More support to be made available for community-based energy projects under new Government strategy

Out-Law News | 29 Jan 2014 | 12:33 pm | 1 min. read

A package of grants and incentives is to be made available to local communities that come together to purchase or generate their own energy as part of the UK's first Community Energy Strategy, the Government has announced.

It is allocating £10 million to an Urban Community Energy Fund, offering grants to urban communities in England that wish to develop renewable energy projects which provide local economic and social benefits; plus a further £1 million to support the work of volunteers to help vulnerable consumers reduce their energy use. Communities are also being encouraged to compete for a minimum of £100,000 in funding for innovative energy saving projects, with mentoring support available to help the six leading business plans progress.

"The cost of energy is now a major consideration for household budgets, and I want to encourage groups of people across the country to participate in a community energy movement and take real control of their energy bills," said Energy Secretary Ed Davey. "Community-led action, such as collective switching, gives people the power to bring down bills and encourage competition within the energy market."

Community energy covers a number of different types of project including locally-owned renewable energy generation, communities joining forces to make their homes more energy efficient or share energy-saving advice, and collective purchasing or switching agreements. According to Government estimates, energy generation schemes involving local communities could supply enough electricity for one million homes by 2020, while at least 5,000 community groups have participated in energy projects in the UK since 2008.

The Government's community energy plans are based on the idea that every community that wants to take forward its own energy project should be able to do so. As well as setting out the details of funding opportunities available for such projects, the strategy also proposes the creation of a Community Energy Unit within the Department for Energy and Climate Change (DECC), and a new 'one stop shop' information service for interested groups.

The strategy also proposes stronger partnerships between community energy projects and 'enabling partners' such as commercial developers and local authorities. By 2015, the Government expects that it "should be the norm" for interested communities to be offered some level of ownership of new, commercially-developed onshore renewables projects in their local area, according to the document.

Other proposals set out in the strategy include plans to double the feed-in tariff (FiT) threshold for community energy projects from the current 5MW generating capacity to 10MW generating capacity, and the opening of discussions with the EU to allow the Green Investment Bank (GIB) to invest in the community sector. The document confirms that the UK has recently begun informal discussions with the European Commission about potentially including small-scale onshore wind and hydro projects within the bank's lending criteria.