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Cleaner, cheaper, closer to home – is community energy the local solution to global energy shocks?
A blog by Thrive Renewables
UK consumers have faced at least eight major gas price spikes over the past ten years, both weather-driven and geopolitical, like the current conflict in the Middle East. It was only four years ago that the UK spent £50 billion supporting bill payers in the energy crisis following Russia’s invasion of Ukraine. Now households could be facing energy bills as high as £2,500 a year if the Iran conflict causes prolonged disruption to global gas supplies.
Historically we’ve been caught up in a cycle of investing in more fossil fuels as a knee jerk reaction to problems caused by disruption to fossil fuel supplies. This creates an unhelpful loop of dependence in which UK billpayers are left exposed to price hikes determined by unpredictable international oil and gas markets.
Fortunately, there is an alternative, proven solution that doubles down on British production: deploying homegrown clean power. Onshore wind and solar are the cheapest forms of electricity generation today and, unlike gas, they are not at the mercy of international markets. According to Carbon Brief, Renewables saved the UK £1.7bn in the first two and a half months of the Iran crisis.
More than megawatts
Achieving a cleaner, more resilient energy system here in the UK requires more than just wires and turbines. Communities need to be placed at the heart of the plan.
Empowering communities to own (or part-own) clean energy developments in their local area affords both them and the UK greater control in the face of global crises, helping to protect us all from price hikes. Ensuring the communities that host projects directly benefit from them means developers can also build support for new projects and thus, accelerate the transition to clean energy.
By pledging up to £1 billion to locally owned projects, the government’s Local Power Plan sends a clear signal about the importance of community energy in the clean energy transition.
But to unlock the full power of community energy, as well as public backing, we also need funding models that can match the ambitions of local people.
Flexible funding
Local clean energy projects often require more flexible funding than traditional financing routes can provide. Where communities are ready and willing to lead from the front, we should encourage 100 per cent community ownership via funding designed for that specific project. If a shared ownership structure is more fitting for a specific community, we should support that development by tailoring the financing to it.
Thrive’s Community Energy Catalyst, a joint venture with Better Society Capital, enables communities to build their own clean energy projects or take a stake in a larger project in their area – offering flexible funding to suit the specific needs of the project at hand. Thrive is also committed to offering the local community a share of every new project we acquire.
Empowering communities to take control of their energy at the source ensures profits from the sale of electricity go into the pockets of local people, not large corporates. Take the Ambition Community Energy wind turbine in Bristol which Thrive funded the construction of – as well as generating enough clean electricity to power around 3,000 homes, all profits from electricity sales (around £100,000 a year) go to the community.
Kilbirnie community owned turbine in Scotland is another great example, with income from the project helping to support employment and sustainable transport opportunities for local people.
Taken together, these projects embody a brighter future for the UK: greater protection against volatile global gas markets, cheaper energy, stronger local economies, and communities with a meaningful stake in Britain’s transition to clean energy.