Disclaimer: In keeping with the freestyle spirit of blogs, these are personal views and don't necessarily represent official Co-operative Energy policy.
Ramsay Dunning, General Manager of Co-operative Energy explains how the new User Chooser initiative is giving consumers the chance to choose their own energy mix and how this innovation builds on a proud heritage of democracy and social responsibility.
When we launched Co-operative Energy in 2011 we said that we would give our customers a real voice in how we are run. We also pledged to play a major part in tackling climate change. Today, we are delivering on those promises as never before with a major new innovation – User Chooser.
Put simply, our customers will be the first in the country (perhaps even the world) to be able to control the exact energy mix of the electricity they buy – be that the energy source utilised or even the local generator who feeds into the supply chain.
Survey after survey shows that trust in UK energy markets is broken. People want an alternative to the Big Six energy suppliers and hundreds of thousands are now switching to new, independent companies such as Co-operative Energy. It goes without saying that they value openness, honesty and fair-pricing. But, a sizeable number also have a deep interest in the provenance of their energy supply – much as they want to know where the food they eat comes from, or how the clothes they wear are made. Sound sourcing and customer engagement are fertile territory for co-operatives: think of the major advances made by the movement around everything from Fairtrade food to FSC-certified timber over recent decades. User Chooser is a natural continuation of this history of ethical innovation.
User Chooser is open to all Co-operative Energy customers and comes at no additional cost. Put simply, customers visit our new Energy Hub website, register and then choose the generation type they prefer (i.e., hydro, solar, wind, gas, coal and nuclear) and, if relevant, the specific generation site to be utilised (e.g., wind farms in Cumbria and Cambridgeshire, hydro-electric scheme at Whitby Esk and Neen Sollars or solar installations in Somerset and Gloucester). In response, Co-operative Energy will buy enough units from each source to match these choices, with the process independently audited. Power purchase agreements are currently in place with around 30 generators, 15 of which involve community groups – so there’s lots to choose from at day one.
We anticipate that community energy projects will be real winners of User Chooser – allowing customers, as never before, to support generation in their locality. Add this to our progressive public policy intervention and support for initiatives such as Community Energy Fortnight, and it’s fair to say that Co-operative Energy has now firmly established itself as one of the most important deliverers of citizen-backed, low carbon energy in the UK.
As a member-owned and controlled business, customer engagement perhaps comes more naturally to us than others. Our User Chooser scheme builds on our proud heritage of democracy and social responsibility, but we won’t be resting on our laurels. User Chooser is just the first of a number of products we will be rolling out on our new Energy Hub in the coming months and years – so get ready for even more Power to the People.
Ramsay Dunning, General Manager, Co-operative Energy @RamsayDunning
We’re feeling very proud at Sharenergy as next week sees the launch of Scotland’s first wholly co-operatively owned wind turbine. Dingwall Wind Co-op will be hosting a launch party on Saturday 12 July for the 175 members of the co-op. It seems incredible that in 2014 this will be the first Scottish wind turbine in full co-operative ownership, given that Scotland is close to getting 50% of its electricity through renewables – most of it from wind.
In recent months we’ve seen a surge in interest from landowners in going down the community owned route rather than pursuing a wind project alone. Very often they’ve done the hard part themselves in securing planning permission and grid connection agreements. We’re helping them open up the opportunity for their local community to share the benefits the turbine will bring. The resulting co-ops are good value for landowners and locals alike – we can keep most of the money generated in the local economy.
Our latest such project to come to share offer is Wester Derry Wind Co-op, in Glen Isla near Perth. It’s another 250kW turbine using the same ultra-reliable WTN turbine used at Dingwall. Planning permission has been granted, the grid connection paid for, the Feed in Tariff fixed at the current rate, HMRC approval for tax relief granted – and we’ve now put in a firm order so the turbine is being made in Germany as we speak. The total the group need to raise is £800,000, with good projected returns. It’s a rather sparsely populated area so the co-op welcomes members from further afield, in Scotland or the wider UK – see http://www.westerderrywind.org.uk for details.
