Stornoway Windfarm

There's been renewed debate recently about windfarms on Lewis except this time it's not about whether there should be large scale windfarms on the island but who should build and operate them - the landlord in partnership with a multi-national energy giant or local crofters in partnership with a community development trust?

It’s classic big guys v little guys, capitalism v localism stuff. I’m more interested in the legal issues than the political, though, and, especially with crofting law in the mix, it throws up enough legals to keep a roomful of lawyers employed full time. In this first post, I’m just going to write about the factual background and history and some basic underlying law. Anyone reading this who lives on Lewis will likely already know all the facts and much of the law, especially the crofting.

Note - I don't know how to do linked footnotes so footnotes are in bold square brackets like this - [1] - and you just have to scroll down to the bottom if interested. Sorry!

Click map to enlarge

History

Back in 2004, a company called Lewis Wind Power Ltd (LWP – see below for who’s behind it) entered into contracts with a number of landowners on Lewis to build what would have been the biggest windfarm in Britain. Involving 180 turbines (scaled back from an original 230 [1]) across a huge swathe of the northmost half of the island and attracting widespread local opposition, planning permission for this was eventually refused in April 2008, mostly on the grounds of adverse environmental impact (EU protected peatlands and nesting birds). But LWP didn’t give up their renewable energy ambitions on Lewis and moved to concentrate on a smaller scheme in a less environmentally sensitive area on land belonging to the Stornoway Trust about 3 miles west of Stornoway where there was also less local opposition. Long/short is LWP received planning permission [2] in September 2012 for 36 turbines 143.5 metres tall with an aggregate capacity of 129.6MW (Megawatts: I think that means that, if the turbines were all spinning at optimum speed, they could light up 1.3 million 100 watt bulbs). That permission was varied in 2016 to increase the size of the turbines to 145m giving tham an aggregate capacity of 180MW. [2A] But despite having had planning permission for a while, construction of the windfarm hasn’t started yet. This is for three main reasons which I’ll come to below but first who’s who.

LWP's Stornoway windfarm - click to enlarge

Who are LWP?

LWP started life as a joint venture between British Energy (BE), the privatised incarnation of the former state owned nuclear industry, and AMEC, an energy sector engineering company (not to be confused with Amey best known for building and maintaining roads). BE got into financial difficulties in 2009 and had to be bailed out by the Government who sold it to EdF (Electricité de France). This is the 85% French government owned electricity generator of France (where there has always been a much higher component of nuclear in the generation portfolio) turned multi-national. Thus, they own the Torness and Hunterston B nuclear power stations but also hold the contract for the supply of electrity to all Scottish public sector buildings (schools, hospitals etc.) so they’re no strangers here. [3] After being briefly known as AMEC Foster Wheeler, AMEC were taken over by Aberdeen based energy services firm The Wood Group in October 2017 which has since rebranded itself simply as “Wood”. So LWP is now a JV between EdF and Wood although it’s common to see just EdF referred to as the developer. (Paradoxically, it used to seem to be just AMEC that got mentioned.)

Strictly speaking, since 2016, the developer of the Stornoway windfarm has been a subsidiary of LWP called Stornoway Wind Farm Ltd. [4] This is to keep it legally separate from the 45 turbine/162MW windfarm project which LWP bought in 2016 called Muaitheabhal (“MOO-aya-val”) on privately owned Eishken Estate about 12 miles south of Stornoway. This is the one that was originally being progressed by Beinn Mhor Power Ltd, a company owned by the owners of Eishken, the Oppenheim family – it wasn't part of the original LWP scheme turned down in 2008. Also not built yet, and more recently being referred to as Uisenis (“OOSH-i-nish”) windfarm [6], it’s less controversial because it’s not on crofters’ common grazings. I'm going to continue to refer to LWP as that’s how they brand themselves at both projects despite the underlying corporate structure. And references hereafter to LWP’s windfarm are to the Stornoway one, not Muaitheabhal/Uisenis. [7]

The Stornoway Trust (SYT)

The owner of the land LWP’s Stornoway windfarm will be sited on is Scotland’s oldest community landlord. When the last private owner of the whole of Lewis, Lord Leverhulme (eponym of today’s Unilever), disposed of the island in lots in 1923/24, he gifted the entire parish of Stornoway [8] to its residents. The gift is administered by trustees periodically chosen by all residents on the Voters Roll in elections overseen by the Electoral Reform Society. As well as the real estate, the SYT has a cash endowment (investments etc.) of around £2.5 million. I don’t know whether SYT makes grants to local good causes – unusually for a community landlord, it doesn’t have a website offering such information. [9] I suspect it doesn’t for the simple reason that it seldom has enough of a surplus: running a crofting estate is not a profitable business and I imagine its management swallows up the income from the cash endowment with little left over. The rental income which would be received from LWP will be transformational.

