Planning Your Project

This section of resource is about giving you the essential information required for you to plan your project. Click on the actions you are interested in to learn more.

Assessment of Need
Community needs assessment
Community consultation
Community development plan
Resources and Feasibility
Renewables options appraisal/feasibility
Yield analysis
Grid study
Screening/scoping opinion
Transport/access survey
Security over land

Community Needs Assessment

Before commencing on a project, you have to determine if there is a real need across your community for an energy generation project and / or a long -term source of revenue. What needs will the income from your project address?

It is essential to have a clear idea of the benefits of a project for the community and why it is needed - if not it may be difficult to keep volunteer effort on board as it meets difficult challenges. Insufficient local support can lead to opposition to the project so it is important that the wider community understand the benefits the project could bring.

Social needs that require financing might include, improvements in energy efficiency in local housing to reduce fuel poverty, funds for a community centre, investment in training facilities, employment of staff to take forward community projects or provision of facilities for young people.

There are several ways of demonstrating there is a need for your project:

1. Desktop research looking at local and national statistics. The Scottish Index of Multiple Deprivation will give you an indication of what the general needs are in your community compared to the rest of Scotland. Your Local Authority may have other statistics and reports which will help give you an overview of services and facilities in your area.

2. Community consultation. Ask your community what services and facilities are missing in your area and have them prioritise the ones they think are most important.

3. Surveying local organisations. Other community organisations and Trusts in your area may have statistics and other information you can use. For instance youth clubs and senior citizen organisations may be able to help you identify what services are most important or missing for those demographics. Sports and other interest-clubs will be able to help you understand if facilities need improving.

 

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Community Consultation

Community consultation is essential when considering a community developed and owned large renewable generation project.  Section 8, “Organisation, consultation and development planning” covers these topics; the following information is more specific to revenue generating projects. Local support will be essential to gain the commitment of volunteer effort and resources to progress such a project. This stage is also crucial in convincing funders that the community really wants the project. If the project is to benefit the community, the community has to have a say in how it progresses. The community will also, therefore, feel they 'own' the project in more than just the legal sense.

Community consultation should be used throughout the development of a project to determine:
Firstly if the community wants your organisation to undertake a feasibility study for a community renewables project on their behalf
Secondly, once you know what form the project will take (what technology the project is, size and location) ask the community if they still want the project to go ahead.

Thirdly, what does the community want to spend the income from the project on?

Consulting the community is essential in developing a strategy for the future of the community that is based on local needs and priorities and can be used to guide decisions around the investment of income generated from a project.

Before developing an income generating renewable energy project it is vital that the needs and wishes of the community are addressed and a community development plan is formed.

Relevant documents and links:
section 8

 

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Community Development Plan

For maximum benefit from large scale revenue generating renewable energy projects, community-wide development planning is invaluable, if not essential.
Equally, if there is an aspiration within a community to become more sustainable by using renewable energy to reduce the collective carbon footprint, then this process can help clarify and identify needs/opportunities. A community development plan will help the community to focus on the best way to address these.

However, if a project is such that:

  • it is not going to generate substantial investment revenue
  • there is presently a focus on one particular smaller scale project on a single site

Then the advantage of this process may not immediately be obvious. Nevertheless, it will probably still be a benefit to go through an equivalent process on a smaller scale to help produce a clear project development plan for any proposal. In addition, the process may uncover broader community needs or aspirations that inform the group’s work.

A Community Development Plan should help prepare a path for renewable energy development that:

  • best chimes with the community’s vision for the future
  • is supported by a group and the community it represents
  • will address key needs that a community has identified
  • ensures that any projects undertaken can clearly relate to the meeting of one or more of these needs

Many development trusts have been through such a process of community appraisal and have produced community strategies as a result. The Development Trusts Association Scotland can provide further information and may be able to put you in touch with trusts who have taken this approach. Visit www.dtascot.org.uk for contact details.

Further information can be found in earlier publications such as:

Why create a community development plan?

