Regen SW’s Local Authority Sustainable Energy Forum on 25 September 2014 brought together local authorities and community groups to discuss the key ingredients for how they can work together to mutual benefit.  This write-up by Hazel Williams from Regen summarises the key learning.  Many thanks to the speakers for sharing their insights:  Alistair Macpherson, Plymouth Community Energy; Jake Burnyeat, Communities for Renewables CIC; Jodie Giles, Regen SW; Dan Nicholls, Cornwall Council; and Olly Frankland, TRESOC. 

Community energy is flourishing across the UK 

With the launch of the government’s national Community Energy Strategy this year and pledges of cross-party support, community energy seems to be the one area of renewables that is immune to political attack. There are now several thousand community groups across the UK and we have more than 200 groups registered on Regen’s community energy network in the south west.   There is no single definition of what a community energy project entails and projects range from single small-scale solar installations on community buildings to aggregated cross-city share offers or large wind turbine installations, from partnering with ECO providers on energy efficiency schemes to buying clubs for private energy efficiency and renewable installations, from setting up community energy advice schemes to smart meter trials. 

Local authorities have the skills, influence, credibility and access to funding to help make community energy happen

Despite the surge in interest, to date only a limited number of community energy groups have successfully installed renewable energy projects or made significant inroads on tackling energy efficiency.  Many groups feel they would really benefit from the support of their local authorities to help them achieve their objectives and overcome barriers, such as access to funding and expertise. 

Local authorities are required by national policy to support community energy, and this can take many different forms. Whether or not a local authority’s objectives are to achieve a return on investment or empower their community, the clear message from the South West Local Authority forum was that there is plenty of scope to do both.  

  • Support from a local authority might include partnership approaches, such as investing in community energy through development grants, loans and under-writing share offers, as well as hosting schemes on the council’s estate. Many local authorities are currently considering installing renewables on their own estate to generate income for themselves and cut energy bills and carbon.  By working together with their local community, they can not only achieve these aims, but also have wider social, economic and political impacts by empowering local people to achieve their own ambitions. 
  • Local authorities can be supportive of community energy through the planning process. The Community Energy Strategy gives local authorities licence to write planning policy that is supportive of community energy.  As yet, there has been a great deal of uncertainty about how to write policy to this effect and it is being left to councils to interpret and test this opportunity themselves.  Cornwall Council will consult shortly on its proposed approach to supporting community energy through planning.  Cornwall Council has also produced a guide note on how neighbourhood planning can be used to facilitate community energy. Some councils, such as Dorset County Council, have also been successful in supporting local communities to negotiate community benefits from commercial schemes in their area. Local authorities can also choose to offer reduced planning fees to community energy schemes, for example, offering free pre-application advice.   
  • Local authorities can also offer support to community energy simply by offering groups a voice at council events and in national consultations. Regen and our local authority members have all been actively championing local groups on local, regional and national platforms. 

Lessons from Plymouth Energy Community (PEC) and others on how a local authority can support community energy

Plymouth Energy Community’s (www.plymouthenergycommunity.com) experience offers an excellent example of how a local authority can support community energy, whilst also achieving benefits for itself and the wider community.  The members’ co-operative was set up on the back of a manifesto pledge by Labour Councillors at Plymouth City Council, with staff drawn from the Council, a Council development grant and a loan to support the solar share offer.  The co-op tackles four strands of work: encouraging people to save by switching suppliers; debt advice for those who are in arrears on their bills; working with British Gas to deliver ECO in the area; and undertaking a share offer to install solar PV on schools, community buildings and other appropriate sites. 

There are a number of learning points that can be drawn from Plymouth’s experience and from the experience other authorities and community groups shared at the forum:

  1. Supporting community energy is a cost-effective means to achieving council and community aims

There are a number of potential financial benefits for a local authority of supporting community energy:

  • Where schemes are hosted on an authority owned site or asset, lease income and bill savings may be generated.
  • Authorities offering loans to community energy groups may be able to charge interest on the loan (subject to certain criteria)
  • Authorities can invest as shareholders in schemes alongside community groups, generating a return on investment for the authority
  • Other revenue streams could be created, for example, through ECO partnerships

Some authorities are viewing their role as a choice between installing projects on their own estate to maximise their income, or handing over their assets for use by a community group with little or no financial gain for the council.  There can be room for a dual approach.  Plymouth City Council is using some of its own estate for solar projects funded entirely by and for the Council, whilst also working through PEC to develop other sites.  

The benefits of supporting a successful community energy scheme are far wider than just the financial income potential.  Monitoring impact is particularly important, as schemes can address fuel poverty, supporting those most in need.  They can also reduce carbon emissions from both the council estate and the area in general.  By working with local suppliers, local jobs can be supported or created.  The community group itself may also support a number of paid roles – in the case of PEC a shared services arrangement has been agreed with the council that means salaries of core staff are in part supported by income from PEC.  PEC have also secured other externally funded posts that Plymouth City Council is hosting. This has allowed the development of a single community energy focused staff team, generating ‘critical mass’ to get stuff done, and avoiding  splitting that expertise across an artificial public sector / community sector divide.  

