Community energy comes of age
Poll after poll shows that community energy projects, whether co-operatively owned renewables or local energy action groups, are astonishingly popular.
A survey last year commissioned by the Co-operative Group showed that a significant number of people opposed to wind farms changed from opposition to support if the scheme was community owned. And who could disagree with solar panels on schools or local energy action teams helping people to insulate their homes? It’s not surprising that politicians of all colours queue up to pledge their support. When Green Alliance worked with three MPs in their constituencies to explore the potential of community energy, the enthusiasm from politicians and local people alike was palpable.
Why we need community energy
There are sound reasons for community energy behind the soundbites. Schemes often have strong social benefits, combatting fuel poverty and providing an income stream for local projects. Local schemes help to build awareness of climate change and support for renewables. Most importantly, they provide a genuine, workable alternative to our broken energy market. Buying power (or insulation) from a local, community owned project is so much more satisfying than switching from one large supplier to another. Community energy has the potential to turn people from passive consumers into active participants in the energy system.
Strange, then, that until now, government has done very little to support community energy projects. A couple of years ago, it was really hard even to find anyone in DECC to take responsibility for the area. As a result, policy has never been designed with communities in mind, it’s been difficult, risky and expensive to get community renewables projects off the ground, as anyone who has battled with a local scheme will tell you. The system just isn’t designed for small players, and the complications involved in planning, permitting, grid connection and finance have proved insurmountable to many projects. Hardly surprising that less than one per cent of renewables capacity is community owned, compared to around a quarter in Denmark.
The most interesting thing about the new strategy: challenging the orthodoxy
So will the government’s community energy strategy, published today, turn this around? The answer, in two words, is: hopefully, yes.
The strategy isn’t perfect, but it makes a start on tackling the trickiest issues facing community schemes. There’s some straightforward support: a government backed advice service and a loan scheme for communities. But the more interesting changes are those which, if successful, could challenge energy market orthodoxy.
First, the government is stating that it wants commercial renewables developers to offer local communities an ownership share in local projects. In Denmark, by law, developers have to offer 20 per cent of the scheme for local people to buy into. DECC hasn’t gone that far, but there’s a hint that it will legislate if the industry doesn’t co-operate. So expect to see a rush of interest, particularly from wind developers, in all things community.
Second, DECC is asking Ofgem to work out whether communities could actually supply energy directly to consumers, rather than selling wholesale to the grid. There’s nothing definite here yet but, if this idea takes off, it could provide a radical challenge to the current Big Six supply model.
Third, DECC has set up a series of working groups to try to deal with the bureaucratic hurdles surrounding community projects, including planning, permitting issues for hydro projects and grid connection. All of these can stop a project in its tracks. It is also looking into Green Investment Bank support for community projects, which could help with tricky financing issues.
There is also a series of measures to support community heat, energy saving and switching intiatives which, to date, have been less well developed than renewables.
As you can see from this list, there’s still a lot of ifs and maybes. Today’s strategy may yet turn out to be a damp squib, if the initial enthusiasm gets lost in a quagmire of working groups and task forces. The challenge will be to use the political enthusiasm for the topic to push through the changes needed with enough vigour to create a real alternative to our broken energy market.