Not all our work starts with landowners of course – most of our projects are led by community volunteers wanting to put their town on the map. We’re really keen on co-operative principle 6: co-ops help other co-ops and in the small market town of Leominster, in Herefordshire, we’re seeing that in action. A new primary school is being built and will be ready for the start of the 2014/2015 school year, complete with a 90kW solar array owned by Leominster Sunrise Co-operative. The new co-operative has been supported by development funds from Leominster Community Solar, whose 50kW solar array on the local leisure centre was one of the first solar co-ops in the UK. The new panels on the school will save around 720 tonnes of carbon dioxide and save the school at least £2500 on their energy bills. The Leominster Sunrise share offer is now live – see http://www.leominstersunrise.org.uk
Energy Minister Ed Davey recently wrote to schools encouraging them to put solar on their roofs, but how many schools will have the time, capacity or skills, let alone the finance to make this happen? We’re keen to get the word out to head teachers that the co-operative model could help them to deliver this without distracting them from their already busy task of running the school. In fact we think a solar co-op can help attract wider support for the school – it’s certainly a new way to engage parents and grandparents in the fabric and future of the school. Above all we hope school-based co-ops will inspire a new solar generation, brought up with renewable energy technologies and enjoying all the benefits that co-operative ownership can unlock for the local community.
The world needs to find $1,000 billion a year of clean energy investment if we are to have any chance of avoiding runaway climate change. Last year, just $254 billion of finance was found globally – which is less than flowed in 2012 and down a fifth on 2011’s record $318 billion of investment. Europe in particular is seeing a fall-off in finance: in 2013, investment in clean energy slumped by 41% to $58 billion.
The UK was one of the more positive areas of Europe last year, with investment falling just 8% from 2012’s record figure of $14.3billion. But then the UK is well behind most European countries when it comes to renewable energy. We derive just 4% of our energy from renewables, lagging behind Sweden (51%), Austria (32%), Denmark (26%), Italy (14%), France (13%) and Germany (12%). In fact, the only two nations we better are Luxembourg and Malta.
The UK needs to tap new sources of clean energy finance to move things forward at an accelerated rate. It can’t rely on the Big Six energy providers or mainstream banking establishment to drive change – they are far too wedded to their large fossil fuel assets. Pensions and investment funds will be increasingly important in the future, but in many countries a combination of community energy generation and crowdfunding has been a key additional part of the answer.
A quarter of Germany’s electricity is from renewables, and one reason for this is that nearly half of its renewable energy capacity is owned by individuals, community groups and private developers. Between them, tens of billions of euros have been leveraged to produce a community energy revolution. In Denmark, 30% of power consumption was from renewables in 2013 (at some days more than a 100% of demand was covered, with the excess being exported) – with a contributing factor being the requirement for wind developers to offer at least 25% of a project to local investors. In the United States, the country’s largest solar power provider has predicted that crowdfunding will provide rooftop solar projects with $5 billion of investment within five years.
A recent publication from ResPublica, ‘Community Energy: Unlocking Finance and Investment’, which is supported by Co-operative Energy, sets out how crowdfunding could help realise a community energy revolution here in the UK.
Co-operative Energy has been supportive of community energy and crowdfunding since its inception in May 2011. We currently have power purchase agreements in place with six community energy groups; and enjoy productive strategic relations with innovative crowdfunders such as Abundance Generation and successful community developers such as The Resilience Centre. However, there is insufficient community energy in the UK to meet our needs – never mind other suppliers who may wish to support community energy.
The ‘Unlocking Finance’ report calls on the Treasury and the financial services regulator to offer further support to crowdfunding platforms. The Financial Conduct Authority needs to move beyond its narrow focus on risk protection and play a much greater role in facilitating a diverse financial sector. Regulation should allow smaller and more innovative crowdfunding and peer-to-peer initiatives to thrive, not hold them back. There also needs to be greater incentives to encourage more people to invest. The newly introduced Social Investment Tax Relief (SITR) should be opened up to a wider range of community businesses. In parallel, Enterprise Investment Scheme (EIS) reliefs that were dropped in the small print of this year’s budget need to be reinstated for community energy schemes. Tax-free saving via ISAs should also be extended to include the debt-based securities that are offered by peer-to-peer lenders.
