Utility Week

Utility Week 8th November 2013

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Page 13 of 31

Policy & Regulation Market view Benefit culture At a time when more energy companies are being told by Decc to promote community benefits, Karl Smyth asks whether it's an approach the public actually supports. C ommunity benefits are, without question, emerging as the policy of choice at the Department of Energy and Climate Change (Decc). Promoted predominantly by onshore wind and waste developers for a number of years, in recent months we have suddenly witnessed the government roll out benefit guidelines for companies operating in onshore wind (calling for a five-fold increase), nuclear and unconventional oil and gas. There is no reason to believe that other technology providers will not be asked to fall into line. The political case for promoting community benefit is, on the face of it, compelling. With the UK's energy infrastructure ageing, communities around the UK are increasingly coming into contact with energy companies looking to build new, or overhaul existing, generation capacity in their area. It seems logical, therefore, that people should benefit from hosting developments in their local area. Furthermore, a standardised, formalised approach should help to ensure that the level of benefit is consistent across each community. However, the track record of community benefits in the UK has been far from perfect. As onshore wind developers already know having piloted the concept for a number of years, it can be challenging to ensure that those who are affected most by projects are those who actually receive the associated benefits. And too often the benefits themselves have been characterised by some as a cynical bribe by developers who use them to buy local support for their projects – due in part to companies failing to engage meaningfully on the issue. So while community benefits as a policy may be popular in the corridors of power in Westminster, are they the solution the public wants? To investigate this further, PPS undertook a comprehensive study with Atomik Research into the acceptability of energy developments in the UK, including a representative sample of 2,000 respondents from across the country. The results were illuminating. Despite the increasingly polarised nature 14 | 8th - 14th November 2013 | UTILITY WEEK of the energy debate in the UK, 85 per cent of respondents agreed that every community in the UK should play its part in using domestic energy resources to help the country meet its energy needs. This suggests that messaging from both industry and government around the UK's energy trilemma and the need for security of supply has achieved some resonance with the public. However, as with any form of development, the magnanimity of respondents varied dramatically when asked to consider the acceptability of different energy developments if built in their back yard. Renewable technologies fared particularly well on this question, with over 80 per cent of respondents deeming solar farms acceptable for their area, closely followed by onshore wind and energy from waste. In contrast, nuclear and open cast coal mining were both adjudged to be personae non grata, with acceptability hovering around the 40 per cent mark. This may make for difficult reading for Ed Davey and his colleagues at Decc, who have dedicated significant time and political capital to finalising a strike price for new nuclear and securing Far Eastern investment into the sector. Having established the baseline level of public satisfaction with a range of energy technologies, we also looked at how effective community benefits were in bolstering local support. The headline finding from this research is that there is a large chunk of people – nearly 40 per cent – who genuinely believe that community benefits can make a positive contribution, provided the package is targeted to meet the community's needs. In contrast, 24 per cent of people took the hawkish view that community benefits are glorified bribes, while 21 per cent of people viewed them as a positive mechanism for sharing economic rewards. So if these people represent swing voters in local communities around the UK, what can and should energy companies be doing to win their support? That answer becomes increasingly clear when you ask people what type of benefit they actually want. Unsurprisingly at a time of rising energy costs, 65 per cent of respondents said the prospect of a subsidised energy bill would make them more likely to support an energy development in their area. While UK energy companies have largely shied away from this option to date, in the past 12 months we have begun to see a small number of companies such as ASC Renewables and RWE (disclaimer: both clients of ours) pioneering this approach to good effect. Who is most responsible for maximising community benefit from energy projects?* 35% 26% *Numbers do not add up to 100 per cent. 'Don't knows' and 'none of the above' not included 11% 7% Local authority Community hosting the project National government Energy company 6% Local politicians

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