UK adds £10 million for community renewable energy schemes

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The United Kingdom’s Department of Energy & Climate Change (DECC) has announced the launch of a new fund giving community groups in England the opportunity to bid for grants of up to £20,000 or loans of up to £130,000 to help kick start renewable energy projects.

The Urban Community Energy Fund (UCEF) adds £10 million to the number of community owned renewable energy schemes in England. The DECC said the fund would allow community groups to create "power hubs" in their area.

"Installing solar panels on local buildings or factories or building an anaerobic digestion plant to create energy from local waste can save whole communities money,” the DECC said in statement, adding that in East Sussex, the south east’s first ever community energy scheme had installed solar panels on Harvey’s Brewery. While the brewery benefits from lower energy bills, the community benefits from money back under the feed-in tariff.

“I want to give more people the power to generate their own electricity and by supporting community energy projects we can — helping them drive down their energy bills at the same time,” said Energy and Climate Change Secretary Ed Davey, who announced the funding on a visit to the brewery on Thursday.

“That’s why we’ve pledged £10 million, so communities can play their part in generating renewable power at a local level. This is all about investing in renewable energy sources, creating jobs and changing the way renewable energy is developed in the UK.”

The community energy sector will also see its first major shake-up since the launch of the Community Energy Strategy in January this year. Community electricity projects stand to receive further support under the feed-in tariff scheme, according to the DECC.

New changes to the community energy support scheme include:

  • Registered charities will for the first time be entitled to the same benefits as other community groups
  • Two community projects (or one community project and one commercial project), each up to 5 MW, will now be able to share a single grid connection and receive separate feed-in tariffs
  • The FIT will now be guaranteed for an extra six months – giving communities more time to get their project up and running

Kathy Smyth, policy director of Community Energy England, said, "Without risking the integrity of the wider feed-in tariff scheme, this will stimulate community involvement in larger renewable schemes. It will be a great boost to projects using the split ownership model under the voluntary protocol for Shared Community Ownership, which Ed Davey launched earlier this month."

In addition to the changes, a Register of Community Benefits and Engagement for onshore wind projects has been launched to help other communities with proposed wind developments in their area.

Last month, ethical investment exchange company Ethex reported that renewable energy projects were the most popular type of community investment, with £29 million raised for 56 projects since early 2012.

The government’s support aims to stimulate further community investment into the renewable energy sector and help the U.K. achieve 15% of its energy consumption from renewable sources by 2020.

The program means wind, solar, biomass, heat pumps, anaerobic digestion, combined heat and power and hydro projects planned in any urban area across England will be eligible for financial support from the Urban Community Energy Fund. UCEF is a counterpart to the Rural Community Energy Fund, which currently supports community renewable energy projects in rural areas. Since its launch in summer 2013, the rural fund has awarded grants and loans to 41 community projects worth nearly £700,000.

Scotland and Wales have their own community energy schemes.

The U.K.’s Renewable Energy Association (REA) applauded the move to allow community groups and commercial developers to be able to share a grid connection for jointly developed renewable electricity projects under the feed-in tariff.

“This effectively doubles the size limit for projects developed in this way,” the REA said. “For example, a solar farm 50/50 owned by a commercial developer and a community group can now be up to 10 MW in size instead of the usual 5 MW limit.”

REA Community Engagement Adviser Gaynor Hartnell added that this created "a powerful incentive, especially for solar project developers, to co-develop schemes with community groups," allowing parties to share costs on planning and grid connection.

A renewable energy industry taskforce outlined the split asset model in its recent report to the DECC.