Community energy sector hit hard by loss of government support

Community energy has suffered another ‘worst year ever’ with new generation installations half what they were in 2019, due to the removal of virtually all government support, says...

Community energy has suffered another ‘worst year ever’ with new generation installations half what they were in 2019, due to the removal of virtually all government support, says a new report on the sector.

In its annual report, Community Energy State of the Sector 2021, sector body Community Energy England (CEE) adds that the sector defied the problems to increase outreach, create jobs and help tackle fuel poverty.

Community energy groups contacted 358,000 people and delivered over £200,000 to Covid related causes, out of a total of £3.13m given to communities in 2020. Fuel poverty and energy efficiency work saved £2.9m for customers on their energy bills, the report adds. The sector created 82 new jobs in 2020.

Beyond the financial aid, 53 organisations mobilised their existing networks and assets to support local people by collecting medicines and driving vulnerable people to vaccine appointments; providing free EV charging for key workers; supplying free energy to community centres; and redistributing surplus food.

“Over the past year the sector has shown its resilience, perseverance, ingenuity and determination to tackle climate change, even in the face of reduced support, by diversifying and innovating in search of new business models,” said CEE.

“Policy must establish a fair playing field for community-owned generation, which enables so much other community energy work, and recognise that supporting community energy projects is good value for money and essential to achieving net zero.”

The survey identified 14 newly constituted organisations, and across England, Scotland and Wales there is interest from parish and town councils, and community organisations with other priorities, who want to deliver energy projects to address climate change.

Community energy organisations employed over 430 people and raised over £30m in community shares, the report say, and 34 organisations installed renewable electricity projects across the UK, compared
with 39 in 2019. More than 400 organisations continued to work on projects.

Community Energy England, and its sister organisations in Scotland and Wales, has long argued that engaging citizens in renewable energy projects is vital if the country is to hit its decarbonisation goals.

Policy asks

The report – citing policy recommendations made in May by MPs on the Environmental Audit Select Committee – sets out a series of policy recommendations to help the sector play a role in tackling climate change.

  • Re-mobilise community energy, remove barriers and build capacity by establishing a fair playing field for community electricity generation, enabling a route to market for community energyCreate a Community Smart Export Guarantee, to provide revenue certainty for community energy organisations equivalent to the commercial sector
  • Make community capacity building grant funds available for community energy organisations in all nations and regions, and at all stages of development. In England, reinstate the Urban Community Energy Fund and extend the Rural Community Energy Fund. In Scotland, complement CARES with early stage capacity building support for groups as demonstrated by the Community Energy Futures programme, and in Wales, continue and develop the Welsh Government Energy Service
  • Provide tax mechanisms recognising the benefit of community energy projects, via Social Investment Tax Relief eligibility and a community energy business rate incentive
  • Ensure communities have fair access to the grid, by reserving capacity for community projects and reducing or socialising connection costs for community energy generation
  • Develop a target for community and local ownership of new energy assets, and a shared ownership target for England and NI, as Wales and Scotland already have
  • Remove planning barriers to onshore community-owned wind energy projects
  • Introduce a meaningful commitment for all public bodies to buy community-owned energy
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