Community-owned energy could grow to 89 times its current size if councils stopped blocking and started helping the industry.
A report from thinktank ResPublica, 'The Community Renewables Economy: Starting up, scaling up and spinning out', argues that if community-owned energy is to become more commonplace, councils must make its development easier.
Communities could generate £30m a year in tax revenue and drive down energy bills by increasing competition, the report says. But councils must step up, understand their new role and facilitate joint ownership.
The study reveals that over the last decade, community energy capacity has increased by over 1300 per cent to nearly sixty megawatts. By 2020, on current trends, the sector will grow nine-fold to 550MW.
In Germany, community energy accounts for 46 per cent of all energy produced from renewables. In the UK this figure stands at just 0.3 per cent.
But with leadership and investment from councils and the right national policy framework, the sector could deliver almost a fifth of total renewable energy capacity, equivalent to 5.27GW, by 2020, the report says.
Report co-author Caroline Julian said joint ownership was crucial in achieving this scale: “Communities should be able to partner with private developers, local authorities or businesses with greater capacity, and barriers including funding, financial know-how and legal advice should be removed,” she said.
“Local and national Government must work together to understand the financial benefits and help catalyse growth. Local authorities can and should lead the way and invest in clean energy.”
The report recommends training for planners and councillors to help them understand local government’s role in energy production and that the Department for Energy and Climate Change establish a ‘matchmaking’ portal for developers interested in partnering with communities and vice-versa.
The DECC recently agreed to increase the feed-in tariff threshold to include larger community projects. The report says this should cover jointly owned community energy projects, not just those wholly-owned by the community.
It also recommends councils work with housing associations, businesses, churches and social finance organisations to explore new rights to borrow and invest granted under the Localism Act.
Greg Barker MP, Minister for Energy and Climate Change, said the Coalition wanted to deal with rising living costs. “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,” he said.
“I warmly welcome the ideas in this report on helping communities navigate the planning system, and on forming productive partnerships so that they’re better able to take an active role in their own local projects.”
Ramsay Dunning, General Manager of Co-operative Energy, which sponsored the report, added: “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.”