After years of community energy groups struggling for recognition and resources, the UK government has finally delivered something significant, and it comes in the form of the Local Power Plan (LPP). Backed by up to £1 billion from Great British Energy, this represents the largest public investment in community energy in British history. But what does it actually mean for organisations like BHESCo, and will it truly make a difference for people in their communities?
What is the Local Power Plan?
At its core, the Local Power Plan is the Government’s answer to a simple question: how can communities have greater autonomy over their energy future?
Published in February 2026, the plan sets out how Great British Energy and the Department for Energy Security & Net Zero (DESNZ) will support community groups, local authorities, and public sector organisations to develop renewable energy projects.
The vision is bold: by 2030, every community in the UK will have the opportunity to own local clean energy assets. To get there, Great British Energy aims to support over 1,000 local and community energy generation projects in its first phase.
The four pillars of support
The Local Power Plan isn’t just about throwing money at the issue. It recognises that community energy has been held back by multiple barriers and tackles them through four distinct types of support:
1. Direct funding and finance
GB Energy is developing a “Capital Toolkit” launching in summer 2026, offering:
- Development grants for early-stage work, such feasibility studies
- Construction and operation loans to help projects get built
- Partnership funding for joint local authority and community group projects
- Local investment funding for direct project investment
This matters because access to affordable finance has always been one of the biggest barriers. Traditional lenders often see community projects as too risky or too small to bother with.
2. Expert advice and capacity building
Money alone won’t solve everything. Many community groups are run by volunteers who lack technical expertise in areas like grid connections, legal structures, or financial modelling. Great British Energy is creating:
- A network of regional advisors
- Access to commercial, financial, and technical specialist advisers
- Standardised templates and a "Community Energy in a Box" toolkit
What is this “Community Energy in a box” toolkit?
Think of it as a ready-made starter pack for anyone wanting to develop a community energy project. Instead of starting from scratch, groups will have access to standardised legal templates, financial models, technical guidance, and step-by-step project development resources – all in one place. This is particularly valuable for volunteer-run groups who don’t have the time or budget to commission expensive professional advice every time they hit a new challenge.
3. Developing scalable business models
This is where it gets interesting. GB Energy isn’t just funding individual projects; it’s trying to support the establishment of repeatable, bankable business models that can attract wider investment. As part of this support, they will be exploring:
- Virtual Power Purchase Agreements (PPAs)
What is a virtual PP?
A Power Purchase Agreement is essentially a long-term contract where a community energy project agrees to sell its electricity to a buyer – like a local school, business or council – at a fixed price. The “virtual” element means the power doesn’t need to flow directly between the two parties through a physical wire. Instead, it works through the wider grid, making it far more flexible and accessible for smaller community projects. For communities, this means a guaranteed income stream, which makes it much easier to attract investment and get projects off the ground.
- Smart Local Energy Systems (SLES) that allow communities to share power locally
- Aggregation models that bundle smaller projects together
- A "Local Energy Platform" to provide end-to-end business solutions
Right now, setting up a community energy project means navigating a maze of different systems, contracts, regulations and market mechanisms – often with no clear guidance on how they connect. The Local Energy Platform aims to be a one-stop digital solution that handles everything from project development and financing through to selling power and managing contracts. Think of it like an operating system for community energy – bringing all the moving parts together in one place so communities can focus on delivering projects rather than getting lost in admin and complexity.
4. Policy and regulatory reform
The Department for Energy Security & Net Zero is tackling the structural barriers that have frustrated community energy for years:
- Mandatory shared ownership: A consultation in 2026 will explore requiring large renewable projects to offer communities a stake
- Grid connections: Working with Ofgem to improve service standards and explore tailored support for community projects
- Market access: Removing regulatory barriers to make it easier for communities to sell and share locally generated power
- Planning reform: New National Planning Policy Framework consultation includes clearer policies for community energy
Brighton residents from the Preston Park Community Energy Programme – a collaboration between neighbours and BHESCo that’s turning rooftop solar into shared savings, resilience, and local ownership. This is community energy shaping the future envisioned in the Local Power Plan.
