Community energy is one of the most transformative opportunities of the energy transition. It involves renewable energy and also a change of ownership. It democratises energy at the same time as decarbonising it. It breaks the power of the big fossil fuel companies, and creates an inclusive energy market where everyone can have a stake in the the energy that they depend on.
Perhaps it isn’t surprising that some people hate it so much, and Britain’s blossoming community energy sector was very deliberately strangled in 2015. I won’t go over the sorry details again, but different politicians are in charge and different energy policies prevail. Commmunity energy is still alive. With a little support, it can resume its momentum and make the difference we hope for.
One specific thing that holds back community energy is a regulatory environment that has been shaped around the needs of large energy companies. Specifically, there’s no mechanism for trading energy locally. All energy is sold onto an open market and bought back from the grid. But that means that a small energy project has to register as a supplier in the same way as a very large energy project. This looks like a level playing field, but the disproportionate costs to smaller businesses stack the system in favour of big companies.
The economy already manages to distinguish between large and small enterprises in other areas – such as eligibility for corporation tax or VAT, for example. If differences of scale are accomodated in tax and legislation elsewhere, there is no reason why the energy market cannot do the same. Germany has proven this, and has a thousand registered energy suppliers to Britain’s 50. This has given it a much more diversified and inclusive energy market that is less dominated by large companies and their interests.
The Power for the People campaign is targeting this problem, and is calling for a Local Electricity Bill that would create entry points for local energy production. Under the guidance of OFGEM, new mechanisms would be created for smaller scale producers with limited resources and ambitions. It would lower the barriers to entry for smaller energy projects of all kinds, including community energy.
You can find out more about the campaign and how you can support it here. It’s a very practical and common sense step, and with many MPs supporting it already, I’m hopeful that this will move forwards in the coming months.