On 17th June 2026, the UK Government’s Department for Energy Security and Net Zero (DESNZ) released a report called “Get connected: How community energy can turbocharge the transition”.
Sounds great doesn’t it? You would expect the report to identify all the ways that the community energy sector can play a key role in helping the Government achieve its decarbonisation targets, alongside a list of ways that the sector will be supported.
However, the report concludes that community energy is at serious risk of being left behind in the UK’s clean energy transition. Despite the Government’s ambition of 8GW of community energy by 2030, the Committee found no credible roadmap, no clear accountability across regulators and agencies, and a regulatory framework that systematically disadvantages community projects compared to commercial developers.
The report is 64 pages long, so we’ve summarised the key takeaways for you…
Key Proposed Legislative and Regulatory Changes
Pricing and revenue
- Replace the Smart Export Guarantee with a Community Energy Export Guarantee (CEEG). This would be a government-underwritten floor price guaranteed for 15–20 years, modelled on the Contracts for Difference regime that larger commercial developers already access
- Ring-fence a portion of the £1bn Local Power Plan specifically for community-owned (not merely "local") projects, with a published GW sub-target.
- Revise procurement rules so local authorities can more easily enter Power Purchase Agreements with community energy organisations
Local supply
- The Government has six months to produce a regulatory framework enabling community generators to sell electricity directly to local consumers.
- Ofgem's P441 modification should be approved and implemented by summer 2026. If not, the Government should introduce legislation equivalent to the Local Electricity Bill to create a proportionate local supply licence.
Grid connections
- Shift away from "ownership agnosticism" — regulators (Ofgem, NESO, DNOs) and GB Energy should be given explicit mandates to prioritise community energy projects.
- Agree a regulatory definition of community energy to allow it to be differentiated from commercial developers across the connection process.
- Grant community energy special status so Distribution Network Operators can treat community projects more flexibly.
Planning
- Amend the National Planning Policy Framework (NPPF) this year to make community benefits from community energy projects a material consideration in planning decisions.
- Legislate to distinguish community equity ownership from community benefit payments, so ownership stakes are an express material consideration — separate from donations, which a 2019 Court ruling effectively treated as potential bribes.
- DESNZ should ensure stronger coordination between NESO's high-level spatial planning and local area energy planning, with dedicated funded roles in local authorities.
- GB Energy's advisory service should add a dedicated planning function.
Shared Ownership
- The Secretary of State should use powers in the 2015 Infrastructure Act to give communities the right to purchase a minimum 20% stake in renewable facilities in their area at fair market price (up from the current voluntary 5% norm).
- Incentivise commercial developers to engage constructively with community organisations, and provide support so shared ownership arrangements are genuinely mutually beneficial.
- DESNZ should ensure stronger coordination between NESO's high-level spatial planning and local area energy planning, with dedicated funded roles in local authorities.
- GB Energy's advisory service should add a dedicated planning function.
Governance
- Establish a dedicated national community energy unit immediately, with clear governance and accountability mechanisms.
- Give Ofgem a deadline to produce a formal definition of community energy in time for inclusion in the Energy Independence Bill.
What community energy organisations should watch closely for in the next six months
1. P441 decision (summer 2026) — Ofgem’s ruling on this modification to the Balancing and Settlement Code is pivotal. If approved, it clarifies rules for local energy trading below primary substations and could unlock local energy clubs at scale. If rejected or delayed, the Committee expects the Government to bring forward primary legislation. Track this closely.
2. GBE Capital Toolkit (expected summer 2026) — GB Energy is due to publish its funding mechanism covering development grants, construction finance, and local investment. The criteria for accessing this funding are still being developed. Organisations should engage early to understand eligibility and influence how community-owned projects are prioritised.
3. DESNZ consultation on mandatory shared ownership — The Department has committed to consulting in 2026 on using the Infrastructure Act 2015 to mandate community stakes in renewable projects. This is the mechanism that could unlock shared ownership at scale. Responses to this consultation will matter enormously.
4. National Planning Policy Framework reform — The Committee explicitly calls for NPPF amendments this year. Organisations should monitor the planning reform process and consider submitting views, particularly on how community ownership should be defined and weighted in planning decisions.
5. Regulatory definition of community energy — No formal definition currently exists, which the report identifies as a root cause of many barriers (grid connections, planning, shared ownership eligibility). Watch for Ofgem’s work on this and any related provisions in the Energy Independence Bill as it progresses through Parliament.
6. GB Energy funding conditions — The report recommends attaching partnership conditions to GB Energy grants to prevent councils and communities being pitted against each other (as happened with the Public Sector Decarbonisation Scheme). Organisations should advocate for this safeguard and monitor whether it is adopted.
What community energy organisations should watch closely for in the next six months
We are hopeful that the community energy sector will enjoy a renaisance under the UK Labour Government.
Certainly the release of the Warm Homes Plan and the Local Power Plan presents a fantastic opportunity for community energy organisations to work alongside town and parish Councils, expanding local ownership of clean energy generation and embedding true energy security throughout the country.
We just hope that instability at the top of Government and the competing priorities of Defence and Welfare don’t compromise the lofty promises that have been made.
We will be holding our local politicians to account, and encourage you to do the same.
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