ResPublica's publication The Community Renewables Economy: Starting up, scaling up and spinning out, reveals that community owned energy could grow 89 times its current size if the right national and local policies are put in place. In Germany, community energy accounts for 46% of all energy produced from renewables. In the UK this figure stands at just 0.3%.
The ResPublica Green Paper argues that if community owned energy is to become more commonplace, councils must remove the significant barriers faced by communities during the planning process. Community energy could generate £30m a year in tax revenue for cash-strapped local councils, and drive down high energy bills by increasing competition in the energy market. But ResPublica warns that councils must step up to the challenge, understand their new role and help, rather than hinder progress.
Drawing on new data, collected and analysed by the independent research institute, Sustainable Community Energy Network (SCENE), the study reveals a growing appetite for community owned power. Over the last decade, community energy capacity has increased by over 1300% to nearly 60MW. By 2020, on current trends, the sector will grow nine-fold to 550MW. But with leadership and investment from local authorities and with the right national policy framework, the sector is capable of delivering almost a fifth of total renewable energy capacity - this would be equivalent to 5.27GW by 2020.
The growth of community energy is self re-enforcing as two-thirds of communities reinvest or intend to reinvest revenue from renewables in further projects of energy efficiency.
The report argues that a key to achieving scale is joint ownership, where communities are able to partner with private developers, local authorities or businesses, with greater capacity, resource and financial capability. But it stresses that there are a number of barriers to be addressed, including funding, financial know-how and legal advice. Local and national Government must work together to understand the financial benefits and help catalyse growth.
In response to the report, Greg Barker MP, Minister for Energy and Climate Change, said:
"The Coalition is committed to helping hard pressed consumers with the rising cost of living. When it comes to energy bills, this includes supporting communities to take more control over local generation projects, while also empowering them to reduce their energy demand, tackle local fuel poverty, and get the best deal on their energy supply.
I warmly welcome the ideas in this report on helping communities navigate the planning system, and on forming productive partnerships so that they are better able to take an active role in their own local projects. Our aim is to help communities and local businesses seize this exciting opportunity."
Maria McCaffery, Chief Executive of RenewableUK added:
“This report highlights the exciting prospect of communities working more closely with local wind farm developers, local businesses and local authorities on jointly-owned projects. Using this socially and economically-inclusive model, we have an opportunity to redefine the relationship between communities and developers to unlock a significant growth in community energy, particularly in onshore wind. This will enable all of us to reap the economic and environmental benefits of wind energy at a truly local level”.
Ramsay Dunning, General Manager, Co-operative Energy said:
”We whole heartedly support this report and the belief that community energy could be a major player in the UK energy mix. Co-operative Energy plans to increase six-fold the amount of community and independent renewable energy in its supply in the next twelve months, and to then double it again twelve months thereafter. The vast majority of the UK welcomes renewable energy projects when communities are meaningfully engaged.”
Key recommendations of the report include:
- Extend the feed-in tariff to include joint ownership models. The Department for Energy and Climate Change (DECC) has recently announced that it is planning to increase the threshold for community projects under the feed-in tariff (FiT) to enable larger community energy projects to benefit. DECC should permit jointly-owned community energy projects, other than just those wholly-owned by the community, to be included within this extension.
- Establish a portal for developer-community ‘match-making’. DECC has proposed that the department will establish a register of community benefits. Such a register should be extended to include a portal so that developers can express interest in forging a partnership with a community, and vice-versa.
- Encourage local authorities to act as financial intermediaries. Given the new rights granted through the Localism Act 2011 to borrow and invest, local councils are well placed to begin to both invest and financially benefit from community energy projects. Local authorities should establish links with local housing associations, businesses and churches, as well as social finance organisations like Big Society Capital to explore these opportunities.
- Pilot local energy development plans and a planning fast-track for community renewables projects. Government should pilot local energy development plans. In producing such plans, neighbourhood forums should highlight opportunities for communities to develop and own new local energy projects. Where significant community ownership is involved, additional support should be offered to the community as it embarks on the planning application, and such developments should be fast-tracked through the planning process.
- Establish ‘Community Commissions’. Government should pilot a series of ‘Community Commissions’ to assist with highlighting development and investment opportunities in community renewables. ‘Community Commissions’ are neighbourhood-level panels consisting of around 30 voters drawn randomly from the electoral roll in a given area, and selected through a stratified sample to reflect the local demography. The ‘Community Commission’ pilots would be posed the question: ‘How can communities become more engaged with local energy production?’, and would be encouraged to conclude with a series of practical recommendations. The local authority would have a duty to adopt the community’s recommendations.