You can see the SYT’s Deed of Trust on their Facebook page. It refers to benefiting “the community” but doesn't define what that community is. This might matter for reasons I’ll come back to. [10] I imagine it can’t be anything less than the residents of the whole of Stornoway Parish but could SYT reach further? In a Comhairle nan Eilean Siar (CnES – Western Isles Council) minute on the subject of a joint approach to the equity participation (more on this below) being offered by LWP to SYT and CnES in, respectively, the Stornoway and Muaithebhal/Uisenis windfarms we get the following hint (in para. 4.7) of SYT’s view on this matter:

an appropriate amount could be ring-fenced to the Stornoway Trust area to reflect the community’s expectation that the  [offer of equity particpation to SYT] was to benefit the host community, within Stornoway Trust boundaries. The remaining generation, or benefits could be disbursed across the Outer Hebrides, from the Butt to Barra.

Interconnector (HVDC Cable) and grid

The first reason why LWP haven’t built their windfarm yet is because the existing subsea cable across to the mainland isn’t big enough to carry all the juice it will generate. It's only capable of handling about 20MW but Scottish and Southern Energy Networks (SSEN) [11] plan to lay a new 600MW cable big enough to accommodate LWP and with plenty of room for future expansion. This cable is referred to as the “interconnector” or, in more technical language, the HVDC (High Voltage Direct Current) cable. [11A] It will run from Arnish just south of Stornoway to Dundonnell on Little Loch Broom in Wester Ross and run from there underground east to join the new Beauly-Denny HV line. After years of delay, the latest estimate for completion of this is in 2023 at a cost in the region of £700-800 million. [12]

The interconnector isn’t a done deal yet. Generators and suppliers of electricity (not the same people) pay to use the national grid (of which the interconnector will become a part) and pass that cost on to their customers, ultimately Joe Public paying his electricity bill. In the north of Scotland, the grid is owned by SSEN but operated by UK-wide National Grid plc (c.f. the railways being owned by Railtrack but operated by Abellio-Scotrail et al). SSEN and NG are both private companies albeit acting in a market heavily regulated in order to ensure security of supply of electricity at reasonable cost to consumers. The interconnector is not being delivered by Government at the tax payer’s expense like a new road or bridge. [13] I understand that, in order prevent a key player in the national grid being put at risk by ill-judged investment, SSEN are not allowed in terms of their operating licence to lay the interconnector speculatively: they have to submit a “needs case” to the market regulator Ofgem. That was done in August 2018. All this means that the interconnector will not happen until sufficient new renewable generation on Lewis to justify the investment risk it involves is more or less guaranteed to happen. LWP argue that their schemes (Stornoway and Muaitheabhal/Uisenis) are the necessary makeweights to deliver the interconnector without which other smaller players (community wind farm projects – see below) will not be able to proceed either.

As well as the interconnector to the mainland needing upgraded, the local electricty distribution grid within Lewis is almost full to capacity and will need to be improved to cope with further renewable development. I gather the already existing smaller wind farms on island can't operate to their full capacity and suffer periodic grid “outages” (meaning, I think, that the grid prevents them feeding more electricity into it when it has reached full capacity).         

Contracts for Difference

The second reason why LWP haven’t built their windfarms yet is that they don’t have a “Contract for Difference” (CfD) yet. This is the current scheme to subsidise low carbon (LC) energy generation. For new LC projects, it replaces the old Renewables Obligation Certificates (ROCs) scheme. I gather that windfarms in the Western Isles are simply not ecomically viable without these subsidies.

CfDs involve LC generators entering into a long term contract (“contract for difference”) with a thing called the Low Carbon Contracts Company (LCCC - a non-profit wholly owned by the UK Government) whereby, when the market price for electricty is low, LCCC pays the generator a top up to a price called the “strike price”. Conversely, when the market price is higher than the strike price, the generator has to pay back the difference. In so far as it produces an overall deficit to LCCC (which is the expectation), this is funded by a levy on electricity suppliers (who, of course, pass that cost on to their customers). [14]

CfD in action - from EMR Settlement Ltd

CfDs are awarded in periodic rounds to new LC projects as they are built. There were rounds in 2015 and 2017 and the next one is in May 2019 for projects coming on line in 2023-25. The rules as to eligible LC technologies differ in each round. New onshore wind farms were inelegible for CfDs in 2017 but those on “remote islands” (defined as those >10km from the mainland so including Lewis [15]) will be eligible in 2019.

 

Crucially, there is no automatic entitlement to a CfD at any given strike price (the price LCCC tops you up to when market prices are lower). Funds are limited so, in a competitive process I don’t understand all the details of, LC generators have to set their own strike price in a blind bid auction and the lower the bid, the greater the chance of success. It's like offering for a house at a closing date. The system is designed to stimulate competition and investment in the latest and most efficient LC technologies (the more efficient your generating kit, the lower the market price you can withstand before needing support, I guess). There's a clickable map of successful bidders in 2015 & 2017 with their strike prices here. Anyway, bidding for a CfD in 2019 is on LWP’s to do list and with a view to maximising their chances, they’re currently consulting on applying for a variation of their planning permission to permit a slightly fewer number of bigger turbines to increase efficiency: see here.  

