore bases for operations and maintenance. However, as technology develops in tidal and wave schemes smaller local projects may come within the reach of community interest developers.

The policy aim of government and the

trend for protected and organised community interests is to seek ways to revive and invest in sustainable socio-economic development in remote areas, not just to add the odd sports facility or Community Hall, but to seed fund other economic activities and the necessary infrastructure to sustain such investment.

USA

Renewables accounted for about 10.9% of U.S. domestic primary energy production in 2010.

Except for federal agencies and facilities, the USA does not have a federal renewable portfolio standard (RPS) but the majority of states have binding RPS.

Native Americans (or American Indians) of

North America have huge land and energy resources (around 100 million acres in protected trusts or set aside) available for renewable energy projects primarily from solar, wind, hydro and biomass. The U.S. Bureau of Indian Affairs estimates that while Indian land comprises only five percent of the US land mass, it contains an estimated 10% of all energy resources. The National Renewable Energy Laboratory (NREL) has estimated that there is the potential for about 535 billion kWh/year of wind energy alone available on Indian lands in the contiguous 48 states, equivalent to 14 % of current U.S. total annual energy generation, and 17,600 billion kWh/year of solar potential on these lands, equivalent to 4.5 times the total U.S. electric generation in 2004. In addition, Indian Country will continue to play a growing role in transmission infrastructure throughout the nation.

Many tribes are already involved in energy

development. One California tribe has developed a 50 MW wind project and others are in the process of developing commercial scale solar PV and biomass projects. The legal community is actively engaged in helping tribes develop new business models to own and invest in energy assets, and to develop and produce power, either for consumption by their own people or for economic development purposes as a commodity for sale to utilities and industry on the wholesale power market.

The US Congress has responded to Native

America’s push for renewable energy development by introducing at least four important pieces of legislation that would eliminate barriers to renewable energy development on tribal lands and provide needed incentives.

Tribal interest in renewable energy projects will also likely be fuelled by each