20 October 2023

How the Local Power Plan will transform the energy sector

Proposals to underwrite and provide seed capital to community renewables projects have largely gone under the radar.

The last year should have been a turning point for how the UK’s energy system works. Consumers faced spiralling bills while multinational oil and gas companies made record profits. Simultaneously with the energy crisis, we’ve also arrived at a tipping point for the green transition, and the need for it to provide genuine benefits for ordinary people and communities across the country.

Under these circumstances, it is doubly perplexing that the government has pursued a policy that has choked off a burgeoning revolution in community-owned renewable energy generation schemes. Its own net-zero tsar, Chris Skidmore, stated in his report that community-owned energy had been neglected. But further than neglect, it was effectively hobbled by government inaction.

We need new thinking to unleash this transformative sector. Labour’s Local Power Plan proposals – part of the party’s mission for zero-carbon electricity by 2030 – have flown largely under the radar, but they would provide support for the community energy sector to power more than two million homes and create up to one million individual owners of energy across the country. The plan would invest up to a billion pounds a year in community green energy schemes, with £400m earmarked for community-owned energy (the government’s current community energy fund only sets aside £10m). That could be anything from local councils installing solar panels across their social housing stock, to city regions investing in onshore wind capacity for their areas. One already-existing project, presented as a model of good practice, is in Bristol, where a group of local people from an estate on the outskirts of the city sought ideas to generate revenue to keep their local community centre going. The community group, from the Lawrence Weston housing estate, came up with the idea of building a wind turbine which would be owned and run by local people. After battling red tape and scratching together funding, the community now owns the largest onshore wind turbine in England – providing power for over 3,000 homes with profits going back into the local community.

Despite the lack of government support, community energy schemes have continued to grow in recent years, and the implementation of the Local Power Plan would usher in scores more by removing regulatory burdens, providing seed capital, and underwriting worthwhile schemes that cannot readily access investment from the private sector or massive loans with favourable terms.

With the mix of loans and grants, allied with proposed improvements to the planning process, this will mark a massive shift in who owns and benefits from energy generation. As Ed Miliband, the shadow net zero secretary, promised at this year’s Labour conference, this is a policy which will be key to “cutting bills, tackling fuel poverty and creating profits not for energy giants, but for local communities”. It will sit at the heart of his pledge to use energy policy as “a tool of economic justice”.

The rapid expansion of community-owned energy will create an energy system that is decentralised and decarbonised, that will harnesses local passion, expertise and money. Most importantly, its profits are dedicated to benefiting the local area and building communities through its power to convene, connect and drive co-operation. The community of Lawrence Weston isn’t alone. People up and down the country are already buying into the idea of owning their own energy supply. From rooftop solar in Hackney to solar farms in Heeley, community-owned energy projects show another way is possible in an energy market that is currently owned and dominated by foreign investors.

To turn isolated, inspiring cases and examples into a genuine nationwide movement, in every community in the UK there needs to be the proper funding and policy environment. As the country continues to battle with soaring energy prices, there has never been a more important moment to invest in cheap, clean renewable energy produced and owned domestically.