For those of us involved in the Community Energy Sector, the last few months have been a very rough ride. It seems that every month that goes by there is another body blow to those that are desperately trying to make Community Owned energy a reality in Wales.
But why should we care, what difference does it make to those of us who are just getting about our busy lives. Certainly when I try and explain the intricacies of how the Conservative Government are slowly dismantling the viability for Community Energy schemes, people’s eyes glaze over and respond with ‘that’s a shame’ or ‘typical Tories’. Maybe it is our fault, maybe we haven’t made people aware of why Community Energy is so good, how it can massively benefit society, how it can shake up the energy industry in the UK and has revolutionised the energy industry in countries like Germany and Denmark.
Let’s start by looking at Wales. It has been a long and painful journey for Community Energy in Wales overcoming planning issues, licensing, grid capacity and a wealth of other obstacles, but despite this a hardy bunch of social entrepreneurs have set about dedicating their lives to developing community energy schemes across Wales. Despite this things were really starting to happen and a number of schemes are being built right now. There are over 70 groups in Wales working on this and they are all predominantly being developed by volunteers.
Collectively if they all went ahead they could generate enough energy for around 20,000 homes in Wales but more importantly they were aiming to generate over £30 million in profit that would be used to re-invest in their local communities over the next 20 years. At a time when we are seeing cuts to our public services and rises in our living costs this could make a significant contribution. This is comparable to the Community Benefit fund that is provided by the Pen Y Cymoedd wind farm in Rhondda Cynon Taf but this scheme is around 10 times larger. These figures do not include the benefits of creating local jobs, the construction jobs and the fact that most of these schemes are funded at least in part by using Community Share offers enabling local people to have a direct stake in the scheme and become a member of an energy co-operative. This means that the interest payments paid out to members are predominantly kept within the local economy and Wales.
What does that mean at a community level? We can look at some examples of schemes that have been built. Ynni Anafon Energy have nearly completed the largest community owned hydro power scheme south of Scotland. They will generate enough energy for 270 homes and all the profit that they generate will go to Abergwyngregyn Regeneration company to be used to support energy efficiency schemes in the local area, develop local community owned assets such as buildings, provide training opportunities for local people and to support other community led projects in the area. They fortunately managed to start building their scheme prior to the impacts from the latest government changes. Tragically not all schemes were able to get through in time and they are facing a much bleaker future. A few valleys across Ogwen Hydro have not been so fortunate they were hoping to develop a hydro scheme to generate enough power for 100 homes and to use the profit from the scheme to help tackle fuel poverty in the area they live. Unfortunately this scheme is now in the balance due to the changes put in place by the UK government.
The most tragic element of this is that the people that have been involved in these schemes have dedicated their lives to developing these projects. They have done this because they have seen an opportunity to start taking back control over the future of their communities. They are able to generate income, create new enterprises, jobs, tackle issues such as fuel poverty, climate change and have brought groups of people together who want to improve their communities. This has been encouraged by both the Welsh and UK Government through various initiatives and strategies. The most important of these strategies was the recently produced Community Energy Strategy. In it the Department of Energy and Climate Change (DECC) highlight the significant investment that has been made in Community Energy; £25 million in the Rural and Urban Community Energy Funds and a £500,000 peer to peer support programme in England. In Wales over £2.4 million has been spent on the Ynni’r Fro scheme, and an additional £200,000 of loan finance has recently been invested in scheme development through a Big Lottery funded Community Energy Fund. Community Energy Wales is also currently in receipt of funding from the Welsh Government to establish itself. This has encouraged local volunteers to invest huge amounts of their time and energy into developing these projects over very lengthy periods of time. A recent survey by Community Energy Wales highlighted that volunteers have been working on these projects for an average of 5 years, some as many as 15 years. On average each group is putting in around 350 volunteer days to take these projects forward.
Has Wales missed out on a golden opportunity to support the creation of 10’s of thriving social enterprises across Wales that will be generating income to support local communities right across Wales? In short yes because of planning, licensing, lack of enterprise in the public sector and grid connections issues Wales was unable to take advantage of the good times over the last 5 years. We now have a conservative government that is systematically stripping away all the support for community energy schemes right across the UK with the removal of FIT pre-accreditation, reduction in FITs and most recently the removal of tax relief for social investment in Community Energy projects.
However, there is a silver lining. The Community Energy sector in Wales is made up of the hardiest, enterprising folk you could find. They are already working together to find ways to overcome these challenges and identify alternative business models to ensure that these schemes can go ahead. In some ways the models that are being developed if successful would be even more beneficial to the local communities they serve. Currently community energy schemes can’t sell their energy directly to the communities they serve due to OFGEM regulations. However, there are trials being run across the UK looking at innovative ways for community energy generators to be able to sell their energy to local people. In simple terms we hope that by cutting out some of the middle men consumers will be able to get cheaper local electricity and generators will be paid more for the energy they produce. Community Energy Wales and various community energy groups are already looking into these opportunities. Alan Simpson a former MP and Community Energy advocate explains in this short film some of the opportunities that could revolutionise the energy sector in the UK and Wales.
This isn’t going to happen unless we as consumers demand this change. The UK Government isn’t going to change its stance until there is pressure on it from the public. I have tried to share what Community Energy could mean for Wales, but we are in the infancy in Wales and the UK, this is the tip of the iceberg and there is so much potential for more. We only need to look at Germany and Denmark to see what is possible and what our futures could hold. If you care about this but don’t know what to do then you can keep up to date with changes through Community Energy Wales and the Keep Fits campaign.
There is as alternative vision for the future of our energy, one that involves local ownership, where the benefits are retained in local communities and that provide cheaper, greener and cleaner energy for everyone in Wales and the UK. This is happening in Germany and Denmark and to a lesser extent closer to home in Scotland and it could be happening here.
This page is also available in: Welsh