Time invested by Plymouth City Council in supporting the development of PEC has been rewarded by the inward investment this community group has generated for the city.   Their first solar share offer raised £600k for investment in community buildings in 6 weeks.   This is money that would not have entered Plymouth without the existence of PEC, and now PEC exists the council has a community partner with the capability and appetite to do this again and again.  

Wider social benefits may also be created, such as community cohesion as people engage with their community and take control of their energy.  For PEC, the solar schemes have been installed on local schools, offering these schools lower electricity bills.  As a result, the schools have additional budget available for educational purposes, as well as using their panels as a resource to educate children about energy. 

  1. Councils can offer vital access to funds to unlock the development stage of community projects

Community energy projects can be self-financing in the long term due to the returns created, but tend to need short-term funding to cover set up costs. Whilst there are some national sources of development funding available such as the Rural Communities Fund and soon to be launched Urban Communities Fund, council funding can also play a valuable and timely role.  

In Plymouth, the Council provided a combination of seed funding, council staff and resources and a £500,000 loan.  This included a marketing budget and access to professional support, such as time from Communities for Renewables CIC to launch the share offer.  

  1. Speed and cost savings can be achieved by setting up an external entity that uses some elements of the local authority, but avoids others

PEC drew its staff from the Council, enabling it to set up quickly without the need for costly recruitment processes or setting up human resource or other support structures.  There were just three months between initiating business planning for the share offer and its launch. 

As PEC is a separate entity to the Council, it was able to establish its own procurement processes, avoiding the lengthy processes that authorities have to comply with.  Not only was this speedier, but installers were able to offer significantly reduced prices to the community group than when the council procured for its own projects. 

  1. Bringing together a community energy group and local authority brand helps to create credibility for energy projects

Local authorities working alone on energy projects can sometimes struggle with gaining the public’s trust.  Meanwhile, community energy groups are often perceived as well intentioned, but without the organisational clout to make things happen.  PEC have found that a community group with Council backing is able to make the best of both worlds and be viewed as a credible organisation with the ability to make a real difference. 

 

  1. With political support, committed officers and local champions, there are few barriers to success

PEC was fortunate in that it has been driven by support from local councillors and there are committed officers from the Council now working for PEC.  This support has opened the door to financial and professional support from the Council and helped PEC to access relevant knowledge from within the Council and beyond. 

Political backing has a vital role to play. Community groups or officers struggling to engage their politicians could use the example of what PEC and others have achieved to demonstrate the wide ranging potential benefits for their council of supporting community energy.  Where possible, they should try to identify and work with local champions within their council or with influence on the council. 

  1. Building local energy markets can be a key driver

Investing in community energy can be perceived as including only the wealthy and attracting external investors with little benefit for local people.  Whilst wealthy investors are important in providing large investments to schemes, the support of local people is vital and helps to reinforce the principle that keeping energy spend within the local economy is beneficial.  Share offers cannot be limited to a geographical area, but steps can be taken to maximise local ownership and control.  PEC facilitated local ownership of their share offer by reducing the minimum share price to £50 and by marketing the opportunity heavily through local routes.   By doing this over 50 per cent of investors came from within the City boundary.

  1. Don’t wait for someone else to do it for you

The national Community Energy Strategy gives local authorities a remit to support community energy.  Plymouth City Council have set an excellent example for how real results can be achieved swiftly through PEC.  Other councils considering supporting community energy should take note of the benefits that can be achieved in a short amount of time, where there is sufficient drive and commitment.   Local authorities should seize the opportunity that their unique role offers to make something happen in their area. 

Supported by: 

Regen SW has extensive experience on community energy.  We recently wrote national guidance for DECC on best practice for onshore wind in community engagement and community benefit and are working with the Ministerial Taskforce on effective Shared Ownership options. Regen SW are joint founders with Green Trust CIC of Communities for Renewables CIC (www.cfrcic.co.uk ), a social enterprise that helps proactive communities harness the value of their renewable energy resources, and retain that value within the local economy. 

Regen SW can support your local authority to take action on community energy:

  • Join our national Community Energy Accelerator, launched in September 2014, offering in-depth technical support and help with wider creative engagement activities for communities across the UK.  Devon County Council are already enabling deeper support for their communities through our accelerator, providing selected Devon communities the chance to access up to £5,000 each in direct funding. 
  • We can offer advice on positive planning policy, effective community engagement and maximising community benefits.

Please contact Hazel Williams, director at Regen, for further information on 01392 494 399 or hwilliams@regensw.co.uk