RESS Community Benefit Funds – Consultation Open

The Department of Environment, Climate and Communications recently published a consultation on the Community Benefit Fund obligations on developers under Ireland’s Renewable Electricity Support Schemes. The consultation will be open for feedback until 14 February 2025 and the final version of the Community Benefit Funds Rulebook is planned to be published in April 2025. Our Energy team examines the scope of the new Rulebook and its impact on existing and future projects.
The consultation on Community Benefit Funds (CBFs) is now open. The Department of Environment, Climate and Communications (DECC) is seeking feedback on proposed changes to the CBF rules under Ireland’s Renewable Electricity Support Schemes (RESS). The DECC is conducting a consultation to gather feedback from all stakeholders on the operation of the CBFs. This includes insights into the learnings, successes, and challenges encountered now that the first RESS-supported projects have reached commercial operation and the initial CBFs have been registered and begun funding local communities. This consultation is proceeding simultaneously with the consultation on the RESS 5 Terms and Conditions, and it is open to submissions until 14 February 2025.
Consultation on Community Benefit Funds
One of the terms and conditions of the RESS auctions is the requirement for CBFs. Successful generators must establish a fund to be used for the benefit of the community located in proximity to the project. Since the first RESS 1 project reached commercial operation, a number of CBFs have been established and have provided funding in the designated areas. The DECC is now conducting a public consultation which seeks feedback from all stakeholders regarding the operation of the scheme.
Introducing the new Community Benefit Funds Rulebook
The DECC first published a Good Practice Principles Handbook in 2021 which provided guidance on the establishment and operation of CBFs. The Handbook supplemented the principal obligations set out in the Terms and Conditions (Ts&Cs) of each of the RESS schemes. Now the DECC is consulting on a set of new proposals with the aim of publishing a new Community Benefit Funds Rulebook. It will replace the Handbook with a set of binding rules that updates some aspects of the operation and governance of the CBFs that are not currently covered by the Handbook.
The consultation indicates explicitly that the new Rulebook may also require updates to be made to the RESS 2, RESS 3 and RESS 4 Ts&Cs relating to CBF obligations.
The consultation is now seeking stakeholders’ views and feedback on thirteen areas, including:
- Increasing the level of transparency: the consultation will welcome view on the introduction of a list of measures and requirements to improve the level of transparency of the CBFs. It is anticipated that these measures will apply to all projects supported by any of the RESS schemes. The measures would include the publication of the name of beneficiaries of funds received and information on successful and unsuccessful projects that applied for funding annually. This may be sensitive!
- Compensation for local authority-mandated funds: the RESS Ts&Cs allow generators to offset, against their CBF obligations, contributions paid to separate local authority-mandated funds. The DECC is considering removing this provision in the RESS 5 Ts&Cs with the aim of providing clarity and certainty for the local communities. Also, where set-off is permitted, the DECC is seeking feedback on how developers should be permitted to confirm that the relevant payments made to Local Authority-mandated funds have also complied with RESS Ts&Cs.
- Near Neighbour Payments: the RESS Ts&Cs set a mandatory minimum payment of €1,000 to neighbours within 1 km of a wind project and optional payments to neighbours located within 1 km to 2 km of a wind project. The DECC is now considering setting a fixed amount instead of a minimum one. The RESS Ts&Cs also set out that all households in the vicinity of a wind project and within 2 km from the nearest turbine are currently eligible to receive either mandatory or optional Near Neighbour Payments from the project developer.
- The DECC is now asking for feedback on the amendment of the eligibility criteria of “household” to refer to the tenant or owner who has the property as their primary residence at the time the project achieves commercial operation. The DECC is also considering introducing a limitation to the overall amount spent on Near Neighbour Payments to 50% of the overall CBF. The proposed limit centres on the fact that payments can prove problematic in instances where projects have a large number of neighbours.
- Simplified governance structure for smaller Community Benefit Funds: Small Community Benefit Funds face challenges regarding their governance and decision-making procedures compared to bigger funds. The DECC is proposing introducing a simplified governance structure for small funds. It is also seeking feedback on what level of deemed annual energy generation, or annual Fund amount would be an appropriate threshold.
- Role and structure of the Fund Committee: the DECC is reviewing the current role of each Fund Committee, which is currently the decision-making authority on selecting CBF recipients. It is proposing to change its role to an advisory one. Additional guidelines on how the Fund Committee is selected are also being considered to avoid conflicts of interests and enhance transparency on the decision-making process of CBFs.
- Administration costs: at present, up to 10% of the annual CBF is allowed to be used to cover the administration costs of the Fund. The DECC is considering increasing this amount during the first year of operation of the Fund to an amount between 15% and 20% of the Fund, given the initial costs involved in setting up the CBF.
- Application of UN sustainable development goals: with the current CBF requirements, a minimum of 40% of the Funds must be allocated to local initiatives linked with any of the 17 UN sustainable development goals. The DECC is now considering relaxing this limit so that a broader range of local community projects can be eligible for CBF funding.
The DECC has clarified that there will be no amendments to the level of contribution required to be made to the CBF by a RESS-supported project. This remains at €2 per Megawatt hour of electricity generated during a year and it is considered as a minimum payment, not a cap. The CBF rules do not prevent the projects from making other payments to locals during the planning or construction periods as required. However, the DECC does not recognise, for CBF purposes, any funds distributed in advance of reaching the commercial operation date.
For the purposes of the RESS 5 Ts&Cs, it is proposed that projects that produce electricity, regardless of whether they remain part of RESS, will have to maintain the CBF for the duration of their support period, which is usually 15 years. This principle was already introduced in the RESS 4 Ts&Cs.
Key dates
Consultation on CBF opened for submissions |
20 December 2024 |
Consultation on CBF closes for submissions |
14 February 2025 |
Publication of the RESS Community Benefit Funds Rulebook |
April 2025 |
Comment
Stakeholders have until 14 February 2025 to submit their feedback to the DECC by email or post. A workshop is also expected, with event details to be published in early 2025 and held in the following weeks. The CBF consultation will then culminate with the publication of the CBF Rulebook, which will also helpfully provide updated guidance to the Ts&Cs for RESS 1-4.
The RESS 5 Terms and Conditions are also currently under consultation. Responses to the CBF consultation are expected to inform the development of the RESS 5 T&Cs. The final version of the RESS Community Benefit Funds Rulebook and the RESS 5 Ts&Cs are planned to be published in April 2025.
For more information on the provisions of the new Rulebook and how it may impact any anticipated projects, contact a member of our Energy or Construction, Infrastructure & Utilities teams.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
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