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Key challenges for community energy

Younity blog | Apr 2021

Solar panels

By far the best thing about my role at Younity is the amount of conversations I get to have with community energy practitioners across the UK. You can’t help but be inspired when you hear of the work they are doing and how they are battling against an antiquated energy system in order to ensure the move towards a sustainable, low carbon future is equitable, operated by and for the communities in which they sit.

I truly believe community energy will play a significant role in the shift to a fairer, smarter energy landscape for the UK and across the world. The future is positive. But to get there, to continue that journey, there are some areas which need addressing in the short term.

Challenges and asks vary across all community groups but there are some consistent themes running through all conversations:

Financial Security

Deployment of standalone, new-build generation is not only critical to the growth of community energy, but to the UK’s sustainability targets.

The levelized cost of generation from renewable technologies is now in line with current wholesale market prices. This includes paying a return to community investors (typically 3.5-5%) whilst still providing a community benefit. Done on today’s prices, the finances stack up. However, long-term security over wholesale pricing, routes to market and unavailable debt provisions at the smaller scale still act as blockers to delivering new sites.

For these sites to come to fruition, they will need new innovative products such as Corporate PPAs, Innovative Finance or simply low-cost access to short term debt.

Engaging with Businesses

Some community groups would like support with approaching organisations, with the aim to develop relationships which could ultimately result in routes to market for their projects. This could be as simple as providing roof space to deploy community owned solar PV to more complicated Corporate PPAs which will guarantee them an offtake for 15+ years.

Administration/Volunteer Drain

There are still relatively few employed community energy practitioners. Most groups are volunteers giving up their time for a cause they believe in. The resource drain in operating a group – from launching share offers, to billing host sites or even marketing and PR can mean that even if they want to deliver new projects or innovations there can be a real shortage of resource to do so.

Membership – Size and Diversity

Community groups are extremely aware that their membership bases do not tend to be the most diverse groups of people. There is a definite need to raise awareness of the good work community energy does and increase participation from all walks of life. What does membership look like if you cannot afford to invest, but still want to contribute?

There are other challenges which I’ve not mentioned above (grid connection is an obvious one) but the above themes seem to run across the groups I’m regularly speaking to.