On 27th January 2014, DECC published a Community Energy Strategy to encourage community projects that focus on generating, managing and purchasing energy and reducing energy use. The Strategy brings together existing policies and initiatives with new actions to provide a complete package of support.
Community energy projects range from community-run advice services, to setting up a wind energy project to power local houses.
Although the Strategy applies to the UK, parts of the energy system are devolved to different extents in Wales, Scotland and Northern Ireland, and as such each policy measure within the Community Energy Strategy applies differently in each territory. The Devolved Administrations retain the right to develop policies for devolved areas.
Access to finance is one of the major barriers faced by community energy projects, according to research commissioned by DECC into community energy. A range of financial incentives and support services were announced as part of the Community Energy Strategy, including:
- A £10 million Urban Community Energy Fund for community energy generation projects in England.
- £1 million of additional funding for the Big Energy Saving Network, to support the work of volunteers helping vulnerable consumers to reduce their energy.
- A community energy saving competition, offering £100,000 to communities to develop innovative approaches to saving energy and money.
- A"one-stop shop" information resource for people interested in developing community energy projects. This resource will be developed with community energy groups and the government intends that it will be self-sustaining.
In relation to lending for community projects, the Strategy confirmed that the UK has recently begun informal discussions with the European Commission about potentially including small-scale onshore wind and hydro projects within the Green Investment Bank's lending criteria. The Government will also continue to work with the sector to explore new ways of addressing access to finance such as crowd-funding and aggregation models.
In addition to this the Government will shortly be consulting on implementing the increase in the threshold for FITs from 5MW to 10MW for community projects.
The Community Energy Strategy also states that developers of energy infrastructure need to involve communities more. This could involve offering a share of ownership of wind turbines or a solar array to the local community. It is intended that shared ownership of new commercial onshore renewables developments, should become a reality by 2020.
For more information on community energy, please contact our Renewables Team