There are no set rules or structures as to what a community’s development plan should be. However, a well thought out community development plan should:

  • Identify key aspirations, needs and resources within a community
  • Check that proposed ways of meeting these are widely welcomed and actively supported
  • Create a clear strategy for involving the community in decisions on how local income is to be spent
  • Create a clear procedure and process for updating and reviewing spend priorities
  • Provide a good practical management framework and structure to turn general good aspirations into practical realisation of actual projects on the ground
  • Identify any resources, possible partners and timescales for making this happen

In addition to this, a good community development plan can also be a very useful tool for interacting with the wider community. It is especially helpful as a way of making sure activities remain in line with the aspirations of a community. It illustrates to potential funders and permitting bodies how activities and projects can really contribute to the identified needs within that community. It provides a tool to inform the community of the plans, provides evidence to funders that the community has shaped the plan and provides a means of measuring progress.
For examples of community development plans


Relevant documents and links:
www.dtascot.org.uk
http://www.alancaldwellassociates.co.uk/images/stories/docs/resourcebook.pdf
http://www.forward-scotland.org.uk/Library/Download-document/173-Community-Guidance-Developing-your-community-project-idea.html
http://www.decc.gov.uk/Media/viewfile.ashx?FilePath=What%20we%20do%5CUK%20energy%20supply%5CEnergy%20mix%5CRenewable%20energy%5CORED%5C1_20090721102927_e_@@_DeliveringcommunitybenefitsfromwindenergyATookit.pdf&filetype=4

 

 

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Renewables Options Appraisal / Feasibility Study

A typical resource assessment assesses the viability of a project in terms of the following:

  • initial renewable energy resource assessment
  • energy production
  • site location
  • environmental constraints
  • grid connection issues such as proximity and ability to export
  • likely infrastructure costs
  • likelihood of securing planning consent

With a good resource assessment, a community can make a considered judgment on whether it is worth taking the project any further. This prevents the community deciding not to proceed with a project after considerable time and expense (information on the Funding and Finance is given in the “Project Delivery” section of this knowledge centre). If the conclusion of the study is that a project is feasible, detailed development work can begin.

In addition to resource monitoring and to avoid extra work further into a project’s development, it’s a good idea to start to start discussions with some potential financial lenders to enquire about any requirements they may have – e.g. banks as they may have specific requirements in relation to anemometry, turbine suppliers, and consultants used for resource assessments.

If a resource assessment is to assess potential sites on land not owned by the community group it is advisable to contact the relevant landowners for permission before undertaking a feasibility study or options appraisal. If the community does not have a legal agreement with the landowner then the landowner can take over the project at any time, even once the community has planning permission. Before undertaking a feasibility study it is advisable for the community group to sign an options agreement with the landowner.

 

 

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Yield Analysis

Wind

For a wind project seeking to source project construction finance from commercial finance, a full wind analysis will need to be conducted. Having a good energy yield analysis allows you to prove to financial lenders that the project will be a feasible, revenue generating investment. The length of time you need monitor wind speeds varies depending on your supplier; most monitoring periods are within a range of 6 – 18 months. Once you have carried out the monitoring at your site, it is then correlated with local met office data with the aim of predicting longer term yields.  Typically, these predictions cover a ten year period. As well as financial lenders, turbine suppliers require the information gained from the analysis in order to assure their technology can meet the demands of the wind regime at the site.


The International Electrotechnical Commission is a body which certifies wind turbines to certain wind speeds and turbulence standards. Class 1A IEC turbines are the standard choice for high the wind speed sites, which are common across Scotland. If a site has a higher level of turbulence or wind speed than the standard Class 1A specification, a special certification may be required.

An industry standard meteorological mast will be required to gather this information. The equipment will need to be set up correctly on the met mast so that it is in accordance with international standards (Recommended practices for wind turbine testing: 11 - Wind speed measurement and use of cup anemometry, International Energy agency, 1999). Once it has collected, the data will have to be analysed and verified by an independent specialist - approved by the financial institution from which the community wishes to gain project finance. Please see the Scottish Renewables, and BWEA websites for a list of companies that can provide this service.

Note:  second hand meteorological masts and equipment may be available and also that meteorological masts can be sold on once wind monitoring is complete.

Hydro

Similar to a wind project, hydro projects will require a full energy yield analysis that gives an estimate of up to ten years energy production if they wish to source finance from commercial lenders. A flow duration curve or hydrograph will need to be established which gives information on the amount of flow on the river over a year. SEPA (Scottish Environment Protection Agency) has many gauging stations across Scotland and to access data on flow duration curves for gauged rivers you should contact the Centre for Ecology and Hydrology for more information.

