Government proposes mandatory community benefit and shared ownership schemes to support its clean energy goals in Great Britain

In line with the UK's ambition to become a “clean energy superpower” and achieve Clean Power 2030 goals, the Department of Energy Security and Net Zero (DESNZ) has published a working paper on "Community Benefits and Shared Ownership for Low Carbon Energy Infrastructure” to facilitate the deployment of low-carbon infrastructure. The paper considers proposals on how to make this transition equitable and widely accepted, proposing a more consistent and potentially mandatory approach to community benefits and shared ownership.

Community benefits

Community benefits refer to the monetary and non-monetary contributions made by energy developers to local communities that host infrastructure projects. These benefits can take various forms, including cash payments to community funds, investment in local amenities, support for education and skills development, and in-kind contributions such as equipment or services. In the UK these benefits are currently voluntary, leading to uneven support across communities.

The working paper proposes the introduction of a mandatory community benefit scheme for low-carbon energy infrastructure. This approach would require developers to contribute a minimum amount,  linked to the scale of energy generation, to community funds. These funds would then be managed locally, allowing communities to decide how best to use the resources to support their needs and priorities.

The government’s rationale for this approach is to guarantee that communities hosting energy projects share the economic and social advantages of the energy transition, thereby increasing local acceptance and reducing opposition that may delay or block projects. Importantly, should community benefits be mandated, the government anticipates that developers will work closely with local communities to deliver benefits tailored to their unique needs and situations, rather than a one-size-fits-all method. The scheme is inspired by international models like Ireland’s mandatory community benefit funds.

Shared ownership

The working paper also explores the concept of shared ownership, which enables communities to hold a financial stake in local renewable energy projects. The government's view is that shared ownership provides communities with the opportunity to earn financial returns while also promoting deeper engagement and a stronger sense of partnership. Although shared ownership models are well established in Scotland and Wales, they are less common in England.

The government is exploring whether to mandate shared ownership opportunities or continue relying on voluntary arrangements. The Infrastructure Act 2015 provides the secretary of state with powers to require "community electricity rights" to buy stakes in renewable electricity generation, but these powers have not yet been exercised. The working paper seeks evidence on the effectiveness of voluntary approaches and the potential benefits and challenges of introducing mandatory shared ownership.

The paper also highlights international examples, notably Denmark’s 2008 Renewable Energy Act, which requires developers to offer 20% ownership to nearby residents, supported by government incentives and community engagement. Similar models exist in countries like Canada, Sweden, Norway, the US, and Germany.

Enforcement mechanisms

The government proposes clear enforcement mechanisms to ensure mandatory community benefits and shared ownership schemes are effective. This would require primary legislation to legally bind developers and licence holders to maintain obligations even if ownership changes. The scheme would have defined standards and robust monitoring, with penalties for non-compliance to guarantee delivery. The administration could involve professional fund managers and local committees for transparency.

Enforcement would begin with dispute resolution, escalating to fines and public reporting if necessary. Fines would reflect breach severity, and developers remain responsible for compliance.

A public register would track fund progress and issues, with fine revenues supporting affected communities or those in energy poverty. The regime is not intended to have criminal penalties and would be reviewed to strengthen enforcement if needed. Proposed breaches include failing to provide funds, missed payments, poor reporting, or not appointing administrators.

Range of energy technologies

The scope of the proposed community benefit and shared ownership policies covers a wide range of low-carbon energy technologies. These include onshore and offshore wind, solar photovoltaic (PV), nuclear power, and other renewable and low-carbon electricity generation technologies.

The government’s intention for this inclusive approach reflects the need to apply consistent community benefit standards across the diverse portfolio of energy projects that will contribute to the UK’s net-zero goals. By covering multiple technologies, the policy aims to create a level playing field and ensure that all communities hosting energy infrastructure receive equitable benefits.

Relationship with planning reforms

The government’s proposals for community benefit funds are separate from the bill discounts scheme for transmission infrastructure proposed under the Planning and Infrastructure Bill.

Community benefits are not part of the planning process and will not influence planning consent decisions as they exist independently to ensure communities have a say on local developments. These benefits are also not meant as compensation for negative impacts, therefore any individual compensation will likely be arranged separately between developers and affected parties.

Osborne Clarke comment

The proposals are likely to be broadly welcomed by developers to provide some consistency in approach. It should also assist decision-makers when granting consent for projects to understand fully that community benefit is being delivered with government support.

Once consent has been granted, however, the administration of the benefit adds a further bureaucratic level of procedure to be followed, monitored, and enforced which will undoubtedly add asset management costs to a development.

Many developers will, nevertheless, wish to provide direct community benefits as part of their development proposals as this is often intrinsically linked to their business values.

Community ownership has so far proved to be unpopular with developers and investors due to the difficulty in giving partial control to a non-commercial third party. If this measure is brought in, very careful thought needs to be given to governance and ownership structures. Many of the perceived benefits of shared ownership can be achieved through more complex community benefit arrangements.

The consultation closes on 16 July 2025. Stakeholders with an interest in the policy are invited to make their submissions on the government website at: Community Benefits and Shared Ownership for Low Carbon Energy Infrastructure - Department for Energy Security and Net Zero - Citizen Space.

Alternatively, responses can be sent by email to: energy.infrastructure.benefits@energysecurity.gov.uk

Tomi Agbonifo, paralegal at Osborne Clarke, assisted in preparing this Insight.