Community ownership of energy resources in the UK is in danger of being left behind in the transition unless the government takes urgent action, warns the Energy Security and Net Zero (ESNZ) Committee in a report today.
The committee says this risks missing an opportunity to build public support for the government’s 2030 targets and for the renewable sector.
After considering evidence gathered for its inquiry into the sector, the committee says it is “unconvinced that the government will lift local and community energy generation from the 411MW produced in the UK in 2025 to deliver its target of 8GW by 2030”.
It says the current regulatory framework disproportionately disadvantages community energy projects compared to commercial developers – with no clear benefit to the overall energy system.
The UK energy retail system acts as a block on local consumers taking advantage of reduced prices in local energy markets, it adds, while the cost and complexity of obtaining a supply license are prohibitive barriers for small community projects.
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The Committee sets out a series of key areas where reform is needed now:
- Designate community energy as a strategic priority to move existing community-owned projects up the grid connection queue, and direct regulators and network distributors to remove barriers to connections
- Implement the existing right for communities to take a minimum 20% stake in onshore and offshore renewable projects in their local area and lift the minimum stake developers must offer from 5% to 20%.
- Within six months, produce a regulatory framework to allow community energy generators to sell electricity to local consumers.
- Make community share and enhanced community benefits material considerations in planning applications for commercial renewable projects.
- Change procurement rules to make it easier for local authorities and community energy organisations to work together.
- Create a new Community Energy Export Guarantee to help community energy projects to raise finance.
- Instruct GB Energy to provide financial, legal and technical expertise at scale to community energy initiatives.
- Establish a framework of the roles and responsibilities for companies, regulatory bodies, agencies and organisations to achieve the 8GW target.
“Communities are an important part of the energy transition if the government is going to hit its targets,” said committee chair Bill Esterson MP. “Across the UK, communities are putting in huge effort and resources to host large-scale renewable projects. But they face a system stacked against them, and too often they don’t share the benefits.
“This has real consequences for the UK’s clean energy targets and for our economy. Public support for the energy transition and local investment opportunities could be undermined, with the risk of energy bills staying higher than they need to for longer.
“Our report is calling for urgent action through the new Energy Independence Bill. We’re asking the government to prioritise community energy projects for grid access, guarantee communities are offered the opportunity of a minimum 20% stake in local renewable energy development and make it easier for community generators to sell their energy locally.”
Responding to the report, Matthew Vickers, CEO of Community Energy England, said: “Community energy gives people throughout the country the opportunity to have a stake in Britain’s energy future.
”The committee heard the evidence and has sent a clear message around the need for action from government.
”We’re pleased to see so much of what we are calling for in our Up The Energy campaign reflected in the committee’s recommendations.
”Market reforms and the forthcoming Energy Independence Bill can unlock cheaper, cleaner and more secure community energy.”
