Community Energy Scotland (CES) has expressed its deep disappointment today at the UK Government’s announcement of the new Community Energy Fund. The fund, which is only available in England, was announced by the Government as an alternative to allowing amendments to the Energy Bill that would have allowed community energy schemes across the UK to sell their clean, renewable power to local people – and provide a guaranteed price for their electricity.
Following CES’s initial support for the amendments, as well as providing extensive input on what this fund should look like if they were not to go through, Community Energy Scotland have expressed their surprise and frustration both at the amendments being dropped and that the announced fund excludes Scotland, and have issued a call on the UK Government to rethink this decision.
Community Energy Scotland calls on the UK government to commit to the inclusion of local energy trading through the Review of Electricity Markets Arrangements (REMA) and to commit a portion of the Community Energy Fund to the devolved nations in order to ensure that communities all across the UK can take advantage of the huge opportunities in energy and decarbonisation.
Responding to the announcement, Community Energy Scotland’s CEO Zoë Holliday said;
“The argument from the UK Government that this fund replaces the inclusion of the community energy amendments in the Energy Bill doesn’t hold up.
“The potential for community renewable energy to benefit local economies is continuing to be blocked by unfair regulations; local communities are prevented from selling energy that they produce to local people and in turn tackling fuel poverty; increasing local resilience; and investing locally in communities. The impact of the Community Energy Fund will be trivial compared to the opportunities that communities could have had if these amendments went through.
“Furthermore, the proposed amendments in the Energy Bill would have had a positive impact for community energy groups across the UK, so it does not make any sense that any fund that is being launched instead of the amendments (or to act as a bridge until such time as regulations are improved for the better) applies only to England.
“While we appreciate and commend the Scottish Government’s consistent support for the CARES programme, any new additional funding in lieu of a UK wide change on legislation should be available to community groups across the UK, including our over 400 members in Scotland, either by allowing communities in Wales and Scotland to apply to the new Community Energy Fund or by allocating a certain proportion of this additional new money to be allocated to the devolved nations to distribute via their existing programmes.”
There will be opportunities to interact throughout including asking questions to the specially selected panels.
We are delighted to announce that Bobby Macaulay will deliver the Sandy Macaulay Lecture incorporating his father’s passion and pioneering work in community energy into his own expertise on community development.
Jill Keegan, Partnership Manager at Scottish Community Alliance, and conference collaborator, will demonstrate how SCA’s Community Learning Exchange programme supports the value of in person visits and how CES members can benefit. Jill will be on hand during the course of the day at the stall provided by Scottish Communities Alliance. This will be a perfect opportunity to discuss face to face with Jill how best your organisation can take advantage of CLE’s funding for peer learning visits.
Pauline Smith, CEO of Development Trusts Association Scotland will also join us along with her colleague, Morven Lyon, Community Shares Programme Manager, and they will be addressing the role and importance of community-led action in the just transition to decarbonisation.
Tom Lusink and Scott Watson, from Raasay Development Trust and Cumbrae Community Development Company respectively, will present work achieved so far as part of the Carbon Neutral Islands project. The project is led by the island communities to determine their own pathway and each island has now produced a Community Climate Action Plan based on the ideas and priorities identified by the people living there. The next phase of the project will involve taking these plans forward into real tangible actions that will help decarbonise local economies, increase resilience to climate change, and provide wider social and economic benefits. Ultimately replication across the wider country will support other organisations’ sustainable development plans.
Kristopher Leask, our Policy Manager, will introduce himself and this new role in our organisation. Kris will present the policy and advocacy work he has been focusing on to date and the plans for our membership to steer our future policy work. Dr Josh Doble, Policy Manager from Community Land Scotland, who has a key interest in the opportunities for progressive land reform within Scotland, will be co-delivering this presentation with Kristopher.
Lunch is provided onsite when there will be more time to network and discuss your community’s plans and aspirations.
Mid-afternoon, we welcome further inspiration from Felix Wight, previously Head of Development at CES and now Technical Director at Repowering London. Felix will share his own experience of developing local electricity supply models, exploring the benefits they can provide, and the current prospects for changes to legislation to make it easier for all communities to make the most of their power.
