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LGA sustainability briefing: community energy


Introduction

The UK is committed to reaching net zero by 2050. This means that the total greenhouse gas emissions would be equal to the emissions removed from the atmosphere, with the aim of limiting climate change.

Energy supply is the second largest contributor to UK domestic greenhouse gas emissions. In 2022, energy supply accounted for 20 per cent of the UK’s carbon emissions

Figure 1 - Greenhouse gas emissions by sector, 2021, by proportion (DESNZ, 2023)

Pie chart showing total domestic GHG emissions in 2021 of 426.5 MtCO2e including 26% transport, 20% energy supply, 18% business, 16% residential, 11% agriculture and LULUCF, 4% waste and 4% others.

 

 

 

 

 

 

Community energy refers to energy projects that are owned, controlled, or directly benefit local communities. These initiatives typically involve the generation of renewable energy – such as solar, wind, hydro, or biomass – at a local scale. 

However community energy projects do not always focus on energy generation.  They may also focus on energy efficiency and carbon reduction, and can include joint energy purchase schemes, car share clubs, electric vehicle charging point schemes, and household energy reduction initiatives.

What sets community energy schemes apart from others are their focus on community involvement, ownership, and the reinvestment of profits back into the local area.

This briefing explains the business case for local authorities to support the creation of local community energy schemes and sets out suggested interventions that local 

authorities can take across different areas.  It is one of a series of LGA briefings relating to environmental sustainability. 

The business case for action

As well as playing a key role in meeting the UK’s net zero target, supporting the local development of community energy projects has positive impacts on equality, social cohesion and economic opportunity: 

Economic benefits

  • Community energy projects can generate revenue and create jobs within the local area. In 2021 community energy businesses raised £21.5 million of investment for new projects and spent £15 million of community energy income to boost local economies.
  • Energy efficiency projects can save residents expenditure on energy. The sector’s energy efficiency interventions are estimated to have reached 57,600 people/organisations and saved over £3.3m for UK households in 2021.
  • Profits from locally generated energy can be used to set up a community benefit fund.
  • By directly investing in renewable energy infrastructure, local authorities can attract funding, stimulate economic activity, and provide employment opportunities for local residents.

Carbon reduction

  • Transitioning to renewable energy sources is essential for combating climate change and reducing carbon emissions. Community energy projects contribute to this transition by displacing fossil fuels with clean, renewable energy sources, or reducing energy consumption.
  • Community energy businesses can help local authorities progress their strategic objectives (e.g. net zero, climate emergency, local economic development, social engagement, fuel poverty reduction). They can also help local authorities to engage local communities with Local Area Energy Plans. 

Equality and social cohesion

  • Community energy projects have the potential to bring people together, fostering a sense of community pride, collaboration, and shared purpose. 
  • Retrofit projects can regenerate and renew homes, making them fit for the future and bringing health benefits to residents through increased insulation and reduced fuel poverty.
  • Some community energy projects have broader social roles and provide not just energy advice to households, but also advice on claiming benefits and managing energy debt
  • By involving residents in decision-making processes and offering opportunities for participation, these initiatives can strengthen social ties and enhance community well-being.

Local ownership and control

  • One of the key advantages of community energy projects is that they empower local communities. Communities have the opportunity to take ownership of their energy production, ensuring that decisions are made in the best interests of local residents.

Further information