Unlocking Community Energy Democracy

By Nick Pearse

August 15, 2024

The UK Labour Party’s overlooked Local Power Plan could be an ambitious force ushering in a new generation of renewable energy by handing power to the people. Although the possibilities for local energy democracy abound, public detail on the plan is scant. Labour is promising a £3.3BN fund to support community ownership of renewable generation. This would offer grants and loans to local authorities and communities to “create one million owners of local power,” according to the plan. The proposal would be for Great British Energy (GBE), “a new, publicly owned clean generation company”, to partner with councils and community co-ops to develop 8 GW of clean power by the end of the decade. Locally, that would come in the form of 20,000 renewable power projects.

Community energy, according to Community Energy England, includes projects that are “wholly owned and/or controlled by communities or through a partnership with commercial or public sector partners.” Community energy means lower energy bills, less pollution, and more spending — especially on renewables — closer to home. Most crucially, it’s secured local consent for clean energy projects that often flounder over a few rejections of nearby project opponents.

Unlocking the potential of the Local Power Plan — and that of community energy — means tapping into public-common partnerships where communities genuinely co-own, retain, and share the benefits from local developments.

Public-common partnerships are “a series of principles and processes that need to be designed and implemented on a largely case-by-case basis”, rather than a strict recipe to follow, write Keir Milburn and Bertie Russell.

However, there are some common ingredients. PCPs entail a joint enterprise between a local authority and a ‘common association’ (such as a community benefit association, or an energy co-operative). The common association board members could include trade union representatives, and subject matter experts from interested parties like academics or environmental organisations. GBE could act as the third public leg for this governance model, linking to higher-level planning, with each group in the partnership supplying a third of the new entity’s board.

A PCP model could be a dynamic source of community wealth building. Imagine Liverpool City Region and GB Energy partnering to build tidal projects; co-operative energy projects piloted in coordination with local government; or Greater Manchester putting up solar panels with community businesses. A public-common model could just as easily back North Ayrshire’s 2020 green community wealth building strategy in Scotland, or the community-owned Brynwhilach solar installation that will allow a co-operative to spend £2.7M on local projects over the next two decades.
What’s Stopping Us?

Despite all this promise, community renewable development has almost ground to a halt. Growth of community electricity capacity has slowed from 81% in 2016-17 to 2.4% in 2020-21 — something the Local Power Plan has the potential to reverse.

It’s stalling for three main reasons: a lack of public financing, prohibitive planning restrictions, and a lack of community consent.

First, the money. The collapsed growth of community electricity capacity largely tracks with the loss of supports like the 2010 to 2019 feed-in-tariffs (FiTs) and resultant increased uncertainty, stalling dozens of projects. Without long-term revenue payments like FiT, the number of community energy projects generating a surplus shrank from 90% to 20%. The FiT and the Renewable Heat Incentive, which was shuttered in 2022, covered between 10% and 79% of revenue in four case studies analysed by the UK Energy Research Centre. Investment data suggests UK renewable energy projects have dropped by half with the loss of subsidy support.

Then comes planning. Projects that generate less than 50 MW need to get permission from the relevant local authority, and to complete public consultation, in order to move ahead. Despite widespread public support for renewable energy, trivially small numbers of objections have derailed projects. This is the result of tougher planning restrictions, which Conservative MPs campaigned for in 2015, and thus created a de facto ban on onshore wind. The restrictions introduced that year had two main elements: first, onshore wind projects must be on land deemed suitable in a local or neighbourhood plan; second, all resident impact concerns must be addressed, and the project must have their backing. In September 2023, the Conservatives made a false start by seemingly lifting the single objection veto but didn’t go far enough. Zero new onshore wind plans have been submitted since those botched reforms. These rules are needlessly restrictive. Many councils lack the resources to update local or neighbourhood plans and a few opponents should not hold a veto on clean energy.

In the case of solar, there are roughly 12.5 GW of potential energy projects facing a two decade wait for approval. Ofgem has cited a “legacy of stalled, unviable and often highly speculative ‘zombies’”. It has recently clamped down on these underdeveloped projects by asking them to get formal approval from a project’s landowner before proceeding, but more work needs to be done to clear the way for viable renewable projects.