During the afternoon, we will facilitate focused discussion groups, covering critical topics, including those suggested by our members, and designed to share knowledge and develop ideas between peers. Key points will be identified and shared with everyone at the conference with an additional opportunity to raise questions to a panel of experts before we wrap up for the day.
Want to know more about how your community can act on renewable energy?
The Scottish Government’s Community and Renewable Energy Scheme (CARES) provides funding and support for communities to engage, participate and benefit from the energy transition to net zero. This year’s CARES conference, which takes place on Tuesday 19 September in Glasgow, is taking a closer look at how communities can take action – from decarbonising community buildings, community investing in windfarms and hearing big ideas from leaders in the sector.
This Scottish Government document explicitly states a goal of “maximising community benefits from, and ownership of, energy projects”.
While this is a welcome commitment, in our response to this important consultation, we have stressed the need and have detailed ways to address some of the Scottish Government’s strategic goals and plans relating to community energy and other community decarbonisation activities. Community Energy Scotland also recommends the Scottish Government considers longer term strategic goals in order to maintain a realistic perspective on its obligations and expectations, whilst fully addressing the needs of the communities it serves and tackling the climate emergency.
Critically, the need for clearer definitions to identify genuine community ownership has been highlighted. Emphasis has also been placed on the importance of enabling community groups and anchor organisations to use their skills and expertise for delivering local benefits in a fair and just way.
We have requested additional government support for communities to fulfil their plans and upscale their activities in order to thrive and to collectively contribute substantially to government climate-related targets. We are strongly urging both the Scottish and UK governments for significant policy change enabling local energy trading to create localised markets and support micro-grids and decentralisation of the energy market.
Yesterday we wrote, on behalf of our members, to Scotland’s MPs urging them to attend the House of Commons’ second reading of the Local Energy Bill on 9th May. Read our letter here.
Two weeks ago, the House of Lords voted to add two amendments to the Local Energy Bill at its Lords Report stage. This means that the Energy Bill now contains two new clauses – numbers 272 and 273, that would enable growth in community renewable energy schemes by allowing them to sell their energy locally.
This is a critical point in the life of the Bill as it now comes to the House of Commons containing the community energy enabling legislation we and others are calling for. All that remains is to persuade the Government to allow the clauses to stay in the Bill. The next vital step is to get many MPs to attend the Bill’s Second Reading debate in the Commons on Tuesday 9th May and to speak in favour of the clauses.
Power for People have been leading this UK-wide campaign and to date have the support of over 300 MPs, 78 national organisations and over 800 local organisations.
You can find an easy guide here for identifying and writing to your MP.
The Scottish Government has published its draft Energy Strategy and Just Transition Plan, which sets out key ambitions for a just energy transition that benefits communities across Scotland and protects our environment and energy security. Additional sectoral Just Transition Plans for Buildings and Construction, Land Use and Agriculture and Transport are expected to be published within the first half of 2023.
The Strategy includes commitments to increasing access to affordable energy, prioritising those in or at risk of fuel poverty. It also includes a commitment to maximising community benefits from, and ownership (including shared ownership) of, energy projects, and providing regional and local opportunities to participate in a net zero energy future.
The fact that Scotland has diverse communities with differing needs is recognised, and the report states that “by 2030, regions and communities will be empowered to participate in the energy transition in a way that meets their needs including increasing the number of community owned energy projects…. By 2030 the costs and benefits of the growth in our clean electricity generation will be shared equitably across society”. How this will be achieved is not specified; it will be important that community consultation on local issues is included in the final version of the strategy.
Specific programmes for rural and island communities are also highlighted, with Community Energy Scotland’s Carbon Neutral Islands project being mentioned, as well as £30 million of loans and grants for people on lower incomes in remote and island communities to switch to zero emissions vehicles. The need for investment in electricity infrastructure against rising costs of constraints is recognised, as well as the importance that charging arrangements are reformed as “in a net zero world it is counterproductive to care more about where generation is situated than what type of generation it is”.
