‘A fair energy transition is important, but the legal basis must be sound.’

More and more local residents are receiving financial benefits for living near solar parks or wind farms. However, there is no legal basis for enforcing local resident schemes and community benefit funds, according to PhD candidate Dorien Bakker (28). She advocates for clear legislation.

Bakker will obtain her PhD on this subject at the University of Groningen on 18 December.

Why did you decide to delve into this topic?

'I really wanted to do socially relevant research. Since the 2013 Energy Agreement and the 2019 Climate Agreement, the government has been encouraging financial participation by citizens: it wants citizens to be involved in and benefit from the energy transition. Distributing the benefits and burdens fairly and reducing resistance from local residents should contribute to achieving the climate goals.

To this end, passive forms of financial participation are being used, whereby citizens receive benefits without having to invest in a solar park or wind farm themselves. Nowadays, a community benefit fund is the rule rather than the exception for large wind projects. In recent years, the local residents' scheme has been used for more than half of total wind production. Local resident schemes and community benefit funds are still less common for solar parks, but they do exist.'

What do these two instruments entail?

'A community benefit fund is a special fund into which a project developer pays a certain amount of money. That money is then distributed, often by a foundation, to realise social initiatives, ranging from a village festival to a food forest.

A local residents' scheme gives citizens within a certain radius of the project a financial benefit. This can be in the form of a cash payment, but also, for example, in the form of making homes more sustainable.'

There is a lot of resistance to solar parks, as evidenced by the years of opposition to the N33 wind farm near Meeden, for example. So this sounds like a good initiative?

'I think the energy transition itself is very important, and I understand that there is a need to arrange something extra for local residents and that the government wants to realise its climate ambitions. But it must be within the limits of the law. And that's where the problem lies. Various authorities are trying to impose specific requirements on financial participation, even though they have no authority to do so.'

In your thesis, you point out a number of problems. What exactly are they?

'If a government agency obliges a project developer to create a local residents' scheme or communitiy benefit fund, this does not comply with the legal principles of legality and specificity, two principles that form the basis of our democratic constitutional state.

In short, the principle of legality means that there must be a legal basis for far-reaching government actions such as requirements and prohibitions, but this is currently lacking when it comes to imposing these financial obligations on project developers.

The principle of speciality means that powers are granted for a specific purpose. Under the current rules, gaining support or financial participation is not covered by the current legislation.

You can see that governments are trying to steer towards financial participation in all kinds of ways, but it is unclear how far they are allowed to go in this regard. The Dutch Environment and Planning Act does not regulate financial participation, and I expect that the new Energy Act, which will largely come into force in January, will not meet the needs of practice.

This makes it unclear to project developers what exactly is expected of them. In addition, this lack of guidance can also lead to conflicts and major differences between projects, which in turn can cause dissatisfaction.'

What is your advice: how can this be properly regulated?

'Come up with a good legal framework!

The legislator must think carefully about what it wants to achieve. Does it primarily want to focus on gaining support, or is it striving for a fair distribution of benefits and burdens? This has an impact on what constitutes a logical demarcation of the area within which people or social initiatives can be eligible for a sum of money.

And attention must be paid to the scope of the scheme: you see that community benefit funds and local resident schemes are now mainly used for renewable energy projects such as wind and solar parks. But they can also be relevant for residents living near airports or salt extraction areas. That makes a difference to the question of which law you lay it down in.

I think the Dutch legislator could draw inspiration from Danish law. Denmark has very clear legislation with clear requirements for project developers, clear rules for defining the area and the size of financial amounts. This legislation has been in place since 2009 and has been evaluated and amended several times since then. It is a very good example of how legal certainty can be provided for citizens.'