The economic and social benefits of community energy

5^th September 2013

Mark Walton highlights why communities need to meet their own energy needs

The Department for Energy and Climate Change is currently reviewing its policy towards community energy, seeking evidence of its benefits and a better understanding of the barriers to its development.

Earlier this year, as part of my Clore Social Leadership Fellowship, I was seconded to the National Trust to look at how it is supporting the development of a community hydro scheme on its land in North Wales. The case study was supported by interviews with thirty people involved in developing, supporting and financing community energy schemes across the country.

The research report, published by the National Trust as part of its contribution to Community Energy Fortnight, identifies some of the key social and economic benefits delivered by community owned renewable energy schemes. However, it is clear from the research that more needs to be done to define and measure their social and economic impacts, beyond their contribution to delivering the UK’s renewable energy targets. It also identifies a clear role for landowners and those with expertise in small-scale renewables to provide support to communities and help them overcome some of the barriers they face.

Social and economic benefits

When considering the social and economic benefits delivered by schemes, interviewees considered the main benefits to be economic. The ability to generate a long-term income, often in areas where there are few options for generating wealth, can lead to increased autonomy, empowerment and resilience.

The uses to which local communities put the surplus income varied. In most cases environmental concerns are the key driver for the development of community energy schemes. Income is therefore often spent on other environmental or energy related projects, such as the installation of micro renewables or improving the energy efficiency of local homes. However for groups and communities where the principle concern is the local economy, such as the case study example of Abergwyngregyn in North Wales, there is potential to use profits to improve local services, or to provide education or training bursaries for young people. Interviewees also reported a stronger sense of place, and even that renewable generation projects attracted visitors and provided new sites for cultural activities.

Measuring impact

Despite the level of interest demonstrated by Government, funders, practitioners and academics, only two systematic attempts to measure the social benefits of community energy schemes were identified.

• Community Energy Scotland conducted an Impact Survey in 2012 that used 5 point Likert scales to identify changes in a range of areas such as skills, awareness, engagement and wealth.
• New Economics Foundation has worked with Ashton Hayes “Going Carbon Neutral” project to develop a set of metrics that could be used for a Social Return on Investment study on the project.

Developing effective measurement of the social benefits of community energy schemes would contribute significantly to the evidence base to support policy development and social investment in this field.

Barriers

Interviewees reported that access to land, affordable finance, securing the relevant licenses and permissions and uncertainty over Government policy, were the key barriers to development of more community owned renewables.

Once planning permission is granted the income generation potential of renewables projects means that the capital expenditure associated with their development can often be financed through commercial loans. It is the pre planning stage, which can cost tens of thousands of pounds, that is difficult to fund.

The complex and long term nature of the projects can also mean that people are put off getting involved on what is usually a voluntary basis. Communities experience a sharp learning curve but the individuals involved rarely go on to develop a second project, so the next project in a different community has to start again from scratch.

Role of the National Trust

It is helping to overcome these barriers that is proving to be a key role for the National Trust. The Trust is able to share the expertise that is developing across a range of renewable technologies as it aims to meet its own target of generating half of the Trust’s energy needs from renewable sources. It is also able to provide access to land and, as a project partner, it can help lend track record and credibility to small community schemes.

The secondment, undertaken as part of the Clore Social Leadership Programme, provided an opportunity to identify the wider benefits that can be delivered by community energy schemes and the role that the National Trust could play in helping to deliver them.

As we mark Community Energy Fortnight it is clear that locally owned schemes have the potential to deliver more resilient and autonomous local communities, in addition to helping the UK meet its targets for renewable energy generation. Large landowners, and those with their own experience in the development of small-scale renewables, can help to realize that potential. To do so they must be prepared to share their resources and expertise in order to develop collaborative approaches to delivering new community energy projects.