THE ENERGY TOOLKIT
03. LEARN ABOUT COMMUNITY ENERGY
We recognised that none of us were experts in community energy orf renewables, and that we were on a steep learning curve. We needed to learn about energy. There is lots of advice and help if you know where to look for it…
WHAT IS COMMUNITY ENERGY?
In simple terms, community energy is a group of people coming together to generate, own, manage, or reduce consumption of energy. We intend to set up a cooperative or similar organisation, fundraising the investment required from local people and businesses, so that local people can own their own power. We then rent the roof space from the building/business owners, sell them cheaper energy, pay a dividend, or return to our investors, and with the little left over we can invest in local energy projects such as alleviating fuel poverty. The other part of the equation is to help people prevent heat loss from their houses via better insulation or other heat loss measures, and to help people use less energy (e.g., only boil what you need in the kettle, turn your thermostat down a degree, don’t leave entertainment equipment on standby etc).
Community energy projects are predominantly renewable using power from the wind, sun, and rain. The most common type is rooftop solar PV. The main aim of these is to save local people money, as well as less reliance on dirty, fossil-fuel power stations which are miles from where the power is eventually used. So, a decentralised and community owned model.
A great place to start it the Rough Guide to Community Energy, which can be found here. (please note it has a small section on the Feed in Tariff, which is now defunct, so ignore that bit but the rest is really useful.
The Community Energy England website gives more information about what community energy is.
The Co-Op Hub has some excellent sources, reference material and case studies. They can also provide financial support in setting up community energy co-operatives. You can find more information here.
The Green Alliance has a useful summary here.
Octopus and Midshires Co-Op have set up a small grant funding scheme to help start-up community energy co-ops. More information can be found here.
Co-Op UK has good material on setting up co-operatives and CICs here.
A LITTLE BIT OF HISTORY…
Traditionally, energy generation in the UK has been centralised, with the UK relying on power from fossil fuels or nuclear generation connected into the transmission network. Through the 1990s and 2000s, more distributed renewable energy was generated, and this was largely driven by the improvement of technology, particularly regarding wind power. Much of this development was privately funded but there were community energy models emerging.
In 2008 the UK government introduced the Feed in Tariff (FiIT) incentive, which prompted a solar generation revolution, in conjunction with Renewable Obligation Certificates (RoC’s). FiIT was a government subsidy which paid generators of renewable energy for every unit of power they created. It was aimed at the sub-5MW+ market. This incentivised people to purchase renewable energy sources such as solar PV with the certainty they would be able to recoup the capital cost. The main aim was to grow the market for renewable energy, and there are now around one million solar PV systems active in the UK. The FiIT was initially very lucrative, but was gradually scaled back as the market grew. However, it enabled a significant growth in community energy, both independently and in partnership with commercial developers. FiIT and RoC were available for many different renewable technologies (and still are) – anaerobic digestion, wind farms, hydroelectric power, tidal power, biomass etc. Community energy can work with any of these technologies.
For further information of Solar Photovoltaics Deployment from the Department for Business, Energy & Industrial Strategy (BEIS), see here.
The payment of FiIT for new projects ceased in 2018 and the development of new energy projects plateaued. Now, the growth of solar PV projects has begun to rise again. The payback for projects can be longer without government incentives, but there is still a steady growth. New schemes, if well designed, can still make very good returns (11% of better in the best cases). The way systems are designed has changed, focusing a lot more on ensuring the site uses as much power as possible to derive a return on the investment. The good news is that the cost of installing solar PV has dropped significantly (by about 50% over the last few years) and this has again made it affordable for many homes. Several interesting and innovative business models post-FiIT are being explored, which should increase the number of local energy projects. There are significant economies of scale in renewable investments. Small-scale developments on domestic properties are very expensive, at around £1.80/watt. Large-scale roof tops (250kW) is about £0.70/watt and lower, and large-scale ground mounts can be as cheap as £0.55/watt.
IMPROVING ENERGY EFFICIENCY
Hampshire County Council’s climate plan suggests mass retrofitting of existing housing stock (as older buildings lose more energy) if we are to meet the carbon reduction targets. This is expensive – estimates are about £15-30k per house. Currently there appears to be no budget for this from the Government. The newer the house, generally the more energy efficient they are. In Overton we have a mix of old pre-1900 properties with solid walls, ranging up to more energy efficient newbuilds with cavity walls (although not yet carbon zero). It makes sense to help residents address energy efficiencies such as better insulation and more energy efficient heating systems and appliances as a first step. People can also save money on bills by switching energy suppliers – preferably to one that is using green energy sources.
WHAT ARE THE BENEFITS OF COMMUNITY ENERGY?
Community energy can have a profound impact on the local community, whether this is from the opportunity to invest in a community renewable scheme, or support and educate the local community about energy saving. At its heart, community energy is about using and producing energy more cleanly to improve our locality. A project of this sort helps pull a community together with a common goal and helps save money and carbon. It also has the benefit of offering the opportunity for residents to invest for a small return.
From a wider perspective, there is a need to decentralise energy in a socially responsible way and local projects that benefit the community is one way to do this. There are many benefits, including carbon-free electricity, less pollution, lower-cost electricity, a financial return to the community shareholders, creation of high-quality jobs, financial payments to the local community, and alleviation of fuel poverty.
The biggest driver for community energy is to decarbonise the energy system, both through less (and smarter) consumption, and through the displacement of carbon intensive generation. This is so fundamental that many councils have declared climate emergencies, and many countries have signed up to the Paris Agreement. In the UK, this translates to the UK being net carbon zero by 2050. The grave environmental impacts for the world cannot be underestimated.
COMMERCIAL DEVELOPERS VS COMMUNITY DEVELOPMENT
Community energy is very different to commercial alternatives which involves private companies developing in local areas that take the value and income out of the community. Private developers can bring in huge sums of funding that deliver big projects, but many communities find this an imposition, and so creating a local alternative can be a credible solution.
The biggest difference between commercial and community energy projects is that the community is involved from the start. Community energy projects build consent from the word go, with members of the energy group engaging with residents. A local friendly voice is far more effective (and trustworthy) in explaining the benefits of community energy. This consent factor is crucial in two key areas in developing energy projects – planning and fund raising. Ultimately you can’t build without either, as so the harder you work to engage with your community, the more funds you will raise, and the more supporters you will gain.
There is a link here to the world temperature projection graph, showing 1.5°C versus our current trajectory.
A local project gives a group of people the opportunity to make a difference to their community, while st also contributing to the big picture. A fundamental shift in the way energy is produced happening now, and this will continue over the next two decades. Help and education from community energy groups allows for grassroot changes to take place. We want all the parishes to be a part of this.
HOW COMMUNITY ENERGY CAN WORK FOR SUSTAINABLE OVERTON
With thanks to Martin Heath from Basingstoke Energy Services for providing this diagram.
RESEARCH AND UNDERSTANDING
There is a lot to read and absorb.
Take your time – maybe split research between different team members to share a summary.
Talk to other community energy companies and network, there is a lot of experience out there to draw on and from lots of very friendly people.
It is important that everyone understands this – it is a complex area, and easy to get confused.
It is worth doing some bullet points/Q&A’s so that you can answer questions about various things that are likely to crop up.