Decc feels community spirit

The Community Energy Strategy goes beyond the community benefit model, often dismissed as ‘bribery’, to assure people a stake in the infrastructure popping up next door, says Megan Darby.

Community” is a magic word. It transforms “blots on God’s creation” into “power to the people”. Or so the government must hope.
The word windfarm does not come up in the press release for the government’s Community Energy Strategy. “Solar” appears once. “Community” 38 times – although nowhere is it exactly defined. Are we talking about a village? A school? Everyone within a mile radius? The people who turn up to planning meetings? Those who are busy watching telly and don’t care where the electrons come from? No matter.
The strategy covers a multitude of funds and initiatives: none of them large, many recycled from earlier announcements. The biggest number is £10 million for an Urban Community Energy Fund. There is £1 million to support volunteers helping vulnerable consumers to cut their consumption and £100,000 for a community energy-saving competition. Last but not least – hey, the best things in life are free – is an unbudgeted “one-stop shop” for information on how to develop a community energy project.
The prize is not huge, either. On the power generation side, some 60MW of renewables running today are “community-owned”. By the Department of Energy and Climate Change’s (Decc’s) most optimistic projection, this will rise to 3GW in 2020. A 50-fold increase in six years would be impressive, but it still only gets us to 1.4 per cent of ­forecast electricity demand.
Climate change minister Greg Barker, with characteristic enthusiasm, talks of a “decentralised energy revolution” that will “help to break the grip of the dominant big energy companies”. With a 1.4 per cent market share?
His boss, energy secretary Ed Davey, takes a more restrained line, focusing on household budgets. He says: “Community-led action, such as collective switching, gives people the power to bring down bills and encourage competition within the energy market.”
There are tangible results here: Cheaper Energy Together has helped 21,000 households to save an average of £131 by switching. That is more than double the relief offered by the prime minister’s “green crap” cuts. Collective switching can help to reach vulnerable customers who perhaps have not switched before and do not have access to the internet.
To fixate on the numbers is perhaps to miss the point, however. All trends start small. The real message of the strategy is that how you do something is as important as what you do. It is a thoughtful document that lists myriad ways people can collectively get involved with energy, from generation to energy saving to demand management to switching. Importantly, the tone is positive – a welcome change from the spin of empowering communities to block windfarms that accompanied last June’s community benefits announcement.
One important theme is ownership of generation projects. Decc wants renewables developers to “substantially increase” shared ownership of new windfarms, hydro and solar schemes. By 2015, “it should be the norm for communities to be offered the opportunity of some level of ownership by commercial developers”, the strategy says.
This is quietly radical. It goes beyond the community benefit model, too easily dismissed as “bribery”, to assure people a stake in the infrastructure popping up next door.
Peter Capener, the consultant commissioned to analyse the potential in renewable electricity, estimates community projects generate 12-13 times as much value to be reinvested into the local area as commercial models.
Developers will know, from bitter experience, how much time and money can be wasted when a community rejects a plan. Genuine partnership, skilfully handled, can avoid such sorry outcomes.
It is also a relatively untapped source of investment. RWE’s renewables arm, Innogy, has offered employees shares in one of its German schemes. At a briefing earlier this month, bosses said they were considering community investment options. While administratively complex, they point out such offers can be mutually beneficial. An individual can get a better return than the 3 per cent available with a savings account, while still costing the company less in interest payments than a commercial investor.
There is more work to be done on how exactly developers deliver on this community ownership idea: the detail has been kicked to a “taskforce”.
While the industry generally supports the notion, developers are wary of mandatory rules. A Renewable Energy Association survey published in November 2013 showed six out of ten members agreed that local ownership could boost support for energy infrastructure. However, only 11 per cent thought it was a good idea to make a community offer mandatory. Some 53 per cent said mandatory rules would create too much bureaucracy and 33 per cent argued good community engagement conferred a competitive advantage and should be left to the market.
Some kind of template for community investment would help, says Maf Smith, deputy chief executive of Renewable UK. “If you look at where investment from the community has worked well, in places like Germany and Scandinavia, there has been a common model, so you don’t have to start from scratch every time.”
The money involved may be pitiful, but it is hard to argue with the intention, to engage people with energy in a positive way. Long may it last.