The Department for Energy Security & Net Zero (DESNZ) is consulting on establishing a mandatory community benefits scheme across all large-scale low‑carbon energy infrastructure in Great Britain: https://www.gov.uk/government/publications/community-benefits-and-shared-ownership-for-low-carbon-energy-infrastructure/community-benefits-and-shared-ownership-for-low-carbon-energy-infrastructure-working-paper-accessible-webpage. Key elements include:

• Scope: Applies to generation and storage projects ≥ 5 MW (e.g. wind, solar, nuclear, LDES, marine, PSH).
• Purpose: Ensure local communities tangibly benefit – via cash or in-kind funds, shared ownership, local infrastructure, training and/or environmental improvements.
• Design questions:
  • Thresholds and funding levels: Options include per-MW or per-MWh formulas, scalable caps, technology-specific variation.
  • Appointment of a Fund Administrator governed by locals.
  • Options for shared ownership structures – evaluating whether to mandate under the Infrastructure Act 2015.
• Rationale and evidence:
  • Community funds improve local acceptance, reduce delays and internalise external benefits otherwise ignored.
  • International precedents show mandatory schemes (e.g. Ireland, Massachusetts) are more effective.
• Timeline:
  • A mandatory scheme could be in force by end of 2027.
  • Projects with planning consent before a defined cut-off may be exempt.

Insights on Pumped Storage Hydropower (PSH)

PSH (≥ 5 MW) would clearly fall within the scope of such a scheme, ensuring community funds apply, with funding per capacity or generation allowing community benefit contributions to be calculated using fixed, measurable project characteristics, making them more predictable and transparent. PSH sites often involve new water bodies, recreational areas and habitat restoration – ideal for community-in-kind opportunities such as staff training, biodiversity projects and eco-tourism spots. Strong community involvement (e.g. advisory boards via a Fund Administrator) can build trust and reduce planning delays tied to visual or environmental concerns around reservoirs, pipe runs and grid works.

However, PSH can attract higher construction costs, so community benefit contributions must be balanced carefully to avoid pushing up bills or risking project viability. This is especially relevant for PSH projects without guaranteed revenue. PSH's high upfront investment and long life may justify technology-specific funding caps or regional fund pooling to balance fairness with fiscal viability and prevent mega-projects from shouldering unsustainable obligations.

The bottom line for PSH stakeholders is that integrating community benefits and ownership elements early (before planning) can strengthen applications and community relations. However, it is important to design benefit models that reflect PSH's unique ecology and infrastructure, such as waterfront public access, job apprenticeships and environmental restoration funds.