Earlier this year, the UK Government launched a highly welcome Community Energy Strategy. However, this does little to address how finance will be encouraged to flow – a critical point when major banks are failing to lend to community energy businesses in this country. The UK needs a strategy for unlocking the billions sitting in the bank accounts of the large majority of the population who support renewable energy. Crowdfunding could be the turbo-boost that is needed to finally bring ‘Power to the People’.
Ramsay Dunning, General Manager, Co-operative Energy
In February, Midcounties Co-operative, the UK’s largest independent co-operative and parent co-operative of Co-operative Energy, became one of the first UK businesses to be accredited by the new Fair Tax Mark, the world’s first independent accreditation scheme to address the issue of responsible tax.
As part of Midcounties Co-operative, Co-operative Energy also became the first energy supplier to receive the Fair Tax Mark accreditation. As a responsible customer-owned organisation, Fair Tax Mark accreditation is a reflection of our commitment to the whole UK economy and is in line with responsibilities towards the customers and communities we serve and the environment.
This is an accreditation which we are proud to have been awarded and as a leading energy supplier we believe that all other energy suppliers should show the same level of commitment to their customers by following our lead.
The accreditation of the Fair Tax Mark pioneer companies comes at a time when recent polling from the Institute for Business Ethics has found that corporate tax avoidance is now the number one concern of the public when it comes to business conduct. The energy industry has also been embroiled, with the tax practices of some Big Six energy providers being called in to question. In May last year, npower felt the heat of a mass consumer boycott after thousands of its gas and electricity customers said they planned to switch supplier to protest at its tax affairs. It was revealed that npower had paid almost no corporation tax between 2009 and 2011.
In recent months, global firms such as Google, Starbucks, and Amazon have come under fire for allegedly avoiding paying tax on their British sales. With the start of a new tax year just days away – the 2013-14 tax year ends on 5 April – transparency on tax is a key issue at Co-operative Energy , as we are founded on putting customers first and ensuring that they get the fairest deal possible.
The Fair Tax Mark has been developed by a team of tax justice campaigners and tax experts, and shows that a company is making a genuine effort to be open and transparent about its tax affairs and pays the right amount of corporation tax at the right time and in the right place.
Co-operative Energy was launched with a pledge to be fair and transparent and to challenge the Big Six to stamp out sharp practices. To be the first energy company in the UK to receive the Fair Tax Mark accreditation demonstrates our commitment to customers that we’re committed to reforming the industry and that we are a socially responsible energy business, paying our fair share of tax and investing in the UK economy.
Gen Community, is a community benefit society, which creates social impact through community energy projects. We operate throughout the UK but design and operate our projects to create maximum local benefit.
As part of an innovative relationship with Southern Staffordshire Community Energy (SSCE), we have developed a share offer (Staffordshire Sunny Schools) to fund the UK’s largest community solar schools project. With a total capacity of 1MWp the project will see 25 schools benefitting from solar PV, forecasted to save over £1.8m in electricity bills. The scheme will enable the schools to redistribute the savings to further improve facilities and children’s learning experiences. At a time when public services are still feeling the fallout from the budget cuts over the last few years this project clearly shows how local and wider communities can work together to support and improve public facilities.
In addition, the project has wider educational aims to fit in with the school curriculum, which is being delivered through a curriculum approved education package – Sunny Schools. The Sunny Schools program gives teachers the tools to engage children across a range of subjects around climate change, renewable energy and sustainability. The initiative will have a lasting impact on the children’s lives and the wider community, as they grew up in an increasingly energy fragile society.