For hydro schemes sited in rivers which do not have gauging stations, the community will need to undertake monitoring of the river or use estimations to create a flow duration curve. The consultancy service at HR Wallingford can provide flow duration curves from modelling and using catchment rainfall information - please see http://www.hydrosolutions.co.uk/lowflows.html.

Once the available resource has been assessed it will then be important to ascertain what the overall power potential will be with annual variations in water flow while keeping within environmental restrictions. A portion of flow from a river will need to bypass a turbine scheme so that the ecology of the natural river is maintained. SEPA will give guidance on what this level will need to be. Resource assessment may be best achieved by working with a hydro consultant and physically examining the proposed development to ensure the project would maximise the potential resource and utilise all available geographical features.


Relevant documents and links:
Centre for Ecology and Hydrology
http://www.hydrosolutions.co.uk/lowflows.html

 

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Grid Study

If you are expecting to export energy to the grid, a study of the local Grid network will need to be carried out. The characteristics of the local grid network may require different technical capabilities for grid connections at different sites.   In particular connections on to weak rural networks will often require provision of voltage conditioning equipment to avoid ‘flicker’ and to maintain the system voltage within statutory limits.  This is a common concern in the North and West of Scotland, where there extensive networks of relatively weak overhead lines.

The network operator will provide details on what is required as part of the connection offer. In relation to wind technology, some turbines now come with DVAR – dynamic voltage active regulation technologies that can help with weak connections.  Older turbines (and e.g. second-hand models) may require third party equipment to be incorporated at the point of connection to fulfill the same function.

 

 

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Screening / Scoping Opinion

“Screening” and “scoping” are part of the planning process, the following two definitions give a brief idea of what the two actions entail.

  • Screening – This is when a developer asks the Council for a formal determination on whether or not a project requires an Environmental Impact Assessment (EIA)
  • Scoping – Where it has been deemed necessary to carry out an EIA the developer may ask the Council what should be covered in the EIA; it is not essential but may lead to delays if information is missed.

The Scoping Opinion provided by the Council will determine the information required for the EIA.  This is a compilation of the answers back from each of the statutory bodies regarding the project.

After having a Screening carried out, the Council will set out whether or not an EIA is needed and the reasons for their decision. When applying for a scoping opinion, any requests should include a plan identifying the land and a description of the nature and purpose of the proposal and its effects on the environment.  Any other relevant information may also be included such as proposed methodology.
Speak to you local planning authority and any relevant statutory bodies at an early stage to ensure that you are taking the right project forward and to minimise the chances of the project being held up at later stages.

 

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Transport / Access Survey

The manufacturer you choose to deliver your chosen technology will supply the minimum transport and access requirements for the type of machinery under offer. These will include vehicle dimensions and weights, and specifications for access tracks in terms of construction, gradient, and turning radii. The manufacturer takes ultimate responsibility for delivery to site, but it is the responsibility of the client to ensure the access is prepared to the issued specifications in a timely way.

The supplier’s specifications can sometimes be conservative (e.g. in terms of road width or maximum gradient), and detailed discussions may enable them to be relaxed in some cases.  Good liaison between the customer and supplier is essential in this regard.  The supplier will in any case inspect the finally prepared route prior to delivery to check that it is viable; if there are any modifications still needed at this stage, however, they may delay project delivery so it is advisable to work to minimise this risk. Ensure the site access is or will be suitable before you proceed.

 

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Security Over Land

Establish who owns land and open negotiations

Site selection and design is very important when trying to balance between developing an efficient and economic system and maintaining an acceptable environmental impact. Key to any site, however, is establishing the land ownership and gaining access. If the community owns the land the development sits within this should not cause any problems. If not, then permission and access will have to be gained from the landlord or landlords of the site. The community can either opt for purchase the land from the landowner or lease it and negotiate purchase price or lease rent as appropriate.

Communities using non–community owned land should ensure they agree with the landlord that the community has the exclusive rights to develop the site and that they gain a lease on the site if the project gains planning consent.