Crofters and Common Grazings

I’m assuming if you're reading this that you know what crofts and common grazings are but, if not, see this footnote [17]

Anyway, the last – but by no means least – reason why the windfarm hasn’t been built yet is because the 1,700ha (4,200 acres) site LWP have leased from the Stornoway Trust to build it on is crofters’ common grazings. That means nothing can be built there (even if it has planning permission, grid connection and CfD etc.) until the Land Court gives its permission. There were hearings on this in the LC in Stornoway in the second week of December 2018 (which is why this has all hit the headlines recently) but I understand no decisions are expected for a couple of months. There appear to be nine different grazings embraced within the LWP lease which are used by the crofters of about twenty townships around Stornoway. [17A]

Crofting law – resumption and sections 19A and 50B

Ever since crofting law began in 1886 (following the Napier Commission) there has been provision for crofting landlords to resume croft land (in-bye or common grazing). That means that the crofter’s tenancy (or grazing rights in the case of common grazings) of the resumed land is terminated and it is also removed from the crofting law regime altogether (which means the Crofting Commission can no longer force the landlord to let it to a new crofter as it can in most other situations where a tenancy of croft land has terminated). Resumption has to be authorised by the Land Court who (in brief for now) will normally only authorise resumption for a development that already has planning permission. You can resume the whole of a croft (or common grazing) or part of one. In the case of partial resumption, the tenancy (grazing rights) continue in respect of the remainder. Partial resumption is in practice far more common (because a planning permission seldom covers the whole of the in-bye of a croft or an entire  CG) and resumption from common grazing is more common than resumption from in-bye.

Originally, the only compensation crofters got for resumption was a reduction in their rent but in 1976 a fundamental change was enacted whereby the crofters also became entitled to 50% of the capital value of the resumed land (calculated with vacant possession and the benefit of the planning permission). [18] In the case of resumption from common grazings, this gets shared amongst the crofters involved. However, it came to be realised that resumption on this basis is a bit clunky in the context of developments which the landlord is not going to sell but merely rent because they are temporary. This is because the landlord has to pay the 50% capital value up front before he has received any rent and there is no provision for the resumed land to revert to crofting (i.e. giving the CC back the power to compel its relet to a crofter) once the alternative use had ended. Resumption is also a bit heavy handed in the case of renewable energy projects (which are normally limited by their planning permission to a 25 year lifespan) on common grazings which can co-exist with crofting in that the crofters’ sheep can continue to graze right up to the bases of the turbines and the edges of dams etc. involved in hydro power. Therefore, in 2007, very much with renewable energy in mind, a new provision – section 19A – was inserted into the crofting legislation giving the Land Court power to allow temporary redevelopment of croft land on the basis that the affected crofters will receive 50% of the rent and their rights (and the CC’s powers) are merely temporarily rolled back enough to accommodate the development for so long as it lasts. [19]

With SYT’s consent as landowner, LWP made a s.19A application to the Land Court to develop its wind farm on the common grazings west of Stornoway in 2017. That is what was being heard in the town in the second week of December 2018.

Crofts at Sandwick east of Stornoway

Section 50B

It’s crucial to note that resumption and s19A can only be invoked by the landlord (or, in the case of s19A, someone authorised by him, typically a tenant). There is no provision for crofters to resume from the landlord, so to speak. Thus, while crofters in effect own half the value of their croft land, they can’t take the initiative to release that value. At least not through resumption or s19A: as regards in-bye, an individual crofting tenant can take the initiative by exercising his statutory right to buy (see footnote 17 for more detail). But crofters can’t buy common grazings except, since 2003, by mounting a community buy-out. And while that can be forced on a crofting landlord (unlike non-crofting statutory community rights to buy – e.g. Ulva – which only apply if and when the landowner wants to sell) it’s an immensely complex and expensive process and could be something of a sledgehammer to crack a nut. [20] To resolve this, therefore, another new provision was added in 2007 – section 50B – allowing crofters to apply to the Crofting Commission for permission to use their common grazings for purposes other than grazing. [21] Significantly, s50B does not require the crofters pay anything (lump or recurring) to the landlord for the value released by the change of use.

Legal structures – option agreements and leases

Though they can’t really use it yet due to the interconnector, CfD and crofting hurdles yet to be cleared, LWP have a lease of the 1,700ha windfarm site from the landowner, SYT. I’ve not seen the lease but I expect from my experience of these things in the past that the rent LWP will currently be paying is a relatively small fixed amount. Once (if) the wind farm is built and in commission, though, it will increase to be a proportion – typically around 5% - of the income LWP receives from the sale of electricity generated (plus CfD top-ups). LWP says (scroll the linked page up) it will be paying a rent to SYT “which we estimate could total more than £1.3m, depending on the CfD Strike Price secured and the wind farm’s energy output”. These variable rents are usually subject to a minimum related to the aggregate power (megawatt-age) of the turbines on site, typically around £1,000-1,500 per MW.

