Community Energy - a missing piece of the energy a puzzle?

Community energy refers to green energy projects that are owned, managed, and controlled by local communities. Instead of electricity profits flowing to large companies, at present the financial benefits stay within the local area to fund community facilities. Ideally in the near future, this benefit could be widened to lower prices for households by locally producing and consuming electricity.

These projects often involve the installation of a solar farm or wind turbines on land near the local community for example on an area of land near your community.

The community energy company normally a Community Benefit Society typically raises the initial capital by launching a Community Share Offer, allowing local residents to buy shares. Shareholders then get paid interest on their shares and the profits generated after interest payments are used for the local community. At the moment, the Community Energy Company typically makes its money by selling electricity to the large suppliers at a relatively low rate per unit of electricity.

The largest community-owned solar installation in the country is the Ray Valley Solar Park in Oxfordshire which generates enough clean electricity to power over 7,000 homes.

Another notable pioneering example is Westmill Wind Farm Co-operative (Oxfordshire/Wiltshire border) which has five turbines completely funded by local community share allocations.

Setting up a community energy organisation is not simple. It involves purchasing the land, getting the energy infrastructure installed, negotiating a connection to the grid and then trading the electricity.  Community projects frequently face long waits and high costs in obtaining a grid connection. There is also no dedicated pricing mechanism for smaller renewable assets (under 5 megawatts).

The biggest issue, however, is that currently small generators are not allowed to sell their electricity directly to local people. There is proposed legislation supported by over 300 MPs (the Local Electricity Bill) which aims to enable community renewable energy schemes to sell their clean electricity directly to local households and businesses, breaking the monopoly of large, centralised utility companies.

This legislation would transform the sector: communities could then build a renewable energy facility that would guarantee low-cost electricity to local residents.

The UK domestic energy market is dominated by six major suppliers. Less than 0.5% of electricity generation in the UK is from community energy compared to around 30% in Germany.

There is huge potential for smaller-scale community renewable energy schemes that could be owned and run by local people. This could bring clean, cheap and secure energy to local homes and businesses and ensure profits are kept within local areas.

Note: for more info checkout Community Energy England communityenergyengland.org