Scottish Renewables Review

The Scottish Government has been keen to promote the production of clean energy. As a result, renewables technology has come along way in the past decade with on-shore wind at the forefront of this drive.

This has led to an increase in demand for new sites. Many of the windiest areas in Scotland are in the traditional crofting counties particularly the Highlands and Islands.

Developers, however, were initially put off building windfarms on crofting land because they believed crofters added a further layer of complication to an already complex process of negotiations between developers, planning authorities, land owners and national grid operators making the process even more expensive and time consuming.

To date there have been very few successful developments on crofting land due, in part, to the risks and costs involved.

Recent changes to crofting law, however, are expected to lead to more crofting land being used for wind farm development. These changes have been welcomed by developers, landowners and the crofting communities themselves.

The Crofting (Scotland) Act 2007 was passed by the Scottish Parliament in March this year and the majority of it was enacted on the June 25. It renders some of the previous legislative failings of the Crofters Acts redundant and it is believed will ease the passage of wind farm development on crofting land.

To allow development, land has to be resumed from crofting control but in previous legislation it was not clear that resumption for windfarm development was a reasonable purpose.

It was also unclear whether crofters could contract out many of their own protections so as to bind their successors. This was particularly problematic for wind farm developers as sites have a life span of around 30 years meaning they would require the security that every successor would be bound to honor commitments given by the crofters at the start of the development. Unanimous agreement also had to be reached which was complicated when there were a number of crofters involved.

Compensation was also a huge issue. The crofters are entitled to half of the development value of the windfarm site, which over the lifetime of the windfarm is a considerable amount. The legislation had no mechanism allowing this sum to be paid other than as an upfront lump sum. This huge investment before the project got off the ground had adverse effects for developers.

The new Crofting (Scotland) Act irons out a number of these problems. Firstly, it amends the resumption process to allow energy development as a reasonable purpose.

It also introduces an entirely new concept which allows landlords to apply to the Land Court for consent to develop croft land for non-crofting uses in accordance with a scheme for development. Such development schemes will include the building of windfarms.

The criteria that such a scheme must meet in order to obtain the Land Court’s consent to it are:

  • The development has to be for a reasonable purpose;
  • The development must not be unfair;
  • The scheme must provide for fair recompense to each member of the crofting community;
  • The development must be one, which would be likely to bring benefits to the community at least comparable with the benefit which could be achieved if the development had progressed by other means.

Like the previous legislation, however, it is implicit in the wording of the provision that to obtain consent for a scheme there should have been detailed discussion with members of the crofting and wider community before an application is made.

However, the ability to have the Land Court ratify a development scheme resolves the issues of unanimous agreement of the crofters and the thorny issue of binding successors which have previously caused much concern.

Finally, the new Act changes the law on payment of development value on resumption. The Land Court can now specify that the compensation due to the crofters be paid in installments over the life span of the project rather than in a lump sum. This removes the risk of developers being exposed to uneconomic upfront payments which previously were a major concern.

It is anticipated that these changes will allow windfarm development to proceed more smoothly in areas where there is local crofting community support.

The removal of some of the previous legislative obstacles to such development should result in developers being more willing to consider developments on crofting land where the community is in favour.