Wind farm leases are usually preceded by an option agreement in which the landowner gives the developer an option to take a lease all the terms of which (including most importantly the rent) have been pre-agreed and contained in the agreement, typically by annexing to it a draft of the lease with only its start date left blank. The option to take the lease must be exercised by the developer within a set period, typically about five years. The developer will usually pay the landowner a lump sum for the grant of the option as the price of the exclusivity arrangement he (developer) thereby secures for it is inherent in an option agreement that the landowner can’t deal with any rival developers during the option period. The theory is that the developer uses the option period to obtain planning permission etc. and then, when everything’s in place, he simply pushes the button on a pre-agreed deal. In reality, obtaining planning (and dealing with other imponderables like grid connection) often takes longer than anticipated and the planning process throws out unforeseen things so a degree of renegotiation is required. In the case of LWP’s Stornoway project, I gather there was no option agreement and they went “straight to lease”, no doubt on the basis of paying a smallish annual rent until the wind farm is built in lieu of the usual lump sum for grant of an option. Although not apparently applicable here, I’ve mentioned option agreements nonetheless because one occasionally encounters the jargon. The functional difference between having an option agreement and a lease you can’t actually use yet is small.

Point & Sandwick Trust (PST) – Beinn Ghrideag community wind farm

While LWP were busy progressing their projects, a local community development trust was set up in 2005 called Point & Sandwick Trust (PST) with the object of promoting:

"the social, educational, cultural and environmental wellbeing of the people of the Western Isles and in particular the residents of the areas known as Point and Sandwick i.e. the area otherwise known as Sandwick [about a mile east of Stornoway] and the Eye Peninsula ... defined as comprising the whole area from and including North Street [in the township of Sandwick] in the west to Tiumpan Head in the East.” [22]           

Looking east along the Eye Peninsula ("Point" or An Rubha in Gaelic) to Tiumpan Head in the distance - photo Chris Murray

PST quickly identified that the best way to generate money to further its aims was to build a three turbine 9MW community windfarm at a site called Beinn Ghrideag (“GREEDGE-ak”) near the junction of the old A858 and the Pentland Road on the common grazings of the township of Sandwick North Street. This received planning permission in 2012 and started generating in 2015. It cost £14.6 million mostly funded by commercial loans with a small (relatively - £900k) lottery grant. It’s subsidised under the old Renewables Obligation Certificates scheme as having come on line before CfDs started and I gather it just squeezed into the existing electricity grid on Lewis without having to wait for the interconnector although it’s plagued by a high level of grid outages. Nevertheless, the largest community wind farm in Britain, Beinn Ghrideag still manages to generate (literally!) nearly £1m profit a year for distribution to PST's good causes. It’s a multi-award winning exemplar of community effort at its best and what I personally find so admirable (if that doesn’t sound stuffy) is that I understand PST applies 70% of these surpluses to good causes throughout the Western Isles with just the remaining 30% focussed on their own Point & Sandwick area: they don’t have to do that and I’m sure would still have qualified for the lottery etc. grants if they were 100% focussed on P&S. [23]

Back in the dust dry world of the legals, the Beinn Ghrideag site was within the area leased by LWP. However, as PST’s proposal did not conflict with any of LWP’s planned turbines, LWP agreed to relinquish the site from their lease in order that the Stornoway Trust could lease it to PST. [24] A s.19A application was made for the site but, as there was no objection from the crofters sharing the common grazing the Beinn Grideag site is on, it was passed by the Land Court without difficulty.

LWP could have demanded some sort of premium for agreeing to step aside like this but they didn’t. They did however require that their legal fees for re-jigging the leases be paid by PST as is normal practice when you’re giving something away for nothing. There has nevertheless been criticism of LWP over the amount of fees charged (c.£50,000 allegedly), alleged delays on the part of their lawyers (two years - see here) and a sort of  “no competition” clause they imposed on PST (see their April and June 2012 Board Minutes here). I’m not going to say anymore about that here but may come back and write a further post about it.

Most of my information about PST and their Beinn Ghrideag community windfarm comes from their excellent website and particularly the commendably full board minutes published on it (here) which should be required reading for any other community contemplating a renewable energy project.

Beinn Ghrideag windfarm - photo Iain Nicolson

The four townships – more community windfarms

Inspired, no doubt, by PST’s success, the crofters of four townships in the Point and Sandwick area east of Stornoway – Aignish, Sandwick & Sandwick East, Sandwick North Street and Melbost & Branahuie – decided to progress their own plans for community wind farms involving a total of 21 turbines of 5MW each on their respective common grazings (CGs) west of Stornoway. This time, however, the community plans are in direct confict with LWP because the townships’ turbines would be on exactly the same spots as 21 of LWP’s to the south of the old A858 road. Out of the 36 turbines LWP have planning permission for, this would leave them with only the 15 on other common grazings (3 to the south and 12 to the north of the road). Needless to say, LWP are not best pleased.

