Medium-sized local energy projects could bring considerable benefits by engaging communities, raising energy awareness and increasing public acceptability of new low-carbon infrastructure but Government needs to do more to support their installation. This is the conclusion of the Commons Energy & Climate Change Committee in its report on Local Energy which was published on 6 August 2013.
The Committee's inquiry explored the role that medium-sized local energy projects of 10-50 MW could play in the UK's energy system and the extent to which Government policy currently supports these types of development. It highlights how these projects have difficulties accessing support as they currently fall in the gap between Feed-in Tariffs (FiTs) and the new Contracts for Differences (CfDs).
Medium-scale projects could contribute to the UK's energy mix but Government policy up to now has focused either on very large or very small schemes. Although the Government has shown support for community energy projects, it has neglected some other options, including projects owned by local authorities and projects owned by commercial organisations, which means that new capacity and new sources of finance are being missed.
As well as funding, the Committee found a number of other obstacles that are holding back local energy developers, such as connecting to the grid, obtaining planning permission and overcoming public opposition. It recommends that the Government introduce a support scheme to incentivise the development of medium-sized projects which are not served by either FiTs or CfDs, along with seed funding from the Green Investment Bank and a package of measures that cover finance, planning, grid access and advice.
One recommendation is that Government encourage industry to offer a stake to local residents for all new developments or consider the option of making a community ownership offer mandatory, in light of evidence that local ownership can help to boost support and reduce opposition to energy infrastructure projects.
In addition, Government could ease planning obstacles by encouraging local authorities to identify suitable areas for renewable energy development and to develop clear guidance about what is expected from local energy projects. There should also be national planning guidance on technical issues that hold up planning consent for wind turbines and other low-carbon technologies.
Bevan Brittan is actively advising both public and private sector clients on small and medium-sized local energy projects across the UK. This includes local energy deals involving both heat and power from renewable sources. A recent highlight includes advising the developer Balcas on a biomass project in Scotland – the first project to be part funded by the Green Investment Bank in Scotland.