Shared ownership projects will be crucial to meet the UK’s community energy goals
Energy4All have submitted a response to the government's call for views on their working paper regarding potential mandatory community benefits for low carbon energy infrastructure, and shared ownership of renewable energy schemes.
What is shared ownership of renewable energy?
Shared ownership is when a community (which could be a community of shared interest or from within a geographical location) can invest to become partial owners of a renewable energy project. Shared ownership can take several forms – as a joint venture, as a revenue share project, as a split-ownership project or as a community-led project. A community having shared ownership in a project differs from them receiving community benefit payments (though shared ownership projects can offer these too) because the community has representation and direct participation in the long-term project.
Energy4All’s experience
Energy4All has supported 11 shared ownership co-operatives across the UK, spanning two decades. Energy4All itself was founded by the Baywind Co-operative, which started as a shared ownership wind project in Cumbria in the mid 1990’s. Since that point there has been mounting evidence that community ownership schemes deliver greater benefits and empower communities more than community benefit payments alone, however the growth of shared ownership in the UK has been slow compared with countries in the Europe where shared ownership is mandatory.
Shared ownership projects key to meeting climate goals
Without shared ownership projects, the government is unlikely to reach its target of 8 GW of community energy by 2030 under the Local Power Plan. We recommend mandatory shared ownership of renewable energy projects over a minimum size threshold – for example 5 MW for projects that export all their power to the electricity markets.
The two most common deal-breakers Energy4All have experienced in regards to shared ownership projects are:
A lack of early engagement: if communities aren’t involved from the start, there’s less time to develop governance structures, raise investment or influence project design. Retrofitting shared ownership rarely works well.
Insufficient community capacity: these are highly complex projects and even motivated groups (which are usually run voluntarily) need time, advice and support to engage effectively.
Therefore we recommend strong support measures and clear, standardised engagement to avoid tokenism and community exclusion in the development process. Some of the examples we give are:
- Introducing a clear timeline, and engaging the community well before planning submission
- Clarifying the role of intermediaries like Energy4All in structuring and supporting offers
- Introducing incentives like grid priority to developers who genuinely incorporate shared ownership from an early stage
- Early-stage funding and technical assistance for community energy groups
We also recommend offering flexibility in how shared ownership is offered – this accounts for the diversity that already exists in joint ventures, revenue share schemes and so on.
Where to learn more
Read our full response to the working paper here.
Community Energy England, Scotland and Wales have also collectively produced a a policy paper about shared ownership.
We give two examples of projects we have supported in shared ownership on the Work With Us category on our website.