Community Energy: The new energy sector in the UK?

In January, the UK Department of Energy and Climate Change (DECC) published its first ever Community Energy Strategy. Community engagement is seen as an integral part of the UK’s aim to reduce greenhouse gas emission by 80% by 2050. DECC state there are already over 5000 community groups in the UK working to transform how their community uses energy and they would like to see this extended into every community.

There are four main energy project types communities are coming together for:

Collective switching

This is where householders combine their energy usage and use the benefits of collective purchasing to negotiate a much more competitive fuel price with the energy suppliers, be it for gas, electricity, heating oil, wood fuel or coal. This scheme has proved particularly successful with householders who have never switched energy companies and are, as a consequence, on very uncompetitive tariffs. These schemes can be solely locally based or communities can register in larger nationwide programs such as the Big Switch Initiative run by Which? That was launched in 2012.

Reducing Energy use

Are you using more energy than you should? How do you know? Communities and neighbours coming together to discuss these issues may be a great way to benchmark what a home in your area should be utilising. Low energy users can give advice to their friends and neighbours on what energy saving tricks have worked for them and share the dos and don’ts of what to try. Another benefit of communities working together on energy is it can be an excellent way to attract investment from energy companies, who are looking to spend their energy efficiency improvement obligations, particularly on low income and vulnerable households. It is more productive for these companies to provide efficiency measures to a full street in one larger project rather than many single household projects.

Generate Community Energy

One of the most popular ways communities engage together in energy projects is to generate some of (or all) of their own heat and electricity through renewable energy generation technologies. The energy generated in used directly where it is needed offsetting the need to buy increasingly expensive grid electricity or heating fuels. Government backed incentives such as the Feed In Tariff (FiT) and the Renewable Heat Incentive (RHI) provide payment for each unit of energy from the systems, such as photovoltaic solar panels, solar thermal and heat pumps, helping to payback the costs of the equipment.  These incentives can over time exceed the installation costs hence providing an income to the community. A good example of this, is the installation of solar thermal panels on the roof (or grounds) of a community swimming pool. The panels generate hot water for use in the pool and showers. Less heating fuel is then needed thus lowering the running costs of the pool. The income from the RHI helps add to the financial stability of the community asset.

Managing Energy use

The final element of community energy engagement is the adoption of new smart energy supply metering and energy demand equipment. This is the most innovative of the elements of the government strategy, as the technology to enable it is still in its infancy. The aim is to reduce the peak of energy demand the UK generally experiences in the evening by delaying the use of the non-essential equipment to a later period.  The benefits to the UK is that we no longer have to provide expensive energy generation capacity and supply infrastructure for these very short times of very high demand. An example of smart meters in action might be a house with a smart meter installed that works in conjunction with smart appliance, such as a washing machine. The smart meter is connected to the grid supply network and can identify times of high demand across the energy network. The householder sets off the smart-washing machine once they return from work in the evening. The washing machine does not start until it receives information from the household smart meter that there is lower demand across the country, for example, after 11pm. This works the same way as a delay timer but is very much more integrated to the energy supply across the network. This smart grid technology requires quite significant upgrade to the energy supply system and hence its best chance of success is where it is adopted across a local area. Community Energy groups can help educate the local community on the benefits and individuals can benefit by managing their demand. In the future there may be  time-of-use energy tariffs, where energy use can be charged at lower prices at times of low demand on the grid (like an advanced version of Economy 7). Adopters of smart meters will be the first to benefit from this cost saving opportunity.

For more information on community energy projects, renewable energy training and renewable energy system design and financial incentives, contact our community energy lead on 07572 531716 or email us on