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Community owned renewable energy - a win win win to protect people and the planet

 

Heatwaves, melting ice sheets, flooding… the disturbing reality of climate change has become much more evident in recent months, and the warnings are increasingly stark – climate anxiety is becoming the new norm for a lot of people.

Just last week, the Intergovernmental Panel on Climate Change (IPCC) issued a special report on climate change and land, highlighting the critical need to think more sustainably about how we use land. It also cited the need for a rapid reduction in carbon emissions from other sectors -including energy generation - of around 45% by 2030 in order to keep the rise in global temperatures below 1.5C this century. However, a growing number of experts now believe that we only have until the end of 2020 to halt the damage being done to the planet.

A brutal reality check
Having set a legally binding target to limit harmful emissions by 2050, you would be forgiven for thinking that the UK Government’s climate action plans would be well underway.

However a recent Climate Change Committee report warned that the policy-making team are already stumbling and not creating the policy changes required, likening the preparations to 'Dad’s Army’ - a worrying assessment.

Doug Parr from Greenpeace UK said: "This is a truly brutal reality check on the government's current progress in tackling the climate emergency. It paints the government as a sleeper who's woken up, seen the house is on fire, raised the alarm and gone straight back to sleep".

However, there does seem to be a glimmer of hope with this week’s letter from 150 MPs calling for barriers to be removed to encourage the development of onshore wind by changing planning rules and making these projects eligible to complete for contracts to supply electricity to customers which they are currently excluded from doing.

Hot air from the energy supply companies
Despite proclamations of a shift towards renewables, the energy supply companies are still overly focused on energy from fossil fuels and are not investing at the scale or speed required to support a rapid decarbonisation of the UK’s energy sector in line with the UK’s commitments to limit greenhouse gas emissions. Although the UK’s energy mix is changing (with some days more than 50% of the UK’s electricity coming from renewable sources) – the pace of change is just not rapid enough.

One of the main problems with energy generating companies in this country is that the majority of them exist to create shareholder value and often this means prioritising short term returns rather than more sustainable power generation options, which has also been exacerbated by the longterm policy vacuum in the UK. The energy sector has to fundamentally change to one that is much fairer and equitable, where everyone benefits and short-term profits don’t come at the expense of the poorest in society and the planet…and here at Ethex we feel that democratising energy production and the financing of this is ultimately the best way forward.

Grassroots solutions
With the government seeming to be already failing in their climate ambitions, and the major energy suppliers doing too little to address the problem, now is the time to look to community energy as a model to deliver the low carbon change that people so desperately want. It is time to re-think how our energy is generated - putting effective policies in place to support and incentivise the rapid development of community energy projects in the UK – effectively putting the whole sector on steroids!

 

What is community energy and why should I care?
Community energy schemes allow people to invest in projects that produce clean, renewable energy, owned by the community for the benefit of the community. They are a great way of democratising clean energy production while putting people who want environmental change in control of the process.

Two great examples of community energy projects that have pioneered the community-owned approaches are Westmill Solar – which is the first community-owned solar farm in the UK and has over 1,500 members, and Low Carbon Hub which develops community-owned renewable energy in Oxfordshire and has a portfolio of 38 projects funded by 1,000 everyday people who’ve invested over £5 million to enable these projects to be built.

The ordinary people that have invested in these projects gain both a fair financial return from their investment and a positive social and environmental return by having their money put to work to directly tackle climate change.
Policy setbacks
Only two years ago the community energy sector was flourishing with 60 – 70 new projects each year. This should have been a trend that accelerated with the lowering cost of technology and the sector becoming more established.

However, in May this year, the UK Government dealt a devastating blow to community energy initiatives when it scrapped the renewable energy subsidies including the Feed-in-Tariff, leaving many new community energy schemes in limbo. At the same time, Britain increased support for fossil fuel projects overseas to almost £2bn last year and supported fracking in the UK. It doesn’t take Einstein to figure out there’s something very wrong with this picture, does it?

A vibrant sector?
Despite these challenges, established community energy projects are performing well but the once vibrant sector has definitely been somewhat curtailed in its infancy. Although the sector has been negatively impacted by reductions in subsidy support and the scrapping of the feed-in tariff, data from the Community Energy England State of the Sector Report shows that community energy continues to demonstrate resilience and determination: in response to increasing challenges, communities are developing new business models and exploring innovative new technologies and approaches to low carbon development, including innovation around energy storage capabilities and solutions around electric vehicle charging infrastructure.

It’s clear that the sector could once again flourish with the implementation of the right policy incentives such as feed-in tariffs. Add to that investor incentives such as Social Investment Tax Relief – which can also encourage the flow of investment into these kind of projects from people like you who also want to use their money to deliver impact, then the community energy sector could really start to blaze a trail and provide local communities and the UK as a whole with a viable and much more equitable alternative for clean energy generation.

Who wins?
Community energy initiatives allow communities to take control, generating more renewable energy that not only provides households with an affordable source of energy and makes much-needed cuts to carbon emissions, but that also often generate surplus funds that are funnelled back into providing other vital community services.

Community funds, often boosted by income from community energy schemes can fund the development of other carbon-cutting initiatives, such as energy storage or electric vehicle infrastructure, as well as providing resources that are owned and run by the community, without reliance on council or government funding.

However, these projects can only really be developed by securing affordable levels of finance. These can come from a variety of traditional sources but much more appealing to many community projects is securing ‘people powered finance’ e.g. communities investing in, operating and maintaining their own clean energy projects that benefit the planet, people and local communities alike.

The power of the investor
At Ethex we strongly believe it’s time for a shakeup of the energy generation sector and that investment in community energy schemes will provide a realistic alternative for communities. Through our platform, almost £50 million has been invested into 60 community energy initiatives, by individuals wanting to take action and support causes they believe in – that’s a lot of money being used to support initiatives tackling climate change!

 

A disruptive approach
If we take a look at Africa, we can see how more innovative and disruptive approaches are being used to successfully tackle the clean energy and climate crisis. In a continent where around 60% of the population are living without access to electricity, a number of pioneering businesses are taking grassroots action, harnessing the plentiful sunlight to provide electricity to homes via off grid solar energy. Through Energise Africa, UK investors can use their money alongside institutions such as UK aid, Virgin Unite and Good Energies Foundation to help these businesses reach even more homes in rural parts of sub-Saharan Africa Innovative financial mechanisms such as new investor guarantees, first loss capital and match funding are successfully being deployed to de-risk these investments for individual everyday people.

It is this kind of innovative and disruptive thinking that we in the UK (and the government) should be looking to as alternative approaches to catalyse grass roots action on climate change.

So, if climate change is giving you sleepless nights then remember you can use your money in ways to support community ownership of renewable energy as it’s a win, win, win solution for people, communities and the planet!

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