A victory for community energy – Government respond with new funding and support

The Government have delivered on the changes we called for, ending uncertainty over the future of the Community Energy Fund, as well as providing new funding support for community energy in Scotland and Wales.  

Community energy refers to smaller-scale renewable energy projects owned and run by local people. It involves people in the community coming together to organise the production and management of clean energy. This could be solar panels on the roofs of public buildings, or wind turbines and hydro-electric projects in local fields and rivers. Any profits made from selling the electricity they produce are, very often, reinvested into the local community. They can provide energy efficiency advice to local homes, helping to reduce people’s energy bills, or even offer funding to other local projects.

A victory for community energy came on 21st March, as the Government announced a further £5 million in funding for groups in England through the now renamed Great British Energy Community Fund, and an additional £9.3 million in new funding for Scotland, Wales, and Northern Ireland. 

This decision ensures that support from the Government does not return to the damaging stop-start situation that in recent years has stifled the growth of community energy. 

The campaign’s strength rose from overwhelming public enthusiasm for the Community Energy Fund. In January 2024, the Government opened this fund as a direct response to our advocacy. Since then, it has awarded grants to 170 community energy projects, which is expected to lead to over 100 megawatts of new renewable energy generation, enough to power tens of thousands of homes. 

This enthusiasm meant that the fund was heavily oversubscribed. It had been allocated £10 million to distribute in grants over two years, and that £10 million was set to run out over half a year early.

The situation threatened to leave more than 100 groups - who had successfully applied for and been awarded funding - without the critical financial support they had been promised. From the outset, the fund had also excluded projects in Scotland and Wales.  

It is excellent that these groups will now be able to access new funding. We thank the Government for this decision, as it will support the progress of community energy projects across the UK.

The Great British Energy Bill and the Great British Energy Community Fund

This win builds on our recent Parliamentary success in February, which saw the Government amend the Great British Energy Bill to specifically include support for community energy.

The Bill sets up Great British Energy, a new publicly owned company intended to play a leading role in the Government’s plans to accelerate the transition to renewable energy. It is expected to spend £8 billion over the next few years growing renewable energy generation. Because of this, it was vital to ensure the Bill included support for community energy’s growth. 

After calling on thousands of our supporters to write to their MPs in a coordinated and targeted effort, we built substantial cross-party support in both Houses of Parliament. We were delighted that our organised nationwide advocacy led to a Government amendment to the Bill.

As the amended Great British Energy Bill returned to the House of Commons on 25th March, the Energy Minister, Michael Shanks, said this of the Great British Energy Community Fund: 

 “Community energy is incredibly important to give communities a stake in their energy future and to deliver the social and economic benefits that go with it. Just last week we announced a significant amount of funding through Great British Energy for community energy projects across England, and funding for Scotland, Wales and Northern Ireland to spend on similar projects, including community energy projects in their own areas.”

Pippa Heylings MP, Liberal Democrat Spokesperson (Energy Security and Net Zero), said: 

“The Great British Energy Bill gives a statutory steer that helps us have long-term plans. The clean energy transition has to be done with communities, not to communities. I commend the Government for committing an additional £5 million to the Community Energy Fund, bringing certainty at least to its short-term future.”

This marks a real step forward, as the Government puts words into action and support for community energy comes to fruition in these two encouraging successes. It is also a demonstration that focused, mass grassroots advocacy works. These successes belong to our supporters. If you or your organisation wrote to your MP, thank you. 

Looking to the Future: the Local Electricity Bill 

We turn next to calling for the more substantial reform that we have always argued is what community-led renewable energy needs if it is to realise its huge potential for growth.     

Community energy currently makes up just half a percent of the UK’s total electricity capacity. But the Environmental Audit Committee - a cross-party group of MPs that reviews environmental policy - has found that this could increase twentyfold within the next decade, if the right policies are put in place. That kind of growth could generate enough clean power to supply 2.2 million homes.   

The single most effective change that would unlock this would be to enable community energy groups to sell the electricity that they generate directly to local homes and businesses. 

The Local Electricity Bill, which we authored, would do this. If made law, it would give a huge boost to renewable energy and local economies, by making the costs involved proportionate to the size of the energy project.

In the last Parliament, Ed Miliband, then the Shadow Secretary of State for Energy Security and Net Zero, responsible for energy and climate policies in the Labour party, supported this proposed law alongside other members of Labour leadership. Miliband is now leading UK energy policy as head of the Department for Energy Security and Net Zero. 

We plan to have the Local Electricity Bill reintroduced into Parliament soon. We will need your help to build support amongst MPs to give it the best chance of becoming law. 

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