Delivering clean power by 2030 will require bringing people with us on the journey – and local and community energy is one powerful way to go about it. Here, Fraser Stewart summarises our work on the topic for Innovate UK’s Net Zero Living programme, working alongside 52 local authorities.
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.
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’.
Small is difficult – for now
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.
Small is worth it – and happening
Given these fundamental challenges, it would be easy to dismiss local as too difficult. If your main consideration as a policymaker is getting as much renewable energy online at as low a cost as possible, then it makes sense to continue to pursue big-ticket projects that can deliver economies of scale.
Yet this blunt cost analysis misses the immense, distinct and additional value that ‘local’ has to offer. The sense of ownership and empowerment, the wider social and economic benefits, the strong public engagement that local can deliver. In reality, without this we could feasibly see increasing barriers to achieving the big-ticket projects as people become increasingly resistant to projects that provide no benefits to them and their communities.
Of course, we need the ‘big stuff’ to get us to Clean Power 2030. This will be the backbone of any successful transition – the broad shoulders on which a thriving future energy system will stand. However, given the value on offer and support for local energy among the wider public, there is a clear role for going more local in the process.
Unlocking local power
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:
- Clean Power 2030 and connections reform: Through recognising local and community approaches to energy as ‘needed’ for CP2030 and adjusting the connections methodology, NESO and government can enable more local initiatives to proceed.
- GB Energy and the Local Power Plan: The Local Power Plan tentatively committed £1bn to enable local and community approaches, including capacity, low-cost finance and innovation support for local projects.
- Review of Electricity Market Arrangements and wider market reform: Energy market reforms present an opportunity to support new local generation, flexibility and supply models and to unlock innovation by developing a new geographical layer to the retail sector.
- Regional Energy Strategic Planning: Regional coordination and engagement provides new opportunities for local and regional actors to work together to identify and deliver more locally minded net zero solutions.
Each of these provides an opportunity to support local and community energy better, unlocking the substantial value it has to offer.
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.
For more information about Net Zero Living see: Innovate UK’s Net Zero Living programme – Innovate UK Business Connect