As long-term advocates of community ownership, we were proud to represent the sector in parliament this month, giving evidence to the Energy Security and Net Zero committee inquiry ‘Unlocking community energy at scale’. From community energy groups to facilitators, charities and funders like Thrive, it brought together leaders from across the industry to have an insightful discussion on the potential of locally owned projects and the barriers to progress.

One of the questions asked was whether a public awareness campaign would be helpful and, if the above stat is anything to go by, our response is yes! Community energy is a climate solution that could be accessible to thousands of people across the country, yet many are unsure of what it is and how to access it.

What is community energy?

According to Community Energy England, “community energy is about people and communities taking democratic control over their energy future, by understanding, generating, using, owning and saving energy in their communities”.

In many cases, this would be when a community takes control and owns, or has a share, in a project producing clean energy – for example, the Ambition Community Energy turbine in Bristol which has been operational since 2023. The clean electricity generated helps power homes and businesses, while revenues are used to fund other local initiatives.

What change do we need to see for community energy to flourish?

Although community energy has been gaining momentum for a number of years, the new government has shone a light on the sector – with specific reference to supporting community projects in both its Local Power Plan and Great British Energy Bill.

However, there are various challenges community energy groups face when developing their own projects, in particular a lack of funding, sometimes skills and expertise and access to appropriate sites. As part of the committee inquiry, Thrive suggested that we need to see a positive change in at least one of these areas:

Revenue / power price – Revenues are driven by the underlying productivity of the project (MWh) and the route to market (power prices). One key change the government could make is enabling community energy projects to participate in its Contracts for Difference auctions, which provides more revenue certainty. This is not currently accessible to community groups as most projects are too small to participate.

Development and capital expenditure – Government funding currently tends to flow more to feasibility studies than developing projects, prioritising innovation over typical developer skills (land agents, property lawyers, developers). We propose GB Energy to offer a revolving fund of low interest, long-term construction loans designed to complement private sector investors and development loans with write off ability.

Grid connections – Another way to bring down upfront costs would be for GB Energy to fund the grid infrastructure and then charge the community an annual fee over the project’s lifetime. At the end of its life, the project could be repowered in which the new project would continue payments to GB Energy. The investment case into grid by GB Energy could be long term and given the lower risk profile could attract lower cost of capital.

It is vitally important that support is provided by Great British Energy to make projects viable, but great care should be taken to ensure that finance is carefully blended, so public money seeds and facilitates private and community investment rather than replacing it.

How is Thrive helping to unlock local investment?

We believe that there is huge opportunity for community energy to scale up, with the potential to transform people’s attitudes to renewables locally. This can be achieved with a blend of finance from the private and public sector.

Thrive has committed to offering local Community Benefit Societies up to a 10% stake in all future projects. This builds on our track record of facilitating shared ownership, from the first wind farm we built in Cumbria to becoming the first commercial developer in the UK to offer the local community a stake in a battery storage project.

We’re also helping to facilitate projects through our new partnership with social impact investor, Better Society Capital. The joint venture, Community Energy Catalyst, will bring together £40 million to support local communities to build their own clean energy infrastructure or secure stakes in larger regional renewable energy schemes.

Community Energy Catalyst will make investments ranging between £0.5 million to £30 million in individual projects which are at least 1MW in size and employ proven technologies such as onshore and offshore wind, solar PV and hydro-electric. The joint venture will target late-stage development projects that have already secured planning consent, enabling them to advance through to construction, commissioning and operation while aligning with local objectives.