What chance for new community energy projects in the future?
As you may know the government has launched a consultation on the Feed in Tariff, the main mechanism for supporting small to medium scale renewable energy projects in the UK. The proposal is that from January next year, there will be a major cut of up to 87% in the tariff. As you can imagine, this will have a devastating affect on the industry and in particular on our community energy sector.
It is important to note it will not affect our existing projects or those that have already been registered, but it will drastically affect the potential to realise new projects.
We know the government is getting a lot of responses from the community energy sector and we will be adding BWCE’s voice to this. We hope that you will add yours too.
In summary, BWCE will be saying that:
1. Community energy is capable of delivering a wide range of additional benefits beyond renewable energy capacity, not least the re-investment of profits back into local communities ensuring that local communities benefit significantly.
2. Even though community energy is rapidly growing, it is particularly vulnerable to such heavy cuts as it has less access to commercial and institutional finance than its commercial counterparts.
3. Within the next few years as the community energy sector matures, communities may posssibly be able to compensate for the loss of the Feed in Tariff through the development of creative financial instruments, perhaps via the Green Investment Bank, or through local supply offers that enable them to secure greater value for their generating assets. But in the meantime they still need support of the FiT.
4. Some renewable energy technologies like solar PV could well reach grid parity within the next 3-4 years, the point at which time renewable energy will no longer need subsidy to compete with conventional energy generation. However the drastic cuts to the Feed in Tariff are too much, too quickly. The harm they are likely to do to the sector will set back the move to grid parity, rather than bring it closer.
5 In the short term, without the Feed in Tariff, it is probable that the community energy sector will wither before it is ready to stand on its own – without subsidy.
In addition we will also press hard for the re-instatement of pre-accreditation which was removed on 1 October. This is the process by which projects can secure their Feed in Tariff level at the point they have planning and a grid connection offer, rather when they commission. Without pre-accreditation it is impossible to model financially whether a project is viable or not. In consequence little can get built with any degree of comfort for potential investors.
What can you do?
You can add your voice to the tens of thousands of others who are responding to this threat to our industry by:
1. Getting involved in the online campaign run by 10:10. Their ‘Keep Fits’ campaign can be found here. Responding to their simple questions provides an easy way of making your voice heard within the context of the consultation.
2. Signing the online petition started by 38 degrees here.
3. Most importantly get in touch with your MP. Ask them whether they are concerned about the prospect of undermining the community energy sector in this way, if you are already a member of a community energy organisation, tell them why you think community energy is a good thing and what motivated you to get involved. Ask your MP to write to the Secretary of State, Amber Rudd, to voice their concern about the impact on community energy and their communities.
A number of MPs, including some Conservatives have voiced their concerns, it is important to encourage more to speak out. We have lobbied our local MPs as have many others in the South West and across the country.
So while stocks last….
In the first half of November we will be launching our last share offer to fund projects that have already secured the current Feed in Tariff and so are not vulnerable to the proposed cuts. So, keep looking out for your BWCE newsletter for more news and email us on [email protected] if you are interested in investing. Please forward this newsletter to friends, colleagues and neighbours so they can get involved – while they still can!
Bath & West Community Energy
E: [email protected]