How do we finance local “community energy” projects to take their place on the road to clean power and the energy transition?
The Government has allocated £1 billion in its Local Power Plan - £600 million in grants for local authorities and £400 million of low interest loans for community energy organisations - to achieve its ambitions for the part community energy projects will play in achieving Clean Power by 2030.
This funding is meant to foster essential collaboration with the local authorities in charge of planning for project development, and build capacity within the community energy sector.
But does the Government really know how and where to spend this money to maximise the potential benefits of community energy and achieve the Clean Power 2030 Mission?
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How can the Government, Great British Energy and other relevant bodies incentivise shared ownership of local energy projects and help address the challenges that communities face in financing this?
Leveraging private finance, as well as public funding, will be key to achieve the Government’s target of 8GW of power from community sources by 2030. But there are significant challenges in securing the investment and in making community energy projects financially viable.
Is a pooled fund for investment in community energy one of the answers, who would contribute to it, and what other levers – for example reintroducing tax relief for investors in community energy – does Government have to realise community energy’s potential in the clean energy transition?