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Case study from Shared Assets: Community Renewable Energy

Author: Shared Assets
Published Date: 10 March 2014

Shared Assets is conducting a research project looking at social innovation, how it scales and how it retains or grows its social impact. Below it looks in more detail at the history of the Development Trust movement.

As part of the research Shared Assets is using five social innovations as case studies. They are: development trusts, community food enterprises, community HIV health services, community energy enterprises and community recycling programmes. This fourth case study tacles the history of community led renewable energy generation.

For more information about Shared Assets work on social innovation have a look at their website.

Community renewable energy generation enterprises are renewable energy generation projects that are partly or solely owned by the communities where the project is located. Currently, in England, solar thermal projects are the most common (40%), with wind, biomass and solar electricity all tied in second place (17% each). [1]

The number of community energy enterprises is increasing rapidly. In 2007, over 500 community renewable energy projects were identified (79% less than 5 years old). [2] By 2013, it was estimated that 5,000 community energy groups had been active since 2008. [3] Commonly expressed community group motivations for these enterprises include reducing energy bills, reducing carbon emissions, promoting local energy independence and community empowerment. [4]

Though this sector is experiencing rapid growth, community energy enterprises lack the infrastructure to deliver the energy they have created, relying instead on selling to the private sector through the Feed-in Tariff (FiT) scheme[5] So while community energy enterprises may lower energy prices and carbon emissions for their owner- communities, and potentially generate surpluses for community benefit, they will not serve to challenge the hegemony of the ‘Big Six’ private sector energy companies. [6]

As with community food enterprises (see case study 2), the manner in which the sector scales may depend largely on the ultimate goals of stakeholders. So far, ‘demand-side pull’ [7] from community groups wishing to generate their own renewable power has fuelled growth in the sector by ‘uncontrolled diffusion’[8](community groups adopting and modifying approaches taken elsewhere). However, ‘supply-side push’ [9], such as investment in local infrastructure (like creating local heat networks) would be necessary to seriously challenge hegemony of the private sector. [10] The publication in January of the Government’s Community Energy Strategy seems to indicate some ‘push’ is on its way, though it remains to be seen exactly what impact it will have.

What do you think the ultimate goal of community energy enterprises should be; small-scale local production for community benefit or a radical overhaul of how energy is produced and distributed throughout the country?

[1] Seyfang et al (2013) ‘A Thousand Flowers Blooming? An Examination of Community Energy in the UK’ Energy Policy, 61: 977-989.

[2]Ibid.

[3] Department of Energy and Climate Change (2014) ‘Community Energy Strategy: People Powering Change’https://www.gov.uk/government/publications/community-energy-strategy.

[4] Seyfang et al (2013) ‘A Thousand Flowers Blooming? An Examination of Community Energy in the UK’ Energy Policy, 61: 977-989.

[5] Ofgem ‘Feed-in-Tariff Scheme’ https://www.ofgem.gov.uk/environmental-programmes/feed-tariff-fit-scheme.

[6] Nolden, C. (2013) ‘Governing Community Energy—Feed-in Tariffs and the Development of Community Wind Energy Schemes in the United Kingdom and Germany’ Energy Policy.

[7] Mulgan et al. refer to demand ‘pull’ factors such as: ‘recognition of needs that are not being adequately met’ by social entrepreneurs and campaigners, who then seek to address these needs. We call such actions ‘demand-side pull’ for simplicity.

Mulgan, Geoff et al. (2007). ‘In and Out of Sync: The Challenge of Growing Social Innovations’ NESTA.http://www.nesta.org.uk/sites/default/files/in_and_out_of_sync.pdf.

[8] Mulgan et al. define ‘uncontrolled diffusion’ as: ‘ spread by communication through the media, books, conferences or word of mouth, and through professionals and other networks. Diffusion can be accelerated by self-appointed champions and ambassadors, who may or may not have a link with the original innovators. The less the controlled the diffusion, the more likely it is that the innovation will adapt in different ways according to local conditions.’

Mulgan, Geoff et al. (2007). ‘In and Out of Sync: The Challenge of Growing Social Innovations’ NESTA.http://www.nesta.org.uk/sites/default/files/in_and_out_of_sync.pdf.

[9] Founded in Mulgan et al.’s concept of ‘effective supply’ or ‘push’ factors, we conceptualise ‘supply-side push’ as a mirror of ‘demand-side pull’: social entrepreneurs and campaigners are encouraged by funders and policy-makers to meet needs through a particular innovation.

Mulgan, Geoff et al. (2007). ‘In and Out of Sync: The Challenge of Growing Social Innovations’ NESTA. http://www.nesta.org.uk/sites/default/files/in_and_out_of_sync.pdf.

[10] Walker, Gordon (2008) ‘What are the Barriers and Incentives for Community-Owned Means of Energy Production and Use?’ Energy Policy, 36 (12): 4401-4405.