How to encourage community engagement with mid-size ‘local energy’ projects
While putting a solar panel on your roof is easy enough, and ministers bask in the glow of extravagant, publicly subsidised renewable generation projects, getting a moderately-sized installation up and running proves more challenging. MPs have highlighted that mid-sized renewable generation schemes are falling through a “funding gap” despite their potential to add to the UK’s low carbon generation mix.
One solution could be to get communities more involved in planning and building the installations, a new Energy and Climate Change (ECC) committee report says. It recommends a swathe of policy measures to incentivise what it calls “local energy projects”. But before the government sets about creating a web of new regulations, it should cast an eye to the continent to learn how its European neighbours made successes of their community energy schemes.
Mid-sized energy potential
The ECC committee has released a report looking into the potential of projects with generation capacity between five and 50 megawatts – the equivalent of a small onshore windfarm. The report concludes that while the government has funding structures in place for large and small renewable electricity generation, it needs new policy measures to help incentivise medium-sized schemes.
The UK currently has 4.5 gigawatts of medium-sized renewable electricity generation capacity installed, with another 11 gigawatts in planning. But the committee warns the long-term potential for the schemes to help the government meet its renewable energy goal could go untapped, as they don’t currently qualify for the same government support as small or large scale projects.
While the UK is building some mid-sized renewables, planning approval rates are dropping. Geoff Wood from the University of Dundee’s Centre for Energy, Petroleum, and Mineral Law and Policy, says 74 per cent of proposals for onshore windfarm smaller than 50 megawatts were approved in 2007. By the end of 2012, however, that figure had dropped to 48 per cent in the whole of the UK, and just 29 per cent in England. Wood says this is a problem because the average size of proposed onshore wind projects is smaller than 50 megawatts.
Greater community engagement could overcome this, the ECC committee suggests. The government recently proposed new community benefits, which included quintupling the amount windfarm developers pay to communities to £5,000 per megawatt, and offering people money off their energy bills.
While this is a good start, the ECC committee says, the government needs to do more than encourage companies to pay off communities. One recommendation is to allow the Green Investment bank to issue loans for community owned schemes at the typically high-risk project development stage, based on the Scottish Government’s model . It also suggests setting up a free advisory service to help community groups negotiate the complex planning process and energy market regulations.
It might be wise for the government to cast its eye to the continent before it launches into creating yet another set of energy regulations, however.
Another way
Two countries in particular have ambitious plans for decarbonising their electricity generation – Germany and Denmark. And community-owned, mid-sized electricity generation is a key pillar of both countries’ plans.
In Germany, over 50 per cent of renewable electricity generation projects are owned by the public. Craig Morris, editor of online magazine Renewables International, tells us this came about more by accident than design. The way Germany structured its feed-in tariffs simply turned out to be more attractive to community groups than private companies.
Morris says the average investment return of about 6 per cent was too low for the projects to be deemed worthwhile by most of Germany’s major energy players, but was high enough to attract private citizens wanting to get a return on their savings. The subsidy was largely responsible for more than tripling Germany’s renewable power generation between 1999 and 2012, according to Oxford Institute for Energy Studies research – with much of that coming from mid-sized projects.
Meanwhile, in Denmark, a combination of tax breaks, generous feed-in tariffs and favorable loan criteria led to the formation of more than 100 community cooperatives, which own around three quarters of the country’s wind turbines. Denmark has been encouraging renewables development, with great success, since it suffered during the 1970s oil crisis. In 2012, 30 per cent of Denmark’s power came from wind, with smaller scale projects proving more popular than their big, eye-catching counterparts.
So while the UK is looking to pay communities for the inconvenience of having a wind or solar farm plonked in their fields, Germany and Denmark have found ways to include the public in each stage of renewable energy project – from planning through to operation.
The “golden thread”
Wood says his research shows that the “golden thread” binding many projects that failed to get planning permission is a lack of public participation and engagement. Community involvement throughout the process is key to a project’s success, he says. So if the UK government wants to replicate Germany and Denmark’s success, it will have to think about how it involves the public – from planning applications, to when profits start to flow.