“It is refreshing to see a draft Scottish Government strategy with communities at its heart. The recognition that a just energy transition needs to meet the needs of different communities and geographies is also particularly welcomed. We will now engage in the consultation process to ensure that communities are not only seen as key beneficiaries of the strategy but also as key actors in its realisation. Agencies such as Heat and Energy Scotland should work in partnership with local groups to reach the most vulnerable people and mobilise communities to help to achieve the Scottish Government’s targets on every aspect of energy, from reduction in energy demand, installation of additional renewable energy capacity and behavioural change towards public and active transport.
“Additional support for communities, both in terms of finance and capacity building, will also be required if the Scottish Government is to achieve its targets on active travel and energy efficiency, and especially its 2030 target of 2GW of community and locally owned energy, having missed the 2020 target.”
We strongly agree with the Government that we need to create a fairer energy system for all and we also agree that the Government needs to act to help all those across Britain who are vulnerable to the steep rises in energy prices. However, we must be careful that any scheme to protect consumers does not inadvertently and unnecessarily hurt local communities, particularly communities in disadvantaged areas that are trying to better their circumstances by developing and investing in community-owned energy.
It is important that any new regulations created or implemented under section 16 of the Energy Prices Bill include exemptions for community owned wind farms, solar farms and hydro schemes that reinvest their surplus back into local communities through projects that help the most vulnerable and strengthen and develop these communities in myriad ways, including vital programs targeted at reducing fuel poverty.
The Environmental Audit Committee’s report of 29 April 2021 (https://committees.parliament.uk/publications/5718/documents/56323/default/) recognises the wider benefits from community energy and calls on the Government to remove regulatory barriers and improve support to community energy projects. It would be counter-productive for Government in Whitehall to take money away from these communities, even when they are presumably trying to use it for essentially the same purpose of promoting social benefit and growth.
Additionally, given the Government’s ambitious environmental targets, any new regulations that require electricity generators to make payments must not disincentivise investment in renewable electricity generation in the UK either by comparison to the oil and gas sector or in comparison to revenue caps set in the EU.
As representatives of the community energy sector in England, Wales and Scotland, we have requested an urgent meeting with Ministers to discuss how the creation and implementation of regulations under the Energy Prices Act can achieve its goals in a way that does not reduce the ability of the community energy sector to deliver its services on the ground – which, in the midst of an energy crisis, are needed more urgently than ever.
This year’s report was produced by Community Energy England, Community Energy Wales and Community Energy Scotland, and is available to read from today. It describes the progress of the community energy sector across the UK in 2021 as well as providing a breakdown of the sector’s activities in each nation. This marks the second year that Scottish data has been gathered and is the first year that the survey and report was produced in-house by the three national community energy organisations.
As always, we are very grateful to all organisations that took the time to complete the survey this year. Maintaining an up to date database is crucial if we are to encourage and persuade policy-makers and other stakeholders to create a more supportive policy landscape for community energy at local, regional and national level.
We are also grateful to SP Energy Networks, our sponsors of this year’s report. Scott Mathieson, Director of Planning and Regulation at SP Energy Networks said:
“We are delighted to support the State of the Sector report for a fourth year. This year’s report is providing timely data for us, which we will be studying carefully to ensure we can support our local communities in the best possible way to help them realise their net zero ambitions.”
For the last two years, in addition to his regular role, CES’ Benny Talbot has been inputting to the RIIO ED2 process for deciding how our energy networks are invested in. Below he reflects on the process, and the likely changes ahead.
What is RIIO and why does it matter?
RIIO was created as a way to agree 5 year investment plans between Ofgem (the energy system regulator) and the Distribution Network Operators (DNOs) who own the network. This is needed for two main reasons. Firstly, because DNOs are sole network owners and operators in a given area, overseen by the regulator, Ofgem, which aims to create economic competition, ensuring that existing and future consumers pay a fair price for the cost of running these networks and get the services they require – the DNOs must balance this with the need to ensure the UK remains internationally competitive to shareholder investment; and secondly because ownership of the UK distribution network is divided between 14 regions, owned by 6 separate companies, so RIIO is there to help Ofgem set common standards for investments and standards of service across the whole of the UK.