Legally, the four townships’ plans would be achieved by way of s.50B applications (see above) to the Crofting Commission (CC) for permission to diversify their rights to use the CGs from traditional grazing into renewable energy generation. These applications were submitted in 2016 and 2017 but three of them were refused by the CC in September 2018. Aignish’s hasn’t been decided yet but I’d be surprised if it isn’t refused for the same reason as the others. That reason is that it’s a pre-condition of a s.50B application that the crofters’ proposed use is not “detrimental to the interests of the owner” i.e. SYT. The CC accepted SYT’s argument that the townships’ proposals would be detrimental to its (SYT’s) interests in that any one of the township’s proposals to pinch LWP’s turbines would threaten its deal with them. I’m going to say no more about that here because I’m going to return to discuss it more fully in a subsequent post. 

Community benefit and community participation

Ever since the first wind farms about 20 years ago, developers have paid “community benefit” (CB) to the local community. Tactfully described in a SPICE Briefing as a “gesture” to the community, the more cynical might have seen CB originally as a blatant sweeteneer in an attempt to mollify local opposition. It typically takes the form of payments to a local body to spend as it thinks fit or else the developer funds local projects directly. There is no legal mechanism to compel developers to pay CB and an offer (or not) of CB is not a “material consideration” in the planning decision making process. [25]  There was a suggestion that the UK Government might make an adequate offer of CB a condition of eligibility for a CfD for remote island wind farms but that was not taken forward: see here (pages 7-9). But whatever the origins and legal niceties, CB is industry standard practice encouraged by the Scottish Government (SG): see here. Specifically, the SG recommends a benchmark CB of £5,000 per MW per year. There is a register of CBs in relation to existing renewable energy projects here.

More recently, the SG (and UK Gov) have also been encouraging local equity particpation in onshore renewable developments – i.e. that local community bodies be allowed by the developer to invest in and take a share of ownership of the project: see here. This is as well as, not instead of, CB. And, just to be explicitly clear, the developer is not expected to give the community the equity share – the community has to fund it itself through borrowing etc. There doesn’t appear to be an SG recommended percentage of community equity particpation.

Thus, LWP are offering CB “currently estimated at” £900,000 per year (see here - scroll up) which figure would be exactly in line with the SG’s recommended £5k/MW. They have also agreed to let the Stornoway Trust purchase up to a 20% stake in the Stornoway windfarm and CnES up to 30% of Muaithebhal/Uisenis. Further details of these arrangements are hard to come by – I don’t know, for example, whether the proposal is for SYT to buy a 20% shareholding in Stornoway Wind Farm Ltd (i.e. joint ownership of the whole windfarm – a sort of pro indiviso ownership as the lawyers would say) or whether LWP would partially renounce their lease back to SYT in relation to 20% of the turbines so that SYT would acquire full ownership of them. As already noted, there are moves afoot for SYT and CnES to enter into a joint venture to exploit these stakes, whatever form they take (see here).

PST weren’t excused CB at Beinn Ghrideag either. I understand that SYT (who as both PST’s landlord as well as a local community body were in a position to compel this) made it a condition of their lease that PST  contribute £49,000 a year (£5.4k/MW) to SYT’s “Trust Benefit Fund” over and above the rent (see here). 

Lastly on this, it’s perhaps unfortunate that community benefit and community equity participation (CEP) often get mentioned in the same breath. This tends to confuse the two and lead to implications that, in offering to let a community buy a stake, developers are being somehow stingy - see here for an example of that. But – as already noted – CB and CEP are not alternatives: developers are expected to offer both.

Pro’s and con’s

The following is a *very* approximate comparison between the benefits flowing to the community from all sources with the LWP scheme going ahead (LWP scenario) and the four townships scheme going ahead and the remaining townships on whose grazings the LWP scheme is sited following suit and taking the rest of their turbines (community scenario). Both scenarios assume 180MW and a profit per year of £100,000 per MW. In the LWP scenario, it assumes SYT takes up their 20% stake and that the current figures being mentioned for rent (£1.3m) and community benefit (£900k) would accordingly be reduced by 20%. The community scenario assumes no requirement for CB and that crofters don’t pay any rent under section 50B: I say “assume” because, while s.50B does not require it, I have seen suggestions that they might pay a rent anyway but I’m not going to discuss that here because I may come back it in a later post. The community scenario also assumes that the crofters involved (being only human!) will reserve to themselves a cut equivalent to the 50% of the rent they would receive under the LWP scenario.      

