The Comparative Costs of Community and Commercial Renewable Energy Projects in Scotland

Abstract

The purpose of this study is to identify any differences in the costs faced by community and commercial renewable energy projects in Scotland. The Scottish Government has expressed a commitment to support the development of community renewable energy, including a target to establish 500 megawatts of community and locally-owned renewable energy by 2020. Given this aspiration, it is important to understand any cost barriers faced by community projects that are not faced by equivalent commercial projects. The study compares the costs and cost factors faced throughout the lifecycle of projects under three different ownership categories: commercial, community and commercial-community partnerships. Key findings: Community and commercial renewable energy sectors have evolved separately to some extent and have therefore faced different cost factors. This has resulted in costs that are more variable, with some facing significantly higher costs than others. Costs have become less variable over time and have decreased over the last decade. The aggregate data showed that there is no statistical difference in the costs of more recently developed community owned projects. While communities spend more in the pre-planning stages, this is not generally reflected in overall costs, pre-planning costs typically make up a minor proportion of total development costs (e.g. 50% of capital costs incurred through technology acquisition. Pre-planning barriers represent both costs and risks that may be addressed through policy measures. It is important to note that communities face a much higher risk of failure during this time.