Notwithstanding all these issues, renewable energy is incredibly popular. Three-quarters of Britons support expansion of wind power, an Opinium poll found in 2022. Closer to home, 17,000 households opted to install solar panels per month last year. Reforming regulations so that most residents have the voice needed to push through projects may well be necessary; doing so on behalf of private power would only undercut public support. Winning community consent only occurs when workers and residents have the power to grant it.
How the Local Power Plan Should Win Support

As the think tank Common Wealth has argued, Great British Energy should have three roles: first, the large-scale development and operation of publicly owned renewable assets. Second, support in scaling domestic supply chains through the procurement of and direct investment in clean generation and infrastructure. Finally, it should take a role in capitalising and scaling community energy via the £3.3BN Local Power Plan — while leveraging additional resources from institutions with regional development and climate mandates, such as the UK Infrastructure Bank. To do so, the Local Power Plan should have three levels: a central GBE board, alongside local and regional counterparts.

The capitalisation fund should be uncapped. If there is greater demand from local authorities and communities for investment from the Local Power Plan into projects, then the scale of support should not be arbitrarily curbed. Instead, GBE should be able to issue bonds to enable it to support the more rapid buildout of publicly owned clean energy projects where there is demand and viability.

To decide where to invest, GBE should also create a large-scale map of high priority areas to guide investments, considering criteria such as regional deprivation, reported levels of fuel poverty, history of deindustrialisation, and capacity for wind and solar development.

Regional

Regional Boards would be charged with redistributing the surplus produced by local energy projects, directing funds to flow into either a new opportunity in their jurisdiction or addressing existing social need between communities with differing levels of energy production and profit.

Its board membership should be representative of the regional population, and include figures from community energy projects, local authorities, devolved government ministerial appointments (where they exist), workers, subject matter experts, and civil society. It could include participatory budgeting tools and serve regional industrial strategy, procuring and spending locally where possible to support unionised workplaces or those with larger numbers of people of colour or disabled workers, for example.

Local

Given the low ongoing operating costs of renewable energy, the remaining surplus of the joint enterprise could be split between the regional board and the local citizen association.

This may lead to questions of who the commons or community is when deciding investment on returns. For example, the benefits of a solar installation on the roof of a council estate, it might be argued, belong to the tenants or residents at large. The public-common model partly responds to this by having both wider and narrower community representation respectively between the democratic body (e.g. the local or combined authority) and common association, but realistically there may have to be a period of experimentation to determine what arrangement is appropriate in collaboration with local actors.

Local support can be achieved by offering material benefits, like reinvestments into the community via a citizen’s association, reduced energy bills, and more efficient power usage. A public-common partnership may simply choose to pay out a dividend to energy co-operative members after offering a limited amount of shares per resident.

These projects would also gain support as a source of employment, supplied by regional boards operating on fair wage clauses and guaranteed work conditions and support of union labour. While this would ensure equitable work access across the board, it would also overcome the barrier of low capacity to maintain energy infrastructure.

Municipalities would likewise have to demonstrate some level of capacity before receiving funding from GBE, which could offer recommendations and mentoring during this process. GBE would provide the necessary grants and loans to capitalise local projects, but in the interests of local ownership would restrict its governing presence to national and regional boards. Its role would also be to hand-hold development and planning, then step away to allow local governance to take the lead as long as local ownership requirements are met.

PCPs, by blending local governance with central capacity, would bring energy democracy closer to a reality and reduce the role private capital has played in the miscoordination of our energy system. Community consent to new projects is earned by handing over the reins to the people who live there. A just and fair Local Power Plan would disperse power to those who use it and produce it, not those who profit from it.


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Nick Pearse

Nick Pearce is a writer and researcher interested in climate, political economy, and democratic decision making. He holds a Master’s of Global Affairs with an environment speciality from the University of Toronto. Previously, he was an award-winning journalist in western and northern Canada.