Index linking the floor price benchmark continuously over time

The Scottish Community Coalition on Energy recommends that the floor price benchmark should be index linked continuously over time. That way, when a project is set up the starting community benefit payment floor price will be whatever the current level of index linked benchmark is at that moment and will then continue to grow from there.  

Why the contribution is important

Under the current proposals, the starting payment of £6000/MW/year for community benefits would be fixed regardless of the year that the project became operational, and only from then onwards is it inflation linked. This will result in disparity between the benefits paid to communities from different projects, based on when those payments start.  If the starting floor price is index-linked continuously over time that will smooth those disparities out and make a fairer system.

by LizMurray on March 16, 2026 at 10:43AM

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Comments

  • Posted by Flecala March 16, 2026 at 16:23

    The £5,000 per MW installed figure was established in 2019. If index-linked from that date the new figure would be in excess of the recent £6,000 figure announced. This is simply not good enough.

  • Posted by Clephan March 17, 2026 at 09:09

    Agree - Community Benefit guidance amounts should be index linked (to RPI or CPI) with a reference date.

  • Posted by LoreineatBingera March 17, 2026 at 14:38

    I totally agree the floor price benchmark should be index linked continuously over time. I refer particularly to BESS and the fact that in our area 4 have been agreed with another 1 in the offing. All within 1km of each other because of the need to link to the nearest Sub Station. However, because of NESO's moratorium on grid connections for the Highlands of only 4041 until 2035 out of a total of 27,400+, this means that community benefit funding agreed now may not be applicable until grid connection is achieved. Therefore it is important the floor price benchmark should be index linked continuously of the start date.

  • Posted by PeeblesCommunityCouncil March 18, 2026 at 15:00

    Same comment as we made in respect of the comment labelled "Community benefit" by Neacreath on February 19, 2026 at 08:56PM. That is:
    Agree with Neacreath's recommendation and would go further to say that, in our opinion, the public understands inflation and what the term index linking means.
    We note that the 2014 guidance called for benefits "equivalent to at least £5,000 per MW per year, index linked" and the 2019 guidance called for "equivalent to £5,000 per installed megawatt per annum, index linked." Many in our community are deeply upset that both the Scottish Government and wind farm developers have failed to index link the starting figure of £5,000/MW/annum.
    The real value (adjusted for inflation) of £5,000 nominal is worth less in real terms each year – as Neacreath points out, payments need to be £8,630 just to keep pace with inflation.
    Even the suggested "increase" in the recommended annual fund level to £6,000 is actually a decrease in real terms.
    Can we please ensure that all future rates, and all future discussions of community benefit be clear to talk about index linked, inflation adjusted, real terms community benefits.
    If the Scottish Government intends to give communities a 20% increase in community benefits – as the £6,000 figure appears designed to be understood – then we look forward to a recommended community benefit baseline at the start of 2026 of approximately £10,356 nominal and ongoing increases to maintain real terms equivalency to (2014 £)6,000.
    Or is the white paper intent on continuing to erode the real value of community benefits?

  • Posted by Insight26 March 18, 2026 at 16:38

    Absolutely. Of course the starting point should rise with inflation, and CBF index-linked from the upped starting point.

    Otherwise its value declines rapidly with inflation.
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