What is community energy and how can it deliver affordable bills and lower carbon emissions?
BHESCo is one of the best known community energy groups in England, who have been working hard since 2013 to bring fairness, accountability, and sustainability to the energy sector.
But what exactly do we mean by ‘local energy’ and what are the benefits to local people?
The UK Government once saw this flourishing sector as a vital way of bringing the public on board with the renewable energy transition, but it has since fallen out of favour and much of the support that was available has been withdrawn.
We believe that with the right support local energy communities can play a key role in the transition away from fossil fuels, helping to drive down energy costs and carbon emissions for homes and businesses throughout the UK.
What is community energy?
When we talk about community energy we are talking about residents from the same town or city coming together to install renewable energy or energy saving equipment in the places where people live, work and play.
A community-led energy project is usually conceived and designed by people who live in the local area, and the engineers and contractors engaged to undertake the installation are normally local too.
When the people developing an energy project live in that community, other local residents can have confidence that the project will deliver real economic and environmental benefits for the area.
Establishing publicly owned clean energy communities is often seen as an alternative to the capitalist model of big, profit driven corporations.
A community energy company is usually a hyper-local not-for-profit co-operative, where decision making is shared equally and benefits shared locally.
Community solar energy for homeowners
Perhaps the best known type of a people-led energy project is community solar power.
There are a few different kinds of community solar project which offer different pros and cons depending on circumstances.
One simple type of community solar initiative could be a solar energy collective buying scheme where residents throughout a street or neighbourhood decide that they will all get rooftop solar panels.
When lots of property owners come together to negotiate a price for a neighbourhood solar power scheme they can achieve significant savings on the cost of the equipment and the fee to installers.
Brighton and Hove City Council recently undertook a programme like this with their Solar Together group buying exercise.
Community scale solar power plant
A different kind of community solar project is a community shared solar farm, such as the Westmill Solar Park in Wiltshire in England.
Under this model, the shared solar array is paid for collectively by people from the local area. This could be done through a green bond offer or a community share offer, where investors become co-owners of the solar farm.
Once the solar panels have been installed the community solar plant is connected to the national electricity grid so that the energy generated can be exported to homes and businesses.
The price for the electricity can be set by the owners of the community solar plant, helping to ensure that they are fair and affordable.
In this way, when a shared solar farm is owned by and run in the interests of the local community, residents can be assured of an affordable and environmentally sustainable energy supply for decades.
It is clear that establishing sustainable energy communities is a much better response to the energy crisis than the Energy Security Strategy announced by the UK Government.
Community wind energy
Another great option for those wanting to develop a local low-carbon energy project could be a community-owned wind turbine.
Onshore wind is the cheapest form of new electricity, and a community wind energy project is a comparatively straight-forward idea for local residents to get behind.
One thing that is essential for a successful community wind power project is the emotional buy-in from those living near to the potential wind turbine site. Getting planning permission for onshore community wind projects can be difficult and it is important to make sure that the community engagement team is able to minimise any push-back from people opposed to the idea.
A recent example of a successful community wind farm project being developed in the UK is the one by Ripple Energy, who have two sites located in Scotland and Wales which will provide renewable wind power for over 20,00 households.
How are community power projects financed?
Most community power projects are funded through a community share offer or a green bond offer.
Investors in the project become shared owners of the renewable energy assets.
The electricity generated from the system is sold to customers at an agreed price-per-kilowatt rate which is often well below what it would cost to purchase energy from a commercial energy supplier.
Over a number of years, the upfront cost of the renewable energy system is paid back to the project investors, plus an additional interest payment which is offered to incentivise the initial investment. This is what BHESCo mean when we refer to our ‘Pay As You Save‘ financing.
In this way, the upfront costs for new renewable energy projects can be met by the local community, who in turn receive a financial return for their investment. Furthermore, those who actually receive and use the electricity generated by the system will enjoy a significant long-term saving on their ongoing energy costs.
Community energy in Brighton and Hove
The City of Brighton and Hove, having the only Green MP in all of the UK, has long been a recognised as an area for producing innovative sustainable businesses, and Brighton is home to two of the country’s most successful energy co-operatives.