Options agreements

An option agreement is a legally binding document signed by both the landowner and developer giving the developer the right to lease the land for their development. An option agreement sets down what the terms of the lease will be. It is advisable to enter into an option agreement with the landowner of the site for your project as early as possible. Usually an option agreement would be signed after the community has undertaken a feasibility study as they then have a good idea of the nature of the project, in particular the location and size. It is prudent not to share the full details of a feasibility study with the landowner; however this may be difficult for a community group when sharing information pertaining to the project with the community. If there is a risk of someone else developing the site then it is advisable to have an options agreement signed as soon as possible.

A heads of terms is a non-binding document used to negotiate the main issues relevant to the options agreement. When negotiating the heads of terms check with potential funders of your project, such as banks and funding organisations, to ensure it is compliant with their terms and conditions.

Contact your local Community Energy Scotland officer for a copy of a draft Heads of Terms and a draft Options Agreement. Click here to see who your local officer is or send us your enquiry through our “Contact Us” page.

Crofting tenure

In Scotland it is also important to establish if the land is under tenure, for example crofting tenure. This means that that the tenant has rights in any lease of land. Good communications with crofters and other land users is vital.

If the land is subject to crofting law the land will need to resumed or need to have a servitude exacted on the tenure to maintain access for the life of the renewable plant. You should refer to the Crofter’s Commission who have produced guidance on this.

The preferred option is the resumption of the land through the Land Court as any organisation taking the lease as security, such as a bank or funding organisation, would want to minimise the opportunity for third party involvement. If a lease is taken out on resumed land it has to go through the land court which can happen quite quickly. It can be very difficult to change a lease once it has gone through the court process so ensure potential funders of the project are satisfied with the terms of the lease, with respect to stepping agreements in particular, before it goes through the land court.

  • Negotiate purchase price or lease rent as appropriate 
  • Lease rent could be fixed sum or % of turbine income
  • % of gross revenue easiest to calculate

Leases

It is important to secure access and further use of the site before planning consent is granted and to include areas for crane hard standings, access tracks, pipelines and construction activity. The lease will need to be for the lifetime of the project, which could be between 25-50 years dependant on technology, with no break clause and should be assignable if using outside finance. The lease rent can be a fixed sum or based on a percentage of the revenue from the turbine or hydro generator.

In a standard renewable energy project lease basic clauses such as the following should be considered:

  • Use - any restrictions on use may be an issue for funders
  • Alienation – this deals with the sub-letting or assignation of the lease.  This should only be restricted by requiring the landlord’s reasonable consent.
  • Rent – the rental requirements need to be reviewed.  These may be peppercorn; turnover; open market

Rental rates will need to be negotiated and a professional opinion and market rates should be obtained. It is important in a small community that this negotiation is seen as open and fair. If the site is leased then the rent could be a fixed fee or vary according to power output of the site. Commercial and public funders will want to view the land lease to ensure it is appropriate to use as a security.

Parties to lease

If the community does not own the land then a lease will be needed between the landowner and community group or subsidiary.

Both the public and commercial funders will want to view the land lease to ensure it is appropriate to use as a security. They will most likely require the lease to be held by the entity with which they will be entering into a legal agreement.

  • If the project is being developed by a subsidiary of a community trust then commercial funders will prefer that the subsidiary has the lease of land rather than the community trust as the lease is a fundamental piece of security which underpins the commercial loan. 
  • Public funding organizations will probably prefer that the community trust holds the lease and that the community trust sub-lease to the trading company. This is because public funding awards are usually made to the community trust and the public funder will wish to take security over their lease.

If the community trust owns the land they can lease the land to their subsidiary (trading company) and commercial funders will loan their funds to the subsidiary and therefore take their security over the lease.

Leasing on resumed land

Leases can go through the land court quite quickly but stepping agreements can take a considerable amount of time.

Way leaves

Wind turbine and turbine blade delivery will require access roads to have sufficient turning circles to allow the required long base trailers to access the site (see Section 14.Transport for more details). If this is not already available on the local road network alterations will need to be made and will require agreement with all involved parties. Way leaves (the right of way over somebody else's property, for which payment is usually made) may also have to be gained to allow access to construct and maintain site, construct cable routes and maintain access tracks.

Relevant documents and links:
http://www.communityenergyscotland.org.uk/our-team.asp
Contact Us
Crofter’s Commission

 

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