Supporting communities to power a sustainable low-carbon future

03/06/2020

This blog was written for Community Energy Fortnight 2020, by Colin Baines and Sarah Holliday 

 The climate emergency is no longer an issue solely for the concern of environmental or sustainability focussed Trusts and Foundations, it’s a matter of urgency for every part of society and for all funding organisations. The Covid 19 crisis has only emphasised this – a recent study compared the climate crisis to Covid 19, describing them as similar but the former in ‘slow motion and much graver.’

 Therefore, in looking forward beyond the Covid 19 crisis, it’s quite right that the climate emergency is demanding our attention and challenging us to think of ways to ensure our work is doing all it can to contribute to the task of reaching net-zero carbon as fast as possible. It’s also a time to reflect and learn from those Trusts and Foundations who have been supporting pioneering work to help communities play their part in creating a low-carbon future.

 One such organisation, Friends Provident Foundation (FPF), has been a long-standing supporter of the community energy sector. FPF is an independent charity that makes grants and uses its endowment towards a fair, resilient and sustainable economic system that serves society. They connect, fund, invest and share learning to shape an economy that works for everyone.

 Investment Engagement Manager, FPF, Colin Baines explains: “Community energy is at the centre of the Venn diagram of environmental, social and economic charitable causes and has the potential to bring about real systemic change.”

 “Community energy fundamentally changes the relationship between people and energy so that communities own, control and benefit from energy projects in their locality. These projects can include renewable energy and heat generation, energy efficiency measures, and pioneering energy storage and demand management initiatives. The potential for community energy to contribute to a vast array of environmental, social and economic charitable objectives is huge. It’s this potential which first inspired FPF to support community energy projects, and why we continue to do so.” Many community energy organisations have re-emphasised their worth during the Covid 19 crisis. For instance, under lockdown Ferry Farm Community Solar in West Sussex set aside a £40000 fund to help a local food bank, vulnerable households and children who needed laptops to study at home. This form of speedy mutual aid and local resilience will be crucial in the years ahead.  

 The foundation has been deploying its capital and influence to accelerate the transition to a decarbonised, decentralised and democratised energy system with community energy at its heart. This programme of considerable support, Accelerating the 3D energy transition, has included grants to ground-breaking national and local groups; investments in community projects; and engagement with energy utilities, other investors, and policy makers.

 Colin Baines continues: “FPF is an endowed charitable foundation and we seek to use all of our capital in pursuit of our objectives, including grants, social investments and shareholder engagement. Community energy provides the opportunity for us to take an integrated approach.”

 FPF has provided grants to support truly innovative individual projects like Riding Sunbeams, a world leading social enterprise company that’s connecting community-owned solar panels directly to electrified rail routes to power trains. Direct supply of solar power to rail traction systems has never been done before. But it has huge potential to reduce costs and clean up the energy used by metros, trams and railways in the UK and around the world. After extensive feasibility work and research, Riding Sunbeams connected the first pilot solar array to the railway at their demonstrator site outside Aldershot station in 2019. The next phase of the project will go bigger, offering shares in new solar farms to communities and commuters, so that local people will own and benefit from the clean energy powering their trains.

 The foundation has made social investments in community energy projects, including purchasing community shares in the inspiring Awel wind co-op near Swansea, a two-turbine project that is expected to generate £3 million over its lifetime for a local fuel poverty charity.

 Colin Baines continues: “The beauty of these projects is that they are taking often technologically advanced solutions into neighbourhoods and showing how engaging with innovation can help generate cleaner, greener energy. At the same time, when surplus energy is sold back to the grid, there’s a payback to that same community in the form of a local fund. To date, communities are using this money to address local fuel poverty, purchase other community assets, provide youth employment training, pay for community facilities, fill gaps in public services resulting from local government budget cuts, and much more – it can be anything, the community is empowered to address its own needs and priorities.”

