Moves to claw back more cash from windfarm companies for Highland communities will reduce the number of new developments by 80% - a loss of £2 billion for the local economy -  according to a new report.

Highland Council passed a new policy called the Social Value Charter (SVC) this Summer which means energy firms building windfarms are required to increase their community contributions by 150% from £5k per megawatt to £12.5k.

Independent economic development consultancy Biggar Economics has produced a report which suggests the policy could mean that four out of five onshore windfarms – which already have consent – will now not go ahead because they are no longer financially viable.

Highland is considered critical for the Scottish Government to meet its target to produce 20GW of onshore wind by 2030.

Previous research has estimated that around 2.6GW will require to be constructed in the region to meet this target.

Researchers said 'outliers' particularly windy or easy-to-access sites will go ahead regardless but said that based on discussions with developers the SVC could reduce the number of new onshore wind projects developed by 80%.

This would mean that only 520MW is constructed in this time frame and a loss of £2billion of investment over the next 30 years, according to the report.

It found that while the value of those projects that do proceed would provide more per MW, the amount of community benefit funding that would be lost as a result of projects not going ahead would be greater.

Highland Council introduced the policy to capitalise on the rapid increase in energy companies planning to invest in the area and help meet the cost of a £2billion investment plan, half of which will be spent on schools and roads over the next 10 years.

Council leader Raymond Bremner said there was a need to ensure "the wider Highland community can benefit more equally and fairly" from windfarm profits.

The report analysed the expenditure and economic impact of seven onshore wind farms in Highland using supply chain data, including projects in the Great Glen and Sutherland.

It said that over the lifetime of those projects, the majority of the economic Gross Value Added (GVA) benefit comes from the supply chain, including companies that work on the development and construction of the projects.

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Simon Cleary, energy transition director for Biggar Economics, said: “Our analysis shows that four in every five onshore windfarms in the Highlands, which are currently viable, will not go ahead as a result of this new policy.

“The 150% rise in contribution makes the Highlands uncompetitive against the rest of the UK and beyond.

“These are international companies, working across the globe, who may decide that it is simply no longer good business to develop in Scotland in comparison to other countries, particularly in Europe.”

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The Scottish Government has a target of 20GW of onshore wind by 2030, which will require almost 2GW of onshore wind projects constructed each year.

Approximately 25% of this pipeline is in Highland, and previous work by BiGGAR Economics for Moray and Highland Council has estimated that around 2.6GW will be constructed in Highland between 2024 and 2030 if Scotland were to achieve its targets.

Sarah Stone, director of social value agency Samtaler, said: “It's absolutely right that onshore wind should deliver benefits for communities and lots of responsible developers are working really hard to ensure that their wind farms do exactly that.

“Highland Council officials told the councillors who voted for this scheme that they had consulted with the industry but either that wasn't true, or they didn't listen.

“We all know it’s a difficult time for the public sector, but as well as he £5,000 per MW they pay to communities onshore wind developers also pay millions in business rates and deliver projects which bring all the economic benefits from the jobs that are created and businesses who are supported in the supply chain.

“It’s a delicate balance but it needs a rethink so it works for everyone.  The community benefit of a project that doesn’t go ahead is zero.”

Angus MacDonald, MP for Inverness, Skye and West Ross-shire said he was "broadly aligned" with the SVC, but had proposed a different solution.

He said: "Community benefit should be a financed by an increase to the electricity bill on all users in the UK, which will be an increase of 1 or 2% I estimate."

Previous research by Biggar Economics, focussed on energy developments in Moray and Highland, concludes that community benefit packages should remain affordable for the developer.