While in practice RIIO is a long and complicated process, the essence of it is quite simple – first Ofgem sets out its expectations, then each DNO draws up and costs an investment plan to meet those expectations, and finally Ofgem reviews the plans and makes a decision on which parts of the plans to OK, and which to challenge or reject. All investment agreed upon is ultimately charged by the DNOs to energy consumers via their bills, plus a regulated profit margin.
However, the Climate Crisis has transformed RIIO from a complex but routine budgeting excise for maintaining the grid, into a key strategic forum to ensure we can achieve net zero, due to the massive strategic investment now needed to enable the grid to support the electrification of heat and transport, and the continued expansion of renewables.
This has also placed a dilemma at the heart of the RIIO process. Keeping investment as low as possible would mitigate the already spiralling cost of living crisis, but exacerbate the very real risk that constraints on the electricity network prevent or delay effective climate action. A better way forwards would be to pay for strategic investment in our networks via progressive taxation, not energy bills – but that decision is rests with the government. Until then, Ofgem is forced to navigate between two competing demands: fuel poverty, or climate action?
The RIIO process is struggling to evolve to meet these new tensions. In particular, given the rapid changes we are seeing in climate plans, targets, and the technology evolving to help meet these needs, the 5 year planning cycles of RIIO are beginning to look increasingly clunky. Instead, an increasing number of ad hoc ‘uncertainty mechanisms’ are being proposed to allow decision making within the 5 year periods. However, the devil will be in the detail of these new uncertainty mechanisms, and it remains to be seen whether they will be able to reach the right decisions, decide fast enough, or enable meaningful consultation with energy system users.
‘DSO’ and the implications for Community Energy
My role in all of this was as a member of the Consumer Engagement Group (CEG) for the SP Energy Networks (SPEN) region (the SP Energy Networks region covers southern Scotland, northern Wales and Merseyside). Over the course of the last two years, as SPEN developed their plan, they were to provide us with regular updates and the CEG was tasked with challenging SPEN’s plans to ensure that the needs and preferences of the energy system’s users were being taken into account. The CEG then wrote our own report on SPEN’s plan, to help Ofgem make its final decision.
Within the CEG, I led on responding to SPEN’s ‘DSO’ plans. DSO stands for Distribution System Operator, and describes a change in how networks could operate, in order to free up significant extra capacity. The basic idea is that instead of running a ‘fit and forget’ system, with enough spare capacity to ride out even the largest expected surges in demand or generation, DNOs could use modern digital technology to monitor and control power flows in real time. Much more demand and generation could then be connected to the existing wires, because the DNO would be confident that when the occasional surge in generation or demand arrived they could detect it and respond in real time (eg. by temporarily turning down some loads or generators) and keep the network safe. While there is no way to avoid the need for massive new investment in the network to enable net zero, DSO could reduce these costs and free up network capacity faster than would otherwise be possible.
However for DSO to really succeed, there will need to be a change in how we as energy users relate to the network. This is beginning to be seen as a need for ‘democratisation’ of the network, with energy users becoming more important and active participants – and also an opportunity for customers to earn money by providing ‘flexibility’ services to the DNO, in turning energy use or generation up and down to help manage network constraints. Of course, sharing more data on our energy use and installing new smart technology also comes with risks. Foremost among these are a loss of privacy, increasingly complex electricity bills, and/or those who are less tech savvy being left behind, ending up with systems they don’t understand and paying more for their energy.
Community energy groups, as local trusted intermediaries, should have a key role in bringing people together to navigate this new system, and support those who will otherwise be left behind. Meanwhile DSO could also open up new opportunities for community-led local energy projects, for example where groups bring together local energy users or generators to contract with their DNO and collectively deliver ‘flexibility’ services to the network.
SPEN’s RIIO ED2 DSO plans contain significant commitments, including; to roll out network monitoring and real time control via ‘CMZ’ zones (which can include Active Network Management) across around half of their network by 2028; to provide 80% of new generators with a flexible connection option alongside their standard connection offer; and adopt an ’assumed open’ process for the data they collect, sharing it via an online hub.
