Highland communities could miss out on guaranteed financial benefits from some of Britain’s largest renewable energy developments after major pumped storage projects were left outside new UK Government legislation.

Angus MacDonald, Liberal Democrat MP for Inverness, Skye and West Ross-shire, has warned that the Energy Independence Bill fails to provide sufficient protection for communities hosting major electricity infrastructure.

The legislation, introduced to Parliament on 4 November, establishes a framework for mandatory community benefits from certain renewable energy developments.

However, its current provisions cover onshore wind and ground mounted solar generation, leaving pumped storage hydropower outside the proposed requirements.

That exclusion is particularly significant for the Highlands, where major developments at Coire Glas, Loch Kemp and Loch Earba represent billions of pounds in potential investment.

Together, the three projects have a planned generating capacity of approximately 4GW, making the region an important part of Britain’s future electricity storage network.

Pumped storage works by using electricity to move water uphill into reservoirs, allowing it to be released through turbines when electricity demand increases.

The technology can help balance renewable generation and provide electricity when wind and solar output is insufficient.

MacDonald argues that communities hosting infrastructure of this scale should receive lasting financial benefits rather than relying entirely on voluntary arrangements.

Responding to the legislation, he said:

“Rural Scotland is crucial in Britain’s move to electrification, yet the multi-billion-pound investment in renewables is contributing minimal benefits.” 

“Communities in the Highlands have a right to expect a lasting return from the energy infrastructure being built on their doorstep.

“These projects will operate for generations, and the benefits for local people must reflect the scale and duration of that investment.

“The Minister for Energy, Michael Shanks MP, has said in Parliament that communities hosting renewable projects must benefit.

“Yet, the Government’s Energy Independence Bill fails to guarantee meaningful community benefits.

“There is no minimum payment, no fixed rate and no certainty about what communities hosting these developments will actually receive.

“I am particularly concerned that pumped storage hydropower has been left out altogether.

“That is a significant omission when the Highlands is expected to host a massive 4GW of pumped storage projects, enough to power Scotland almost twice over.

“The Government must explain why pumped storage has been excluded from these provisions, and set out how it intends to ensure that communities hosting these projects receive a fair return.”

The Bill’s community benefit provisions are contained in Clause 117, which defines the generating stations covered by the proposed legislation.

Under the current wording, pumped storage is not included, although ministers would have powers to amend the definition through regulations approved by Parliament.

The Government has indicated that mandatory benefits for eligible wind and solar developments could be calculated according to their generating capacity, with minimum rates established through secondary legislation.

Its published proposals suggest annual payments of £5,000 per megawatt for eligible onshore wind developments and £700 per megawatt for ground mounted solar projects.

Those figures are proposed rates rather than requirements already in force.

For Highland communities, the question is whether comparable arrangements will eventually apply to pumped storage developments, which could operate for generations.

The Government has presented its legislation as a way of ensuring communities share in the benefits of Britain’s transition towards cleaner energy.

However, unless the provisions are extended, the major pumped storage schemes planned for the Highlands will remain outside this particular mandatory community benefit framework.

With billions of pounds in potential investment and substantial infrastructure planned across the region, the question of what local communities receive in return is becoming increasingly important.