Shared ownership of renewable energy developments - good practice principles: consultation

Draft version, for the purposes of public consultation, of Scottish Government's Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments.

3. Shared Ownership Journey

This section sets out:

  • Typical shared ownership journey
  • Roles and responsibilities
  • Timing of the investment

3.1 Context

This section aims to set out the key milestones, including roles and responsibilities for a "typical shared ownership journey" as highlighted in the diagram below. Please note, however, each project will be different, the milestones and timings identified are purely to give those involved a benchmark and all parties should bear this in mind when reading the guidance.

3.2 Typical Shared Ownership Journey

It is important that both communities and renewable energy businesses are able to understand key milestones in a project's journey, including when they will be required to make decisions.

The following key issues are worth highlighting:

  • All parties should acknowledge the length of time it may take to conclude the process.
  • It may be some time before the community sees a financial return from any investment.
  • Recognition from all parties that the complex nature of developing the project, may result in setbacks and delays.

shared ownership journey

3.3 Roles and Responsibilities

The main roles and responsibilities are summarised in the Executive Summary.

The following tables provide guidance on key project milestones: from the pre-planning stages of the development to the commissioning of the project (along with the roles/ responsibilities of the renewable energy industry and community at each stage). As advised above this is only a guide.


Roles, Responsibilities and Key Milestones

Renewable energy business


Pre planning application:

Community engagement

  • Identify geographical boundary and applicable community, seeking support from local authorities where required.
  • Present development proposal to community and potential shared ownership models, including conveying the terms and conditions of the offer to the community.
  • Different models will suit different communities - use this time to explore options and determine a preference.
  • Appoint a single, key point of contact to liaise with the community throughout the project duration.
  • Establish a single community group with advice/ assistance from Local Energy Scotland.
  • Consideration of widening the geographical area to include additional communities.
  • If desired, hold a community ballot to determine support for/ against proposal.
  • Consider appointing a project manager.
  • Engage in discussions with the renewable energy business in an open and amicable manner.
  • Discuss shared ownership experiences with other communities who have been involved in process to gain a greater understanding of what to expect.

Pre planning application:

Seek independent professional advice

  • Clearly convey any risks associated with the offer.
  • Must comply with all relevant Financial Conduct Authority (FCA) rules and regulations.
  • Timescale, structure and financial proposal should be realistic and on a commercial basis.
  • If the shared ownership offer is a post-planning investment, this should be clearly explained.
  • Timescales should be reasonable, while respecting commercial and/or regulatory restrictions and community groups should be given adequate time to consider and evaluate any potential offer (explored in Section 5).
  • Open discussions with Local Energy Scotland to explore potential financing options through CARES and signposting to other funders.
  • Seek professional, independent financial advice to determine whether the offer works on a commercial basis as well as advice to manage any liability risks.
  • If the offer does not work on a commercial basis, end pursuit of the shared ownership agreement.
  • Any commercially sensitive information given to communities by renewable energy business should be treated as such, and should not be publicised on any public platforms.

Financial Close:

Source financial modelling

Financial Agreements

  • Seek professional advice to manage any liability risks.
  • It is important to remember that opportunities are additional to community benefit provisions. Community benefits should be provided in line with Scottish Government Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments. It should be made clear if local communities can convert any existing or forthcoming community benefit payments into a carried equity stake where the recipient groups is also the proposed partner community group.
  • Financial agreements available.
  • Explore potential funding options, including through:
    • Local Energy Scotland (CARES)
    • Scottish Enterprise (EIF).
    • Commercial lenders
    • Community shares

Financial Close:

Community Action Planning

  • Where requested, provide support to the community in the development of a community action plan.

If a community action plan is not already in place, consider developing one to ensure income from the shared ownership proposal can be spent accordingly:

  • Establish a purpose statement, and identify resources required to achieve purpose.
  • Seek professional support, if required (with assistance available through Local Energy Scotland).
  • Consult with the wider community to establish the community's priorities.
  • Analyse findings from the consultation, and produce the community action plan.


Investment Management (if applicable)

  • Financial arrangements to be concluded.
  • Ensure all legal arrangements are in place.
  • Financial arrangements to be concluded.
  • Ensure all legal arrangements are in place.

Post Commissioning:

Community Action Plan Implementation

  • Provide a point of contact.
  • Implement Action Plan in line with agreed governance arrangements.
  • Provide annual updates.
  • Review investment.

The role and responsibilities of Planning Authorities are explained further in Section 4.

3.4 Timing of investment

Each business will have its own policy on the timing of an investment offer to a community. For example, some investment opportunities may be available to communities pre-planning (these are higher risk), while others may enable the community to invest later in the development process, for example, at financial close or post commissioning.

The key investment points are:

Planning submission
After consent
From Final Investment Decision (FID)
During construction
At commissioning
Post commissioning

If the community intends to invest post-planning, an agreement of intent should be signed in advance of submission of a planning application (where appropriate). Clear and transparent public meeting minutes may suffice where both parties are content. Early dialogue with all concerned to explore the timing of the investment is encouraged.

As advised previously, developing a renewable project is complex, and communities should seek independent professional advice as necessary. For example, where a community is considering a joint venture (private limited company), there are legislative restrictions on the detail of early discussions. Awareness of these restrictions and other issues should help to reduce unexpected issues delaying a project.

Local Energy Scotland can help support communities to explore opportunities, and appoint relevant professional advisors, as required. Further details at section 6.


Email: Lorne Frew

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