Among other issues, I challenged SPEN on how well they were able to consult on their DSO plans given the complexity of this new field, to provide much more specific commitments on what network data they will share, and to give meaningful consideration to where supporting domestic energy efficiency could be used as an alternative to network reinforcement. SPEN now propose to set up an independent panel to ensure that customers and stakeholders’ needs are represented as the DSO rollout continues, and have fleshed out their proposals for data sharing to include real time data and impending curtailment forecasts on ANM networks to enable curtailment trading – data that community generators on Orkney (in the SSEN rather than SPEN zone) have been requesting for the last 5 years.
Challenges from me and colleagues in the CEG also played a key role in SPEN deciding to publish a Just Transition Strategy and a Community Energy Strategy for the first time, both of which SPEN now propose to maintain and update regularly. I was impressed at how SPEN staff took forward these issues, recognising the significant role that community groups could play, and coming forwards with proposals significantly beyond the baseline required by Ofgem, including proposing a £30 million Net Zero fund (of which 25% would be ring fenced for support of community energy), and to provide dedicated community energy advice, awareness raising and technical support services, as well as support to local authorities in making Local Area Energy Plans.
Some key outstanding questions remain. Firstly, whether (and how) SPEN and other DNOs will recognise the potential for domestic energy efficiency upgrades to be used as an alternative to reinforcing the network. Secondly, how far DSO should be run as a separate entity to the DNO to avoid conflicts of interest – SPEN haven’t gone as far in separating the two as some UKPN, for example. Finally, it remains to be seen both exactly how much extra capacity DSO will free up, how cheaply, and how fast new capacity will actually be needed in the network; but the crucial mechanisms for monitoring its effectiveness, and scaling DSO and traditional network investment accordingly are not yet entirely clear.
SPEN’s RIIO ED2 plan and their DSO plan have now been published and can be viewed online, as can the CEG’s report on these plans to Ofgem. Ofgem will hold an open hearing on SPENs plan on 24th March, which is open to the public to attend, and expect to make final determinations on all plans this winter. The RIIO ED2 plans will then guide network investment from 2023 to 2028.
Benny Talbot, Innovation Development Manager @CES
At Community Energy Scotland we value our team’s and communities’ opinions. Blogs are a chance for us, our members and guests to share personal opinions and expertise, and do not necessarily reflect the views of Community Energy Scotland as an organisation. Please note opinions may change and Community Energy Scotland does not offer any endorsements.
The State of the Sector Report is rapidly becoming a go-to reference point both within and outside the community energy sector. The 2022 State of the Sector survey is live from today and you can find it here.
The report remains the most comprehensive dataset on community energy in the UK, even more so since Scotland’s community energy groups joined forces for the first time with England, Wales and Ireland last year.
Informative and inspirational, it has been building traction and growing the voice of the community energy sector in the wider world. As well as being cited in the UK government’s Net Zero Strategy, the report has been referenced by the Environment Audit Committee and numerous MPs during debates about local energy supply and the Local Energy Bill.
The data we captured last year, with thanks to community groups for their co-operation and sharing of their information, has been stored and we are looking for updates in 2022. If you took part in the 2021 survey, you won’t need to repeat information already passed on to us, however any new information is critical for the report to remain accurate and relevant.
For those who may be completing the survey for the first time in 2022, it is difficult to stress the importance of the facts you intend to share, so please pass on as much information as possible. There is an email address in the survey for you to get in touch for any help or questions.
By working together producing these reports, we help create a policy, regulatory and support environment that empowers us all to drive the reduction and flexible management of energy demand at the local level, across Scotland.
The full 2022 State of the Sector Report will be available later this year and we are looking forward to the results.
Scotland’s community energy sector took part in the State of the Sector survey for the first time last year, providing a significant contribution to a widely recognised document.
Due to the success of the UK-wide report as a whole and our part in it, the Scottish community energy sector will continue to play an important role in portraying the region’s current and historic decarbonisation and energy activity.
This year’s survey is due out on 16th February and all community energy actors are encouraged to take part. If you took the time to supply your organisation’s information last year, you won’t need to repeat the information. However we do want to record you in 2022’s report, so please do fill in the survey where it is relevant.