Andy Burnham talks about the need to put power “in the hands of the people and places who can use it best and in so doing, creating a sense of agency, possibility and hope flowing around the country.” He means, of course, political and decision-making power. But his words apply equally well when we think about the generation of electrical power.
For the past 20 years, communities across the UK have demonstrated that they have the willingness, skills and capacity to develop wholly community owned energy generation projects – from Bath and West Community Energy’s 6 solar farms totalling more than 14MWp in the Southwest, to Point and Sandwick Trust’s three 3MW wind turbines and 25MW community battery on the Isle of Lewis in Scotland. Last year’s State of the Sector report identified 614 community energy organisations operational across the UK.
Their motivations differ. For some, it is an environmental imperative. For others it is about energy security and resilience. For most, the needs of their communities drive them. Community owned renewable electricity projects create a secure income stream for decades that studies have shown to be between 34 and 52 times higher than the £5000/MW/year that the Scottish Government regards as good practice for community benefits payments. That income creates local jobs and is invested in local priorities, such as affordable housing, reopening community hubs, provision of active travel infrastructure, and distribution of hardship grants. Last year alone community energy organisations contributed more than £24 million to local economies.
But to date, the communities that have taken forward these projects have done so despite the policy framework, overcoming multiple barriers to achieve their goals. There are signs of change – the establishment of Great British Energy (GBE) and the joint government/GBE Local Power Plan being published are an indication of the current government’s desire to support more projects like this to happen. But there is still a need for this support to turn into real, practical action and changes to the status quo – for example, in the way that we prioritise which renewables projects get grid connections, or which projects get long term financial guarantees that help to build business models through mechanisms like Contracts for Difference and curtailment payments (which smaller community projects don’t have access to). Because of these barriers, there is currently almost as much stalled project capacity as there are operational projects within the community energy sector. Without transformational action and soon, the government will miss its own target of 8GW of community- and locally-owned energy by 2030.
Burnham notes that our economy is not built with ‘ordinary people’ in mind but instead hands more to the people who already have the most. Our power system is similar. A recent report showed that of the estimated £5.6bn profit made by the onshore wind sector in Scotland over five years, only £147m went to local communities – whereas around 90% or £4.1bn was paid out as dividends to corporate shareholders, of which around £729m went to companies owned by private equity or based in tax havens. The majority of profits don’t just leave our local communities – they leave the country altogether; 82.2 % of UK offshore wind is owned by foreign entities.
The Local Power Plan has a vision that ‘by 2030, every community in the UK will have the opportunity to own a local energy project.’ The impact that would have on local areas and people is profound. It is also very much in alignment with Burnham’s own vision – for good homes, good employment, and “good growth in every postcode.” Hundreds of communities can already demonstrate how they have achieved this despite the system. Now is the time to work together with courage and vision to transform that system so that it supports every other community to see the same results, by literally putting power in the hands of the people.
