Last edited 28 Mar 2019

Community energy network

Community energy networks have become a popular means by which local communities can take collective action to:

Reduce energy consumption by taking collective action to improve buildings.
Use collective purchase purchasing or switching power to get a better deal.
Use collective demand management.
Undertake community generation.

If energy can be generated and saved at a local-level then it might provide sustainable alternative to the ‘Big Six’ energy firms that dominate the UK market. Since 2008, there have been at least 5,000 community energy groups in the UK that have developed initiatives and projects to develop independent energy. However, this still only accounts for 0.3% of the UK’s energy grid, compared with 46% in Germany, demonstrating the potential for such projects.

The emphasis of community-led networks is the engagement of local people, local businesses and business leaders and local authorities. Local authorities may be able to provide support and advice if a community is considering applying for planning permission for the purposes of an electricity generation project. Local businesses may be prepared to get involved with trying to reduce the area’s energy bills and carbon footprint.

The Roupell Park Estate in Brixton, South London is an example of a community energy network project which installed 52 kWp of rooftop solar panels in 2012. The panels were financed by the estate’s tenants, each of whom invested £50, raising a total of £60,000, allowing them to part-own the panels. The revenue generated is invested back into the community.

Other examples of community energy projects include:

Community-owned renewable electricity installations such as solar photovoltaic (PV) panels, wind turbines, or hydroelectric generation.
Communities working together to collectively switch electricity or gas suppliers.
Off gas-grid communities collectively purchasing heating oil.
Communities switching to a renewable source such as a heat pump or biomass boiler.
The installation of cavity or solid wall insulation supported by community groups.
The installation of smart technology working in partnership with local Distribution Network Operators (DNO).

The UK government recently published its first Community Energy Strategy and the Community Energy Strategy Update (March 2015).

Initiatives such as the Feed-in Tariffs (FITs) scheme and Renewable Heat Incentives (RHI) scheme can be used by community energy networks and The Heat Networks Delivery Unit will support local authority-led heat network projects in England and Wales. Additional guidance is available on the gov.uk website.

It is important that a proper business plan is prepared and that a suitable legal structure is created for the community group, in particular if grant funding is being sought. The government suggest that Community Benefit Societies, Co-operative Societies and Community Interest Companies (CICs), charities, or joint ventures with private companies may be appropriate legal structures.

It is also recommended that an experienced professional is consulted on suitable technologies, structures and funding, and it may be advantageous to appoint a professional to act on behalf of the community group.