Real progress already made
The Local Power Plan isn’t starting from scratch. Over the past year, government investment has already delivered:
- £16 million through the Mayoral Renewables Fund, expected to save public buildings around £50 million in lifetime energy bills
- £5 million for the GB Energy Community Fund, supporting over 60 community projects
- £21.5 million in partnership with devolved governments, supporting over 80 schemes
- Up to £255 million for the Solar Partnerships Scheme, installing solar on 250+ schools and 260 NHS sites, with estimated savings of £520 million over 30 years
The challenges that remain
While the Local Power Plan is genuinely ambitious, significant challenges persist:
1. Grid connections continue to be a big hurdle
Anyone who’s tried to connect renewable energy generation in recent years knows this pain. While DESNZ is working with Ofgem to improve service standards, the fundamental capacity constraints haven’t disappeared. In Scotland, the Transmission Impact Assessment threshold of just 200kW (50kW for Scottish Islands) continues to create additional barriers that English projects don’t face.
2. The “Chicken and Egg” problem
Many of the most exciting elements like Smart Local Energy Systems and the Local Energy Platform are still in development. Communities need viable revenue models now to attract investment, but these solutions won’t be ready for months or years. Meanwhile, energy suppliers and market infrastructure providers haven’t yet stepped up to offer the community supply tariffs and peer-to-peer trading mechanisms that could make local energy sharing a reality.
3. Will £1 billion be enough?
It sounds like a lot of money, but spread across the entire UK until 2030, supporting “over 1,000 projects,” and covering everything from small feasibility grants to legal advice, planning consultancy, and policy reform, will it really be sufficient?
4. The shared ownership question
While mandatory shared ownership could be transformative, it’s still only at the consultation stage. The 2015 Infrastructure Act already provides powers to mandate this, so why the delay? And will the final design genuinely empower communities, or will it become a tick-box exercise for developers?
5. Devolved nations complexity
The plan commits to working with devolved governments and complementing existing schemes like Scotland’s CARES programme and the Welsh Government Energy Service. But the details of how GB Energy’s support will integrate with these established programmes and avoid duplication or confusion remain unclear.
What this means for community energy projects
For existing groups: The Local Power Plan validates everything you’ve been saying for years. It provides finance and resources to help organisations scale up, tackle that difficult next project, or get the professional expertise they otherwise couldn’t afford. The Capital Toolkit, launching in summer 2026, could be a game-changer for construction finance.
For new groups: The barriers to entry are coming down. The “Community Energy in a Box” toolkit, advisory services, and development grants mean you won’t have to reinvent the wheel or rely on finding that one volunteer with the right expertise.
For local authorities: The Partnership Fund recognises that collaboration between councils and community groups can achieve more than either could alone. The precedent of Energise Barnsley, which helped 321 council homes receive free solar, saving tenants over £40,000 in the first year, shows what’s possible.
The BHESCo team with local community members. Since 2013, BHESCo has been working at the grassroots to deliver community-owned renewable energy projects, long before national policy caught up. With the Local Power Plan now backing community energy at scale, the foundations laid by groups like BHESCo are ready to power the next chapter.
The road ahead
Great British Energy is taking a deliberately collaborative approach, launching an Expression of Interest process and promising to “build the details of our products collaboratively with the sector, finance providers and customers.” This is encouraging, as too often, government schemes are designed in Whitehall without input from the people who’ll actually use them.
The timeline shows concrete milestones:
- Spring 2026: Shared ownership templates, first partnership announcements, first grant schemes launched
- Summer 2026: Pilot projects and Capital Toolkit launch
- Autumn 2026: Full GB Energy Local product portfolio launch
- 2027-2030: Scaling up support across the development cycle
Our take
The Local Power Plan represents a genuine acceleration of government commitment to community energy. The £1 billion investment, the focus on capacity building, and the willingness to tackle regulatory barriers are all significant positives.
However, the proof will be in implementation. Will the funding reach the communities that need it most, or favour those already equipped with expertise and resources? Will the business models and policy reforms arrive quickly enough to capture the current momentum? And will GB Energy truly deliver on its promise to co-design solutions with the sector?
For the first time in in its history, community energy has a fighting chance to become mainstream rather than fringe. But we can’t be passive recipients of government largesse, we need to actively engage with the Expression of Interest process, provide feedback on policy design, and hold GB Energy and DESNZ accountable to their commitments.
The Local Power Plan is the best opportunity the community energy sector has ever had to explode its impact and make itself as a major player in UK energy independence.
Its time to get to work…
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