 The foundation has also supported Forum for The Future to develop an online matchmaking service, Power Paired, for community energy groups and the owners of sites with renewable energy potential; encouraging any asset owners from individuals to local authorities and private businesses or Trusts and Foundations, to register their buildings or land that could host a community energy project.

 “Not every project has to be a huge multi-million pound scheme. It’s just as important to see a local school benefit from solar arrays installed on its roof through a community energy project. And it’s not all about solar and wind. We’ve also awarded a grant to Repowering, a London based group, for the first community anaerobic-digestion plant, and to Bath & West Community Energy for a neighbourhood energy storage and demand management pilot scheme.”

 FPF has also used its investor power, and has engaged every UK energy utility company as a shareholder in support of the 3D energy transition and challenged their lobbying activity; and engaged government for a fair policy environment.

 “The Foundation has learnt that this integrated approach works. We’ve been able to engage huge utilities companies and energy networks to work collaboratively on innovative projects with community groups, and at the same time build more resilient business models. Thanks to our own experiences, we’ve been able to contribute to academic reports like the London School of Economics Grantham Research Institute for investor guidance to support a just transition, including recommendations for capital allocation into community energy shares and bonds; putting this investment class firmly on the mainstream investment agenda.

 “We will continue to support community energy. There are concerns over government policy and subsidy reductions in the sector, but we see that as more reason to engage. Your foundation can join us in helping to progress community energy. There is potential for match funding via grant giving, shared social investment opportunities, and we would welcome approaches on collaborative engagement of the utility sector and government. Trusts and foundations should seize this opportunity to support the sector at this exciting and critical time.”

 FPF is not alone in their support for community energy. Funders Barrow Cadbury have supported academic research in this area, including the research report Bringing local energy benefits to deprived communities. Furthermore, in February 2020, Nesta Challenges, part of the innovation foundation, Nesta, hosted a forum event to explore the challenges and opportunities for community energy at this exciting time of transition. 

 Dr Sarah Holliday, researcher, Nesta Challenges explains: “Following the COP25 talks on the global climate crisis where the issue of a ‘staggering failure of leadership’ was widely discussed, the argument for localised, grassroots and citizen-led action on climate change becomes increasingly powerful. At Nesta Challenges, our mission is to inspire and support smart, new solutions to big societal problems - and we know that communities are often best placed to find those solutions

“Community energy puts power into the hands of citizens and is one of the ways local people can come together to take collective action on climate change and benefit directly from decarbonisation.”

Many community energy projects had previously benefitted from the government’s feed-in-tariff subsidy for renewable energy generation, however 2019 saw this subsidy come to an end, leaving community energy groups uncertain about the financial sustainability of future projects.

Dr Holliday continues: “With the recent closure of the feed-in-tariff and move towards subsidy-free renewable energy generation, community energy groups will need to quickly innovate and adopt new business models in order to survive. For groups that are largely resourced by volunteers and minimal funding, this is a big ask. That’s where our role can be beneficial. Through our recent event we were able to bring together funders, regulators, government representatives, business, community energy practitioners and volunteers, to discuss and debate potential new business models in a post-subsidy policy landscape, and to consider the role of new technologies.”

A key part of the event was to brainstorm possible Challenge Prizes that could support innovation in the sector. Nesta Challenge Prizes provide a financial incentive for innovators, helping people with funding to support idea generation and development.

 “Nesta Challenges are at the early stages of involvement and research within community energy, yet already we can see the potential and the passion within this area. The energy transition is a large and urgent challenge, but it presents opportunities too. If we get the right people together now, we can generate effective and equitable paths towards decarbonisation and thriving communities for tomorrow.” 

 Now is the time to ensure empowered communities are at the heart of a just transition and recovery. Community Energy Fortnight is a provides a space for us to #HarnessOurPower as a movement in order to take hold of this necessary opportunity.

 For more information about community energy groups and developments within the sector, Community Energy England is the membership body representing 245 local groups and organisations. www.communityenergyengland.org