More and more pilot projects and initiatives are taking place across Europe to encourage community energy.
Increasingly, community energy is being viewed as a key component of reaching low carbon economy targets, encouraging consumers to become prosumers and engage more readily with energy generation.
This increased focus on the topic, especially in the UK comes, amidst recent news that Mayor of London Sadiq Khan has launched the second phase of funding for the London Community Energy Fund (LCEF).
As a part of Khan’s Solar Action Plan, the mayor endeavours to make community energy a fundamental part of getting London on track to achieving 2GW of installed solar capacity by 2050.
The first round of funding, largely for the deployment of new solar photovoltaic technology, for the LCEF awarded £150,000 for these aims, and the second seeks to broaden funding horizons beyond solar to support projects that both produce clean local energy and reduce energy demand. This could grow to include, for instance, battery storage.
Through insights into the UK community energy market, it is evident that significant potential can be find, but also many challenges ahead.
Community energy gathering momentum in Scotland
For instance, the organisation Local Energy Scotland, set up in 2013, is a consortium made up of the Energy Saving Trust, Changeworks, the Energy Agency, SCARF and the Wise Group,
Local Energy Scotland supports the Scottish Government's Community and Renewable Energy Scheme, which is a programme to encourage local and community ownership of renewable energy across Scotland, to aid in reaching the government’s goals of producing 1GW of community and locally owned renewable energy capacity by 2020, and 2GW by 2030.
The organisation helps communities and rural businesses by offering free advice and support to develop renewable energy schemes or to secure and manage income from renewables, as well as advice on funding streams.
Crucially, Local Energy Scotland also provides access to the Community and Renewable Energy Scheme (CARES), which was established by the Scottish Government to encourage local and community ownership of renewable energy across Scotland and to help maximise the benefits to communities of renewable energy systems - whether commercial or community-owned.
As of June 2017, an estimated minimum of 666MW2 of community and locally owned renewable energy was operational as a result. In the same time period, there were around 17,950 individual renewable energy installations in Scotland, according to the British organisation Energy Saving Trust.
Leveraging community power for grid benefits
However, this burgeoning sector is not without its challenges. A recent report from non-profit organisations Community Energy England and Community Energy Wales alongside research and consultancy organisation Scene Connect and energy industry partners showed that community energy in the UK experienced a decline in 2017.
According to the report, these declining figures are likely due to a reduction of subsidy schemes and tax incentives for onshore renewables. This, coupled with the financial barriers that resulted from increased financial risk and lesser returns on investment, has visibly deterred the growth of the community energy sector in the UK.
Other barriers noted in the report included complex and unclear planning processes, and communities facing difficulties in gaining access to suitable project sites to develop renewable energy installations.
However, with the assistance of utilities as project partners, community energy projects could soar, all the while providing the utility with much-needed new services and revenue streams.
One utility with this mindset is, Northern Powergrid, an electricity distribution utility in Northern England, which is involved in a study on distributed storage and solar power near Barnsley, in Northern England. The project’s aim is to understand how customers’ energy bills can be reduced by capturing energy from solar panels and delaying its use with domestic batteries.
Jim Cardwell, Head of Trading and Innovation at Northern Powergrid, says: "Northern Powergrid champions support for community and local energy stakeholders where we continue to see interest and development of projects involving renewable generation and energy efficiency.
"Our role is to use our knowledge to leverage the hard work from communities across our region to provide a helping hand through engagement, education, communication, funding and offering accessible services.".
With the assistance of financing, regulation, and indeed the expertise of utilities, local generation and consumption will become a valuable asset on the road to decarbonisation.