	LWP scenario	community scenario
Rent (80% of £1.3m)	1,040,000
Less crofters’ 50% of £1.3m rent	(650,000)	(650,000)
Community benefit (80% of £900k)	720,000
Profits from 20% (36MW) stake	3,600,000
Profits from 100% (180MW stake)		18,000,000
Total	4,710,000	17,350,000

                 

Criticism of SYT – communities within communities

The Stornoway Trust has come in for a lot of criticism for appearing to side with LWP and its multinational owners and stand in the way of local community effort which the figures above suggest could produce three or four times as much return for the community. The simple legal answer to that, though, is that SYT has no choice – LWP got there first and they have the legal contracts in place (the lease) to secure their position. To those who criticise SYT for having got into bed with LWP in the first place, it might be answered that, when the deal was done 15 years ago, the concept of community wind farms was still in its infancy and the big boys were the only game in town for a credible scheme to unlock the renewable energy potential of your estate. Back then, SYT might have been criticised for not dealing with them.

But even if SYT had a free hand, there may be another issue for them. The LWP scenario retains the whole return to the community (c.£5 million pa) under SYT’s control whereas the four townships’ focus seems to be going to be 30% PST (a subset of the parish) and 70% the wider Western Isles. Now if it is the case that SYT’s focus area is just SY parish, could the parts of the parish outside PST potentially lose out? I doubt it’s possible to make an exact arithmetical calculation of the pro’s and con’s for the wider parish but it might narrow the gap enough to the point where the merits of buying in to an established windfarm with a track record as opposed to the risks inherent in starting from scratch begin to tip the balance. Anyway, if I were a trustee of the SYT – conscious of OSCR beathing down my neck – this is all something I’d be wanting some reassurance on before agreeing to go all-in with the townships. [26]

What would *he* have thought ...?

Footnotes 

[1] I’ve seen varying reports of the exact numbers of turbines in the original scheme refused in 2008. This probably reflects minor adjustments from time to time in an attempt to mitigate concerns in particular localities.

[2] Strictly speaking, these windfarm permissions are consents by the Scottish Ministers under section 36 of the Electricity Act 1989 as is required for any electricty generating staion over 50W. Section 36 consents act as planning permission with the local planning authority (Comhairle nan Eilean Siar/Western Isles Council) having been a statutory consultee. You can find the s.36 consent here: type "Stornoway" into the "Search by project name" box.

[2A] You can find the variation in the same place.         

[3] See here. Less good for EdF's public image is their ownership (in partnership with the Chinese to variously reported extents) of the controversial Hinkley Point nuclear power station project in Somerset.

[4] What actually happened was that LWP changed its name to Stornoway Wind Power Ltd and EdF and AMEC transferred their 50% shareholdings in it to a new company called Lewis Wind Power Holdings Ltd in which EdF and AMEC (now Wood) each have 50% shareholdings.

[5] Blank

[6] Both names are odd choices because the windfarm is not on Muaitheabhal (a hill) or anywhere near Uisenis (a headland).

[7] Uisenis Power Ltd is now another wholly owned subsidiary of Lewis Wind Power Holdings Ltd. You can see the details of all three companies at the Companies House website:-

Stornoway Wind Farm Ltd (formerly Lewis Wind Power Ltd)

Lewis Wind Power Holdings Ltd

Uisenis Power Ltd

[8] The Leverhulme gift also included a sliver of the Parish of Lochs to the south of Stornoway Parish but not, I think, any part of Lochs where anyone lives, just bare moorland, so I’m going to continue to refer to the Stornoway Trust estate as “the Parish of Stornoway”.

[9] SYT's website is “coming soon”  

[10] The document linked to is headed “Scheme for the administration of the Trust constituted by Deed of Trust, dated 12th November, 1923, and registered in the Books of Council and Session on 21st January, 1924, granted by the Right Honourable William Hesketh, Viscount Leverhulme, as amended by Stornoway Trust Order Confirmation Act, 1975 and as further amended by Decree of the Lords of Council and Session dated 30th November, 1993 - The Stornoway Trust.” If I were senior counsel sitting down to write an opinion on the interpretation of the Scheme, I’d be wanting to see that Deed of Trust, Act and Decree in order to check that the Scheme fully replicates them all and/or whether any of them might contain anything which might assist resolving any ambguities in the Scheme, like what exactly “the community” it refers to is.

[11] SSEN is the latest trading name of Scottish Hydro Electric Transmission plc, a subsidiary of SSE (Scottish and Southern Energy), the privatised incarnation of the old Hydro Board merged with English generator Southern Energy.

[11A]. In the electricity law, an interconnector is defined as a cable between GB and another country or Northern Ireland (Electricity Act 1989, section 4(3E)) so strictly speaking the new cable across the Minch is not an interconnector.
[12] More info about the interconnector here. 
[13] I gather Government are not even going to make a contribution towards the interconnector and even if they were minded to do so, this would bring them up against EU rules against State Aid (a convenient excuse, no doubt! Until March.)
[14] I struggled to find a single, comprehensive layperson’s guide to the CfD scheme but try this.
[15] Reg. 2(4) of The Contracts for Difference (Miscellaneous Amendments) Regulations 2018, S.I. 2018/895 
[16] Blank

[17] Crofting
Crofts are a type of agricultural smallholding, unique to the north of Scotland. There are about 21,000 crofts in total with a typical size ranging from about 0.5-2.0 hectares (1-5 acres) each.

