John Peters, Managing Director, Engage Consulting focuses on community-based energy projects and how this is offering local people a chance to get involved
Communities throughout the UK are being encouraged to take charge of their energy, with the launch of the government’s first Community Energy Strategy, which outlines new opportunities for communities to get involved in energy projects on a local level.
The strategy is ambitious and wide ranging – it includes a series of initiatives and investments to enable the growth of community energy and remove barriers with the aim of starting what it describes as an ‘energy efficiency revolution’ in the UK. It also wants to see a growth in renewable energy projects that are community-based.
The strategy highlights that government now sees a major role for community-based energy projects and the important contribution individuals and local communities can have in helping to reduce energy consumption, create greener energy and keeping costs down for consumers.
5,000 community groups have already been set up across the UK since 2008 and the Government’s new strategy aims to support hundreds more. Whilst the UK’s community energy sector is still relatively small compared to some European nations such as Germany or Denmark, the government’s strategy highlights the potential of community energy and that Britain should be committed to helping these projects happen.
The government aim to make community energy an easier option and achievable by more people, which will enable communities and individuals to exercise real market power and add a further dimension to wider energy market reforms. Helping to give the power back to people, many successful community energy projects are already up and running.
One of the projects highlighted in the document is Amberley Primary School in Newcastle who was able to generate 25% of the school’s electricity requirements through installing solar panels and a wind turbine in a project funded by the Big Lottery Fund. Previously the school had been spending around £8,000 per year on electricity.
Growth in consumer interest
There appears to be significant consumer interest in community energy schemes – largely driven by the desire for people to reduce energy bills.
Research from DECC found that over half the people they surveyed claimed that saving money on bills would be the major motivation for getting involved with community energy schemes. Indeed, 51% of people said that they would be motivated to get involved in community energy if they could save money on their energy bill and 40% said they were already interested in joining a community energy group, and taking part in collective switching or collective purchasing schemes.
The government suggests there are four main areas where communities can get involved in energy projects:
• Generating energy (electricity or heat)
• Reducing energy use (saving energy through energy efficiency and behaviour change)
• Managing energy (balancing supply and demand)
• Purchasing energy (collective purchasing or switching to save money on energy)
The government believes that community involvement in generating electricity – whether fully community-owned projects or part community ownership of larger commercial projects – can also help achieve our goals of decarbonising the power sector – ensuring that 15% of energy is provided by renewable sources by 2020.
To help communities generate energy the government has launched a £10m Urban Community Scheme that will provide neighbourhoods with up to £150,000 each to generate their own renewable energy from wind turbines, solar panels or hydro-electric plants. This investment follows the £15m DECC / Defra Rural Community Energy Fund (RCEF) launched in 2012 to provide finance for rural communities in England to explore the feasibility of, and planning for, electricity and heat projects.
Local neighbourhood groups will be invited to apply for grants of up to £20,000 for feasibility work, while loans of up to £130,000 will be made available to support projects from planning applications through to connection to the grid.
The government has also pledged to work with communities and Ofgem to look at ways to enable communities to supply energy, including promoting schemes such as ‘Licence-lite,’ which removes barriers for smaller suppliers and makes it easier and more affordable for them to enter the market and sell their energy.
Another key focus is to help communities purchase energy at a good price. Guidance and co-ordination will be offered for community energy purchasing projects. A £1m “Big Energy Saving Network’ Fund has also been pledged to support the work of volunteers helping vulnerable customers to reduce their energy.
Lastly, the strategy also covers managing energy demand. Ofgem’s Smart Grid Forum is tasked with considering barriers to the development of Smart Grid which includes community energy schemes and community storage. The government is working the Smart Grid Forum to ensure there is a co-ordinated and joined up approach to formulating policies and regulation and that involves community stakeholders.
The government’s strategy is bold and ambitious. It has the potential to fundamentally change Britain’s energy market – placing communities in control of collectively purchasing and generating energy and playing an integral role in maintaining supply and reducing carbon emissions.
For this vision to happen, the strategy needs major support – from regulators, local authorities, consumers, the developers of Britain’s energy infrastructure and financial investment. However the signs are encouraging for community-based energy projects and there is now a real opportunity for individuals and communities to take control of their energy.