Community ownership of energy resources is in danger of being left behind unless there is urgent action, says the Energy Security and Net Zero Committee.
The Committee said was “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, and the cost and complexity of obtaining a supply license are prohibitive barriers for small community projects, it said.
The Committee sets out a series of key areas where it says 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.
Bill Esterson MP, Chair of the Committee, said:
“Communities are an important part of the energy transition if the government is going to hit its targets. 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.”
