Crown Estate to Finance for Green Spin-off Fund (UK)

Chancellor George Osborne is under pressure to direct the Crown Estate commissioners to finance a spin-off fund to ensure communities across the north benefit from offshore wind, wave and tidal power projects.

The proposal – from Caithness, Sutherland and Easter Ross Liberal Democrat MP John Thurso – follows the commissioners’ failure to act on their own initiative to use some of the rent they demand from developers using the seashore and seabed to set up a fund.

The MP has written to Mr Osborne after the chancellor failed to respond to questions about his announcement that 15% of the commissioners’ revenue will be set aside for the expenses of the Queen and members of the Royal Family.

Lord Thurso raised the suggestion that a similar proportion should be set aside for local use during a Commons Treasury committee hearing.

The idea follows proposals put forward by Highland Council leader Michael Foxley for a development fund, which could involve tens of millions of pounds, during talks on a memorandum of understanding between local authorities and the commission.

It builds on the precedent set by the deal under which a fund controlled by Shetland Council receives a levy on barrels of oil landed at Sullom Voe oil terminal, which has proved of huge benefit to the island.

Lord Thurso raised the issue at an earlier committee meeting during a hearing on the role and behaviour of the commission, when chief executive Roger Bright flatly rejected the proposals.

In a letter to Mr Osborne, Lord Thurso points out that the Pentland Firth “contains six out of the 10 top UK potential tidal energy sites, having 50% of the UK’s potential tidal energy resources which is equivalent to 25% of Europe’s tidal energy resources”.

He said: “The current licences granted by the Crown Estate will provide 1.6gigawatts of electric power, and it is estimated that with full development the resources could be worth in excess of 15gigawatts, roughly equivalent to one quarter of the UK’s energy supply.

“The principle of community benefit from major infrastructure projects has been well established with oil revenues in Shetland, community payments from onshore wind developers, and socio-economic payments associated with nuclear sites.

“There is widespread agreement that the north of Scotland should be a beneficiary of such funds in relation to tidal energy,” added Lord Thurso.

Lord Thurso said the tidal power industry itself is at an early stage of development and lacks the funds to make a contribution, but there is a huge potential for future profits “and I therefore think it is essential to lay down the ground rules in community payments at this early stage”.

He told Mr Osborne: “I suggest to you that 15% of the energy licensing fees would be an appropriate amount to place in a community fund.

“I hope you will give this suggestion your active consideration.”

The Liberal Democrat MP said last night: “I asked the chancellor at a meeting of the Treasury committee how he would ensure that local communities in the north would benefit from community funds from marine renewable energy.

“He ducked the question.”

He added: “It is essential that there is local benefit and this will only happen if the chancellor acts.”

By David Perry (pressandjournal)

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Source: pressandjournal, December 28, 2010