Sudden reductions in subsidies and tax relief shocked the community energy sector, but, as the dust settles on a new, less hospitable financial landscape, energy bencoms are looking ahead to the post-subsidy era.
They are turning their attentions to working smart; experimenting with new solutions including smart meters, smart grids, energy storage and direct supply to customers. Implementation is in its early stages, but bencoms and their members are leading the way in finding uses for new technologies, identifying obstacles and testing them in the real world.
Ramsay Dunning, managing director of Co-operative Energy, believes time is of the essence.
“The community energy sector in the UK will spend much of 2016 and 2017 building out the projects for which finance and subsidy has been secured under now defunct Feed-in Tariff and Enterprise Investment Scheme [tax relief] regimes,” he says, “which means that by the time we hit 2018, we need to have developed radically new models for our sector.
“The development of these new models will be a major focus of both this year’s Community Energy Fortnight and Co-operative Energy’s annual Community Energy Conference. We need to look afresh at the role of local government and the crowd-sourcing of finance, and we need to look anew at everything from net metering [the billing mechanism which credits solar power producers for the electricity they supply the grid] through to storage.”
Community Energy Fortnight takes place over 3-18 September 2016.
According to Emma Bridge, chief executive of Community Energy England (CEE), it is critical that energy bencoms look at how current as well as future projects are delivered to maximise both efficiency and community benefit. “There may be efficiencies to be made through reassessing the operations and maintenance of renewable energy schemes or through looking at energy efficiency as well as energy generation,” she says. “For a lot of groups, the next nine months or so will be mainly focussed around the delivery of current pipeline projects.”
Jonathan Atkinson, project manager at the Carbon Co-op, which works to improve energy efficiency in homes, says there are lots of ways to make and save money. “It’s about delivering high quality energy services that people want,” he says. “For example home energy assessments, procuring energy efficiency works, brokering bulk discounts, offering membership offers and services and, increasingly, by playing a part in the energy system, mobilising people and communities and enabling them to participate in things like smart grids.”
The Carbon Co-op is working with energy co-ops in Belgium, Greece and Spain towards supplying energy direct to customers with a 3.5 year smart grid pilot project. “We’re looking to establish a co-operatively owned aggregator – a key element of the energy infrastructure post smart meter roll out.
“We’ll be testing open source technology, battery storage, electric vehicles and lots more. Our contention is that co-operative action is necessary for smart grids to become viable in the UK.”
I think we need to share and replicate our activities in an open, collaborative manner
The Carbon Co-op works on open source projects to facilitate dissemination of technologies within and beyond the co-op.
“The very basis of these are sharing and co-operation,” Mr Atkinson says. “We work closely with OpenEnergyMonitor and their kit can now be found in all kinds of applications, from electric vehicles to wikihouse to smart grids.
“We’ve made our whole house energy assessment open source so others in the community energy sector can benefit from it too. We’re now looking at social franchising, a co-operative approach to replication.
“I think we need to share and replicate our activities in an open, collaborative manner. Open source requires a clear commitment but in an increasingly interconnected energy system it’s becoming a prerequisite.”
Emma Bridge says: “It’s important to start to link together more effectively all aspects of community energy; reducing, purchasing, managing and generating energy. Community energy bencoms need to be able to share learning with other groups. Volunteering and effective community engagement will continue to be fundamental.”
Bencoms can share knowledge and pool resources by speaking to other groups nearby to match their requirements. They can log their details at the Community Energy Hub hub.communityenergyengland.org, which will shortly include a regional functionality to make sharing information easier.
CEE will be helping to identify a transitional funding model as community energy travels towards subsidy-free status. “The sector needs support if it is to continue to deliver extra value to communities during this period, such as through a replacement to the Feed-in Tariff, Social Investment Tax Relief for community energy schemes or innovation funds to test new models,” she says.
CEE wants to work with national and local governments and community groups to increase support for the sector and to identify and remove barriers, including the regulatory and financial barriers to local supply by bencoms.
“Above all we need a long term and sustainable energy policy to enable investor confidence and give groups time to work up new models,” Ms Bridge adds.
Partnerships with local councils are helping in places such as Plymouth, Barnsley, Swindon, Cornwall and Edinburgh. Bristol City Council is due to share the results of its community energy pilot soon.
Jonathan Atkinson says Greater Manchester councils’ progress towards setting up an energy company is hopeful. “We think that civic and community energy collaborations are one of the key ways to achieve scale within the energy system,” he says.
Community energy co-ops have the potential to start to fit all the pieces of the jigsaw
Andy Heald of bencom Generation Community, which works to develop new forms of finance for the low carbon economy, says the partnership model between councils and bencoms has survived the roll-back of government support.
“It takes a long time to get into councils,” he says. “The good news is that the councils we’re working with still accept the model, but they’re asking us to apply it to technologies which aren’t affected by the changes in subsidies, like combined heat and power (CHP).”
Jonathan Atkinson says: “Our advice is to avoid basing any business plan around government policy as it’s constantly changing. We’ve been able to take advantage of things like ECO [Energy Company Obligation], Feed-in Tariff or Green Deal Cashback but we’ve never become reliant on them, which is just as well because they’re either much reduced or no longer here.
“The members’ homes we’ve retrofitted have averaged 60% energy reductions and up to 91% on budgets averaging £40,000 with householders using 0% interest loans. These are the kinds of levels needed to meet our carbon reduction targets and they’re becoming affordable to more of the population.
“All these things fit together; smart grids, energy efficiency and renewable generation.
“Community energy co-ops have the potential to start to fit all the pieces of the jigsaw.”