Brighton Energy Co-op were established in in 2010, and a few years later Brighton and Hove Energy Services Co-op (BHESCo) was founded.
Together these two organisations have attracted over 1,000 members, raised more than £1.5 million of community finance, and completed more than 100 green energy projects across Sussex and the South East.
Community energy in the UK
The UK has around 420 active community-led energy organisations who are engaged in a huge variety of net zero community initiatives.
There is practically no type of technology that the UK green energy community is not working with, and projects vary from community shared solar projects and energy efficiency programmes to clean energy community events and low carbon transport initiatives.
Together, it is estimated that the people powered energy community in the UK has a combined energy generation capacity of 220 megawatts (MW) of clean electricity.
With the right level of support and the removal of certain bureaucratic barriers, it is estimated that 2030, the sector could save £150 million in consumer bills, redistribute £19 million to the local economy and create 8700 jobs.
Community energy in Europe
Whilst the UK can be proud of its vibrant and dynamic energy community, the scene in Europe is arguably even stronger.
In Germany 25% of all renewable energy is owned by community projects, and in Denmark almost each town or village has its own community owned clean energy project, including an 82 MW offshore wind farm that is cooperatively owned.
The European arm of the ethical clothing brand Patagonia recently launched a campaign called ‘We The Power’.
In addition to demonstrating some of the amazing successes that have been achieved by people across the continent, the campaign calls on policymakers to support people powered energy initiatives in their region.
The Patagonia ‘We The Power’ campaign believes that, given the opportunity to achieve its potential, by 2050 citizen energy communities could collectively boast more than 260 million members, each helping to generate up to 45 percent of the European Union’s electricity from locally owner energy sources.
Clean energy for rural and remote communities
In the UK, many rural communities are not connected to this national gas grid, which means that they typically reply on oil and Liquid Petroleum Gas (LPG) for heating and hot water.
This is not only expensive, but highly polluting and completely at odds with the UK’s national goal for achieving net zero carbon emissions.
For this reason, accelerating the take up of renewable energy in rural areas is extremely important. In particular, there is an emphasis on developing low-carbon heat networks which can replace existing fossil fuel based heating systems. A heat network delivers heat to multiple properties from a single heat source such as a ground source heat pump. Alternatively, air source heat pumps can be installed individually in each property.
In addition to the community energy challenge in rural locations, it is often the case that the properties in these areas are hundreds of years old and extremely inefficient when it comes to keeping heat in. Therefore, improving the energy efficiency of these beautiful old homes must be a priority. It is well and good to develop a community wind power project or community solar energy in rural communities, but if that energy is going to waste then nothing much has been achieved.
Thankfully, the UK Government has recognised the crucial significance of helping the countryside to decarbonise, and has established the Rural Community Energy Fund, which provides development funding for clean energy in rural and remote communities.
What is the potential for people powered energy?
We hope that given a fair amount of support and a more amenable environment in which to develop new projects, renewable energy communities can become established throughout the UK and Europe, helping homes and business to reduce their energy costs and take action on the climate crisis.
When enough renewable energy capacity has been developed in a town or city, they can eventually be connected together to form a community microgrid.
Sustainable energy communities could at times exist entirely independently from the national grid, meeting 100% of their heat and power demands with community owned renewable energy.
Community solar companies could even export excess electricity to neighbouring towns and villages, selling the energy for a profit which could be redistributed through a community benefit fund.
Is there a community energy group near you?
There is no time like the present to take the plunge and get involved in a local clean energy initiative.
To find our if there is any community solar near you or a community-owned wind power project in the pipeline, we recommend visiting the members section of the Community Energy England website. You can view a map of all of the active organisations throughout the UK and visit their website if you would like to join.
If there is not an active group in your local area then you can find information and resources to help you establish your own organisation, with the help of experienced mentors from the sector.
We believe that the future is people powered, and we hope that you too will commit to the global community for sustainable energy.
Thinking about developing your own local energy project?
Leave your details below and a member of BHESCo’s Projects Team will contact you soon to discuss how we can work together to achieve your community power ambitions.