Crofts are usually grouped in villages called “townships” of typically 20-30 crofts. All the crofters in a township have the right in common to graze their animals (and cut peat for personal use) over a nearby area of land belonging to a local landowner called a “common grazing”. (Crofters can also apply for permission to plant trees on grazings - see footnote 17A below.) Sometimes more than one township shares a single grazing. Common grazings are usually large areas often extending to thousands of hectares. A crofter’s individual 0.5-2.0ha holding of which he has the exclusive use is called “in-bye” in contexts which require a distinction from his joint right with his neighbours on the common grazing but the word “croft” refers to the in-bye and the crofter’s rights over the common grazing together. (The foregoing description of crofting is subject to inevitable exceptions from the norm, for example very large crofts, crofts not in a township and/or not having any common grazing etc. A few are, in fact, what might otherwise be regarded as smallish “ordinary farms” which happened to get caught in the statutory definition of a croft framed in 1886 and too complex to go into here.)   

Crofting is regulated by a quango called the Crofting Commission (CC) and crofters are subject to statutory duties to use their crofts properly, not neglect them and to live within 16km (10 miles) of their in-bye. The CC has power to deprive a crofter in breach of these duties: in effect “use it or lose it”.

Crofts are usually held in tenancy paying a nominal rent (£5-10/year is typical) to a landlord who is usually also the owner of the common grazing. However, these tenancies have security of tenure which means the landlord cannot terminate them except for failure to pay the rent or breach of the conditions of tenancy. But it’s not worth the landlord’s while ever to do this because (apart from the public opprobrium it would attract), whenever a croft becomes “vacant” (doesn’t have a tenant), the landlord can’t use it for his own purposes but is compelled by the CC to re-let it to a new crofter who gains the same security of tenure and so the process begins over again. Due to their enduring nature, crofting tenancies can be bequeathed and sold (“assigned”). Purchasers (“assignees”), but not legatees, require to be approved by the CC. Crofting landlords are not under any obligation to maintain houses or other infrastructure on tenanted crofts as “ordinary” residential and agricultural landlords are.

Since 1976, crofting tenants have had the right to buy the freehold of their inbye (not their share of the common grazing) from the landlord at fifteen times the rent, a modest sum. However, the rate of uptake of this right to buy (about 30% overall and only about 4% in the Western Isles) has been low compared with Council house tenants. This is because crofters who’ve acquired their freeholds (“owner occupiers”) don’t thereby escape from compliance with the “use or lose it” and residence duties enforceable by the CC (who in case of breach have the right to compel an owner occupier (o/o) crofter to let it to a new crofter who would gain security of tenure). Thus, as crofters have little to fear (or lose) from their landlords, they don’t gain very much additional freedom by becoming o/o’s so long as they don’t plan any changes to the croft. They do, however, have the right to apply to the CC to “decroft” parts (or, theoretically but unusually, the whole) of their croft – that is, have it released from the statutory “use it or lose it” duties. But decrofting has to be justified to the CC and can’t be taken for granted. (There was recently a high profile case where decrofting was refused for a housing development which already had planning permission on an o/o croft at North Ballachulish.) But where decrofting is possible, the commonest scenario of a crofting tenant exercising his right to buy (including in the Western Isles) is that he gets planning permission for a development on part of his croft, buys that part, decrofts it and sells it on to a developer at full vacant possession value. Any such sale within 20 years of purchase from the landlord is subject to a clawback to the former landlord of 50% of the uplift in value. (The foregoing doesn’t apply to croft houses. They can be bought from the landlord at a nominal sum ignoring the value of the house itself (assuming the usual case that it was built at the expense of the tenant (or, more usually, a previous tenant) rather than the landlord). The crofter then has an absolute right to have the house (and garden) decrofted. Thus, most crofters, even in the Western isles, have bought their houses and decrofted them leaving just the rest of the in-bye in tenancy.)

Jurisdiction over crofting matters (typically disputes between crofters and landlords with each other and/or the CC) is vested in the Land Court rather than the ordinary courts (Sheriff Court and Court of Session).                       

There is a Crofting Register with a searchable map of crofts (in-bye and common grazing, tenanted and owner-occupied) but only about 25% of crofts (in-bye) and not all CGs are on it yet because compulsory registration is only triggered on the occurrence of certain events (including assignation and transfer to heirs). Thus, the fact that a piece of land doesn’t appear to be identified on the Register as croft land doesn’t guarantee that it’s not.

