Greg Barker with the Haringey Big Community Switch team, London 27 January 2014.
Energy Minister Greg Barker with the Haringey Big Community Switch team, North London 27 January 2014.

The UK government has launched a Community Energy Strategy which will make it much easier for the owners of buildings to install renewable energy.

It intends to broaden support available for community energy projects so that people can join together to reduce their energy use or purchase and generate their own energy.

The Community Energy Strategy includes the following elements:

  • £10m Urban Community Energy Fund (UCEF) that will support urban communities in England to develop renewable energy projects and be open to all communities in England that are not eligible for the existing Rural Community Energy Fund (RCEF). Up to approximately £20,000 is available for feasibility work and loans of up to approximately £130,000 to support planning applications and develop robust business cases which will attract further investment.
  • A further £1million has been allocated to the so called Big Energy Saving Network (BESN)  which helps some third sector organisations and community groups  support vulnerable consumers in reducing their energy costs.
  • A £100,000 community energy saving competition that will offer a minimum of £100,000 to incentivise communities to develop innovative approaches to saving energy and money. Six of the finalists will be given access to mentoring support to help them develop their business plans in more detail. More information is available from communityenergystrategy@decc.gsi.gov.uk.

Already, since 2008, at least 5,000 community groups across the UK have participated in energy projects. For example, the Ashton Hayes Going Carbon Neutral project in Cheshire has saved local households an average of £300 a year through encouraging behaviour change and installing simple energy efficiency measures.

The UK renewables industry has indicated that it wants to see a substantial increase in the shared ownership of new, onshore renewables developments and is already developing approaches to community engagement and benefits.

The Secretary of State for Energy & Climate Change, Ed Davey, has asked an industry taskforce to work with the community sector and report back to him by spring 2014. This report will include a framework and timetable for implementation, and a level of ambition for community ownership of new renewables developments.

It is expected that by 2015 interested communities well as a matter of course be offered some level of ownership of new, commercially developed onshore renewables projects. The Government hopes that this will go some way to more words removing local opposition to wind farms where it occurs.

District heating

Importantly, district heating schemes are recognised under the Strategy. This was welcomed by the Director of the Combined Heat and Power Association (CHPA), Dr Tim Rotheray, who said said it "presents an exciting opportunity for communities to benefit from the value of small scale heat networks. Community heat networks can be a vital element in regenerating neighbourhoods, re-connecting communities with local authorities which often sponsor the schemes, and providing residents and local businesses with affordable heat." 

The government has already set up a Heat Networks Delivery Unit to support smaller scale community heat networks. Local authorities can get financial assistance from the unit if they want to develop local heat networks in their municipality.

The industry is now waiting for further guidance from Government on how the Heat Networks Delivery Unit and the Urban Community Energy Fund can help facilitate community-led heat networks.

Reactions

The Strategy has been welcomed by the industry, but there are criticisms that it doesn't go nearly far enough.

While the Government has made big claims for the strategy, it comes four years later than a similar one in Scotland. It also appears to cave in to a roll-back of energy efficiency measures for new homes begun in another government department.

The Department Communities and for Local Government has recently scrapped a measure that would have ensured that all new homes built after 2016 would have been zero carbon, claiming that the alleged additional expense of doing so this was preventing homebuilders from working to tackle the problem of the chronic shortage of new homes in the country.

There is a proposal in the Community Energy Strategy that community energy funding could come from an 'Allowable Solutions' fund into which housebuilders could put money rather than invest in high levels of insulation and zero carbon technologies such as solar thermal.

The definition of community energy is also limited and needs to be broadened to include social housing providers, schools and public services providers.

Further, there is concern that at the local level the electricity grid needs to be strengthened to allow more locally generated power to be fed into it.

The Head of External Affairs, Leonie Greene, of the Solar Trade Association, a member of the task force, said: “The public are very concerned by the lack of competition in our energy markets and poll after poll shows they back renewable energy. So it's great to see the UK Government recognise the vast potential for everyday communities to directly own renewable energy and by doing so, to break open our consolidated electricity sector. International experience shows it is bottom-up investment by everyday people and organisations that can really drive renewables. At the same time this gives people real ownership of the energy they depend on, and increases support for local schemes."

But it said that there needed to be further reform of the Feed-in Tariff scheme to enable community groups to take advantage of them. Ms. Greene added: “We want to see as much community-driven solar as possible, but it is starting from a very low base in the UK and faces many barriers, including cultural novelty. Perhaps the most exciting potential is for industry partnerships with local communities to accelerate progress.”

Julia Groves, managing director of renewable energy investment fund, the Trillion Fund, said that the strategy "will give people wanting to invest in community energy projects more confidence that they are not throwing their money into a black hole". She said that returns on investments in renewable energy typically range from between 3-6%. This is above the rate of inflation and certainly well above the current bank interest rates.

Nick Clack, senior energy campaigner at the Campaign to Protect Rural England, which has sometimes been against onshore wind farms, acknowledged that "Community energy has the potential to play a critical role in reducing the impact of our energy needs on the countryside and delivering low-carbon energy". But he added that there's still "a long way to go if communities are to overcome the financial and regulatory barriers they face in running and getting projects off the ground".

Naomi Luhde-Thompson, planning campaigner at Friends of the Earth, commented that the government should require larger energy developments to have mandatory share offers for local people, making energy bills more affordable for many.