Local energy provides enormous value to people, places and the national net zero mission. Yet key challenges remain to enabling this at scale. The latest paper from the Net Zero Living programme, Power of Places, sets out this value of local in detail, building on extensive systematic literature review and engagement with key stakeholders. It sets out a vision for a thriving local energy future, complete with recommendations for unlocking this going forward.
The rapid acceleration of the government's Clean Power 2030 ambitions, the establishment of Great British Energy and ongoing market reform debates have raised questions about the role of 'local' in the UK's energy system.
Local energy provides immense value to people, places and the UK's national net zero mission. This includes, but is not limited to:
Critically, local energy creates strong public buy-in for local infrastructure and the wider national net zero mission enabling us to go further faster.
UK energy policy, markets and regulation today generally do not recognise the benefits of smaller and local energy. Broadly speaking, our system is designed to incentivise big generation and national supply – it is built for projects and services which can achieve economies of scale, not wider benefits. As a result, smaller local projects face challenges navigating and competing in markets and technical processes (e.g. grid connections) that have historically been designed for bigger players.
There are also limited incentives for national suppliers to recognise or support local initiatives in their activities, or to reflect the distinct needs and geographies of local places. Other well-cited issues likewise persist, such as regulatory barriers to local supply, a lack of a strong price mechanism since the closing of the feed-in tariff, and limited funding for local and community organisations.
Yet we argue that the value on offer is too good to pass up, and various changes are under way that can enable this on a wider scale. The formation of Great British Energy and the Local Power Plan, the Review of Electricity Market Arrangements (REMA) and retail market reform, Clean Power 2030 and updates to the connections process all present opportunities to unlock a thriving local energy landscape.
To help deliver this, our latest paper, Power of Places, draws on insights from systematic literature reviews and engagement with 15 local authority and community energy stakeholders involved in the Net Zero Living programme to spotlight the broad and significant opportunity of local energy. Based on extensive evidence, it sets out the value that local energy has delivered to people, communities and the energy system so far. It then sets a vision for an energy future which unlocks the diverse benefits that local has to offer.
Our vision is built on five key pillars for a thriving local energy future, all of which are underpinned by core just transition principles:
The good news is that none of the challenges identified with ‘local’ energy are insurmountable: quite the contrary. The government has made strong signals of intent to support more local approaches to energy and in this paper, we are suggesting clear areas to unlock this:
Each of these provides an opportunity to support local and community energy better, unlocking the substantial value it has to offer.
Through extensive literature review and engagement with key stakeholders, this research shows clearly that local energy – whether a community-owned solar farm, a local authority providing low-cost power to its residents or an integrated smart local energy scheme – carries significant, distinct value to people and places.
With more local approaches, communities can reinvest profits from locally owned renewables into fuel poverty alleviation and local decarbonisation. Local supply and market models can reflect the different circumstances of different areas, in many cases helping to reduce bills and encourage more active participation in things like flexibility and demand-side response. More small-scale, local projects make our energy system more diverse and resilient overall.
For local authorities in the Net Zero Living programme, local energy is a lightning rod for increasing public support for net zero, increasing acceptance of renewables, improving engagement and creating a sense of ownership over the national ‘clean power mission’. This can allow the transition to go further, faster.
Acknowledging this, UK government has been positive in its messaging around local and community-owned energy. The GB Energy founding statement outlines a commitment to unlocking 8 GW of local and community power projects, expected to be backed by significant resource in the upcoming Local Power Plan. However, realising the value of local energy at scale doesn’t just mean funding new generation projects, important as that is. It means better enabling ‘local’ across the energy system, which has been built for ‘big stuff’.
This work was funded as part of the Innovate UK Net Zero Living programme. All perspectives and proposals are those of Regen and programme participants and are not endorsed by Innovate UK. Regen has been working with local authorities and community organisations involved in Innovate UK’s Net Zero Living programme to understand the value of local and community energy, and present a vision for a thriving local energy landscape in the latest thought leadership paper, the Power of Places. For more information about Net Zero Living see: Innovate UK’s Net Zero Living programme – Innovate UK Business Connect.
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