Barriers to address for Community Energy

26/06/2020

This blog was written by Liam Stoker, Editor in Cheif at Solar Media for Community Energy Fortnight 2020.

If solar is a leader of distributed energy generation, then community solar is arguably its purest form. What better use of a clean energy generation technology than to truly hand power back to the people, all the while benefitting local communities.

Throughout this lock down period in which solar and other renewables have had to face significant uncertainty, we’ve heard stories of hundreds of thousands of pounds of community solar benefits being returned to the communities that house and have supported such projects, helping fund programmes and initiatives that are increasingly vital to the health of local communities.

It’s for that very simply reason that the continued growth of community energy must be imperative for the energy sector’s many disparate stakeholders. From installers to consumers, every one involved in the process of installing community energy – and indeed storage – benefits from every kilowatt deployed.

And yet, for a multitude of reasons, deployment has been stymied. The government’s overwhelmingly baffling decision to remove community energy’s eligible for Social Investment Tax Relief schemes such as EIS in November 2015 was a hefty blow, as was the collapse and eventual withdrawal of the feed-in tariff. The community energy sector mirrored the wider solar landscape and business models had to be rebuilt from the ground up.

The UK’s renewables sector is, thankfully, a much more mature and savvier beast than it was in 2015. The proliferation of renewables has changed the face of the energy sector for the better, leading to a change in thinking. Embracing the concept of whole systems thinking has been pivotal and now, renewables projects across the country are realising the inherent value in not just their generation, but their flexibility too.

The national grid’s need to balance the energy mix has led to an array of flexibility markets having been established, with the balancing mechanism now widely adopted by battery storage and other technologies as an additional source of revenue. And these needs are not only national, but local too. Distribution network operators are quickly embracing their need to evolve and manage entire systems rather than just pipes and cables, leading to more localised flexibility markets popping up.

And, increasingly, these parties are keen to encourage community energy’s engagement.

Last year Solar Media’s Current± news publication organised a roundtable with participation from the country’s networks operators, energy technology companies, flexibility providers and the community energy sector in a bid to identify what barriers remain to the wider involvement of community energy in network flexibility requirements. Barriers surrounding financing, the complicated nature of entering such flexibility markets and a raft of energy policies and restrictions were identified, with those present keen to help community energy companies and projects address and overcome those hurdles.

In particular, those present at the roundtable highlighted the need for a fairer playing field, although not necessarily a level one. This would need to strike the balance between projects that have cheaper access to financing and those that need to deliver community benefits, and any movement in this sense would certainly help pave the way for community-owned projects to participate in flexibility markets. There was also discussion around the need for a more significant and broader spectrum of support offered – be it financial, legal or technical advice – to help community-owned projects entering what can be hugely complicated market processes.

If these barriers can indeed be addressed, then the potential for community-owned projects to flourish is enormous.

Good Energy’s ‘Selectricity’ pilot from a few years ago gave the industry a glimpse at a future where consumers could essentially pick and choose where their power came from. If a number of households wanted to, they could procure their daytime power from a local solar farm they collectively supported while deriving their power from elsewhere at other times. All that’s stopping this kind of holistic approach to energy supply and demand is tweaks to a few Ofgem codes and the desire to adopt such a system en masse.

That kind of model, combined with a similar approach to flexibility, where local, community-backed assets help balance local grids, is undoubtedly the direction of travel. And it’s not as far fetched or futuristic as it may seem. The technology required for these localised energy trading networks to prosper is not only here today, but proven.

For decades, energy generation worked on a very basic principle of supply and demand. Consumers demanded power, and power stations supplied it. Renewables, storage and flexibility have tipped that model on its head, and even the most ardent of sceptics might now admit that the concept of baseload power – at least as it has been traditionally accepted – is now outdated. Local customers can soon expect to be able to be powered from local, often community-owned, clean energy sources that also help tackle local grid issues.

Community energy can, and I’m sure will, play a pivotal role in that change, truly handing the power back to communities.