UK Government’s proposed mandatory community benefit scheme insufficient, MPs warn in new report

• New report from committee urges UK Government to raise minimum compensation through community benefits scheme to £10,000 - £12,000 per MW 

• The UK Government should also ensure a flat standing charge across the UK to create a “fairer system for all” 

• MPs warn of logjam to connect community energy to the transmission grid 

A new report by the Scottish Affairs Committee has warned that confidence in the UK's energy transition could be undermined if Scotland's communities - many of which are hosting new energy infrastructure - feel that they are being disproportionately impacted by its costs and disruption.   

MPs welcome the UK Government's commitment to introduce a mandatory community benefits scheme, which consists of financial payments from developers to residents in areas hosting new energy developments. However, they conclude that the proposed compensation level of £5,000 per MW is insufficient. The committee calls for this figure to be raised to £10,000-£12,000 per MW, with mechanisms in place for this to be updated over time.   

The report also emphasises that meaningful community benefits can go beyond financial payments. It urges the UK Government to ensure community benefits schemes are flexible and responsive to local needs, placing emphasis on housing availability, skills training and local job creation. This, MPs say, is critical to ensuring that energy transition delivers a lasting, transformative legacy in rural and remote Scotland.   

The report also raises concerns about higher-than-average standing charges in Scotland. The Committee calls for urgent reform to create a fairer system, with standing charges made consistent across all UK regions.   

While welcoming the UK Government's ambition to expand community and locally owned clean energy through the Local Power Plan, the report warns of a “disconnect” between this and the practical reality in Scotland. Current Transmission Impact Assessment thresholds mean that much of the transmission grid is effectively allocated until 2035, leaving community energy projects at a “near-standstill.”   

The report calls on the UK Government to unlock the full potential of community energy projects by setting out the concrete steps it is taking to ensure Scotland can access the full benefits of the Local Power Plan.   

Patricia Ferguson MP, Chair of the Scottish Affairs Committee, said:   

“Scotland will play a pivotal role in ensuring that the UK Government achieves its ambitions for clean power. For these missions to succeed, it's crucial that communities - particularly those in rural and remote areas who have been asked to host new energy infrastructure - feel that the energy transition is being done with them- not to them.   

“We've concluded that the Government's proposed mandatory community benefits scheme doesn't go far enough. Communities must receive fair compensation for shouldering the burden of the energy transition - especially when many are already experiencing fuel poverty. We think fair compensation would be between £10,000 and £12,500 per MW per year.   

“However, our report is also clear that meaningful benefits extend beyond financial payments, and that housing and skills have the potential to deliver a genuinely transformative legacy in rural and remote Scotland.  

“We're also calling for the UK Government to take further action to support Scottish people during this transition, by introducing fairer, more consistent standing charges across the UK.”