[17A] From information submitted by SYT in connection with the section 50B applications I got from the Crofting Commission, they are the common grazings of the townships of  (1) Garrabost & New Garrabost (G&NG); (2) Holm; (3) Newvalley, Guershader and Laxdale Lane (NG&L); (4) Sheshader; (5) Aignish; (6) Sandwick & Sandwick East (S&SE); (7) Sandwick North Street (SNE); and (8) Melbost & Branahuie (M&B). The ninth is the "Stornoway General" grazing which is shared by the townships of (a) Bennadrove; (b) G&NG; (c) Holm; (d) Lower Bayble; (e) M&B; (f) Newmarket, Laxdale & Coulregrein; (g) NG&L, (h) Portnaguran, Newlands & Broker; (i) Portvoller; (j) Sandwickhill North Street; (k) Shulishader & Newlands; (l) Steinish; and (m) Upper Aird. In so far as some of the townships sharing Stornoway General also have their own grazings (amongst nos. (1) to (8)), I understand the latter are apportionments to these townships made in the early 1990s for the purposes of crofter forestry schemes under section 50 of the Crofters (Scotland) Act 1993. These townships also retain shares in Stornoway General.
[18] Crofting Reform (Scotland) Act 1976, s.9 now re-enacted as section 21 of the Crofters (Scotland) Act 1993 (a consolidation Act). Strictly speaking a crofter’s entitlement is to 50% of the difference between the market value and the crofting value of the land resumed but the latter is usually negligible.

[19] Section 19A of the Crofters (Scotland) Act inserted by s.30(1) of the Crofting Reform etc. Act 2007. Resumption is still theoretically possible for a temporary development especially as the resumption provisions (1993 Act, ss.20 & 21) were amended by the 2007 Act to allow temporary resumption (1993, s.20(1B) inserted by 2007, s.22(1)(b)) and with the crofters’ 50% share of value to be paid in instalments (whether the resumption is temporary or permanent – 1993, s.21(1A) inserted by 2007, s.22(2)(a)). But differences between temporary resumption with instalments (TRWI) and s.19A remain which I won’t go into now except to say that, for a wind farm on common grazings, the Land Court would be likely to look askance at TRWI and be more amenable to s.19A.
[20] The crofting community right to buy (CCRTB) is contained in Part 3 of the Land Reform (Scotland) Act 2003. It is exercisable by crofting community bodies (CCBs) and the consequence of a CCRTB is that the crofters of the land purchased simply acquire a new landlord, the CCB. It will exactly the same rights (e.g. to apply for resumption and s.19A) as the former private landlord except that it would presumably exercise these rights (or not) in a way more in tune with the crofters’ collective aspirations.
[21] Crofters (Scotland) Act, Section 50B inserted by s.26(2) of the Crofting Reform etc. Act 2007.
[22] PST is incorporated as a company limited by guarantee (originally called Point Power & Energy Company Ltd and now called Point and Sandwick Development Trust) and this is a quotation from its Memorandum of Association which you can see here             

[23] The 70% WI/30% P&S split doesn’t appear anywhere on their own website or Companies House file (that I could find anyway) but it’s referred to in the Scoping Reports for three of the “four townships” community wind farms (which I’m coming to presently). You can see an example of one these Reports here - see para 1.3.3

[24] The lease of the Beinn Ghrideag site is actually to PST’s trading subsidiary, Point and Sandwick Power Ltd.

[25] Community benefit (CB) not being a "material consideration" is a reference to the statutory formula that applications for planning permission must be decided by the planning authority (PA) “in accordance with the development plan unless material considerations indicate otherwise” (a gloss on s.25 of the Town and Country Planning (Scotland) Act 1997). Thus, if a wind farm applied for would not be in accordance with the relevent development plan, the PA will not be swayed by generous offers of community benefit. Equally, a wind farm which is in accordance with the plan couldn’t be refused just because the developer hasn’t offered CB. I can’t put my finger on why CB (or absence thereof) is deemed not to be a “material consideration” (MC) – I would have thought that, as a matter of fact, it is a MC and just because the Scotgov says it’s not doesn’t make it so. There must be some statutory or judicial principle of planning law about this I’m not aware of because I’m no expert on planning. I recall from practice 15 years ago that it used to be common to see the CB arrangements explicitly set out as conditions of the planning permission and recorded in Section 75 Agreements whereas the Scotgov documents linked to here are at pains to stress that discussions about CB are to be kept separate from the planning process so far as possible. So there seems to have been some intervening change here.

[26] I feel that the syndrome of landowning charities finding themselves conflicted when there’s a mismatch between the residents of their land on the one hand and the beneficiaries of their charitable purpose on the other is something the Scottish Land Commission perhaps needs to have a look at. There was that thing a few years ago I forget the details of now about a charity which owned rented houses in Lorne Street in Leith who decided that the best thing to do to maximise their asset was to kick the tenants out and flog the houses with vacant possession. There's also the community landlord of South Uist, Storas Uibhist, who came under fire for dragging one of their crofters into the Land Court over whether land he was occupying (Snishival Mill) was actually part of his croft. Their defence was to the effect “We’re a charity obliged to steward our assets for the whole community.” (See here last sentence) Charities don’t always have the luxury of being charitable!