Community Energy as if People and Planet Really Mattered
Any vision of a wellbeing economy in Scotland must include strong, well-informed communities that define, create and share in their own prosperity. As part of that vision those communities must be able to take advantage of their renewable energy resources and address their energy issues through a democratic and sustainable energy system that also contributes to a vibrant local economy.
Greater energy democracy can be achieved through community energy, but what do we mean by community energy? Previously it meant community ownership of renewable energy generation assets. More recently, the definition has been widened to include a more diverse set of local energy projects that aim to decarbonise electricity, heat and transport energy use. These smart initiatives aim to help local communities engage with and gain from the smarter, more localised energy systems of the future.
Over the past 10 years, Scotland has seen the positive impact of community energy and the wider benefits it brings to local economies. Over 500 communities in island, rural and urban areas have been helped by Community Energy Scotland to own and install renewable energy assets (from single solar panels to large turbines and hydros). These communities have generated 38MW of clean energy, while communities across Scotland own generation capacity of nearly 80MW.
Those 500 communities have also directly earned over £5 million annually from their community energy projects. This is income they will receive each year for the 15 – 25 year lifespan of their assets. This is money communities control and use to invest in locally identified priorities, such as health and wellbeing initiatives, jobs training, enterprise development, housing, gender equality, youth activities and decarbonisation initiatives. This is money that communities do not have to beg for from funders or sponsors, or money that communities do not have to wait on local authorities or central government to involve them in spending decisions. This is their money for their local purposes and has enabled communities to fund initiatives to reduce inequalities, increase access to affordable housing and arrest rural and island population drift.
Scotland has a good news story to tell on community energy, yet despite significant support from the Scottish Government (through their Community and Renewable Energy Scheme), there has been a slow-down in new community energy projects. This is the same across the UK and for the same reasons as the regulation of energy is a reserved issue i.e. grid capacity, grid connection problems, costs as well as the loss of UK government subsidy for renewables.
However, there are opportunities for the community energy sector with the changes that the Scottish and UK Governments are aiming for – smarter more localised energy management and significant decarbonisation of heat and transport. For example, communities in Orkney, Mull, Edinburgh and other areas in Scotland have been at the forefront of innovative smart energy projects which have tested how communities could tackle fuel poverty, reduce their carbon footprint and create new social enterprises through local energy economies. The latter means that benefits are retained in the local community rather than escaping into large commercial ventures.
Yet without a number of changes, communities in fuel poverty will not see these benefits nor will the potential of a more democratic energy system be achieved. Firstly, capacity building is needed for community groups so they understand the forthcoming changes and are geared up to engage in energy market opportunities. Secondly, new regulations at a UK level are required to allow: the local use and sale of energy; peer trading and sharing of generation in tenements or groups of housing; and targeted support for community energy. Thirdly, the Scottish Government needs to refocus its policy and funding on genuinely ‘community’ owned rather than ‘locally’ owned renewables.
To improve community energy, particularly in urban areas, Scotland could learn lessons from Spain where 65% of people live in apartment buildings. The Spanish Government has recently passed legislation which allows shared renewable installations for self-consumption (i.e. you can use and share the energy you generate within your own tenement or building) and enables nearby buildings to exchange surplus electricity through “proximity” self-consumption. The legislation also provides for the right to be remunerated for electricity injected into the grid, simplifies the billing for small installations, and minimises the bureaucracy to shorten the wait for a facility to self-supply with renewable energy.
With a similar approach, Scotland could bring great benefits particularly to those in fuel poverty in both rural and urban areas.
More widely, at a time when people are looking for alternatives to our current economic model and asking what a wellbeing economy might look like in practice, we could do worse than look to Scotland’s community energy sector. Here is a sector that offers abundant examples of well-run social enterprises that generate profit for a defined purpose. In addition, community energy projects by their very nature adopt a commons approach to natural assets and democratise local decision-making in at least one important area. By supporting this sector and addressing some of the barriers outlined above, we would not only tackle inequality and fuel poverty at source but see more communities reap the benefits of participating in an alternative economic model.