The project generates a community fund, distributed through SSCE. One of the aims is to train the premises managers of the schools semi-annually on energy efficiencies, awareness and behaviours. The community fund will also finance the deployment of the solar learning tool, synced with on site generation, and enable other community energy initiatives to be supported. The schools are incentivised to export as much solar generated power as possible, as this increases the community fund. When the power is exported to Co-operative Energy – the FiT license supplier to the schools – mutual ownership of energy generation and supply is a very strong message of energy independence Gen Community are keen to support. Gen Community is also working closely with SSCE in developing a second local authority project. Co-operation across communities is one of the most powerful and useful tools we have and I look forward to seeing many more community assets being developed across the UK as we help tackle our underfunded infrastructure and social services.
The project is being funded through a community share offer, which closes on the 30th April 2014 and has received £200,000 loan through Pureleapfrog, the low carbon investment charity. The minimum threshold has been reached but the offer is still open. An independent review of the project can be found on Ethex – the not for profit investment platform. Returns forecasted at 6.9% IRR (EIS approved – 10.48% IRR).
Cold Homes Week starts this week and climaxes on Friday. The campaign has been created by The Energy Bill Revolution, an alliance of charities, environmental groups, consumer groups, trade unions, businesses, politicians and public figures. Co-operative Energy is a supporter of the alliance and has been challenging the practices of the ‘Big Six’ and championing the rights of the consumer since it launched in 2011.
Co-operative Energy, which joined the Energy Bill Revolution in April 2013, was the first energy supplier to actually introduce a price cut in its energy prices for two successive years and most recently rolled back its planned price increase to 2.5 per cent. After the Government announced its intention to removed social obligations on bills, Co-operative Energy had already removed ECO costs last November. Co-operative Energy then challenged all other suppliers to follow its lead and pass on the saving and where they’ve implemented price rises, provide customers with a rebate.
Co-operative Energy was also the first energy provider to offer customers tailored payment arrangements, helping pensioners and the 3.5 million British workers who receive their income on a fortnightly or four weekly basis. This allows customers to choose to pay their bills either every four weeks, making 13 monthly payments across the year, or fortnightly, making 26 payments across the year, as opposed to the standard 12 monthly payments offered by other energy companies. Last year three fixed tariffs were also introduced to help customers looking to bring down their energy bills safeguard their expenditure in some cases for the next four winters if they so wish.
All the supporters of The Energy Bill Revolution have teamed up this year to help raise awareness of the issues surrounding fuel poverty, and to gain the support of politicians to help make UK homes more energy efficient.
The campaign’s key elements are a big tweet and e-alert on Monday 3 Feb, calling for petition signatories. The campaign twitter hashtag to follow all developments is #coldhomesweek. Key members will also join a debate in parliament, host public meetings and call on the nation to get knitting scarves. The scarves will be presented in a parliamentary reception, along with pictures of the public wearing scarves and images of scarf adorned statues. A symbolic art installation is also planned for Westminster, and an online ‘counting the cost’ calculator has been developed. This calculator allows users to type in their postcode to find out if their local MP is supporting the campaign and find out how many inefficient homes there are in their area.
With the counting the cost element in mind we have compiled a list of simple but helpful tips to help make your home more efficient:
- Draught proofing – undoubtedly one of the easiest and most affordable DIY jobs to save money in your home. Head to your nearest retailer for the best solutions.
- Insulate – Insulation will keep your home warmer for longer. Loft insulation is a quick fix that will not only take under a day to complete, but it can save you up to £180 per year on your home heating bills.
- Double glazing – upgrading your windows can dramatically cut your heat loss and could save you around £170 a year on heating bills. To get a better idea of how much you could save by replacing your windows, use this Energy Saving Calculator.
- Upgrade your boiler – boilers account for 55% of your energy bills, so it’s important you have an efficient one. Upgrading to an A-rated high-efficiency condensing boiler could save you £310 a year.
- Bleed your radiators – if your radiator feels cold at the top and warm at the bottom it is likely it has trapped air in it that needs releasing. Bleeding your radiator is very easy, simply open the small valve on your radiator and allow the excess air to escape. Make sure your heating is off, you have a towel at the ready for any leakages and you wear protective gloves.
For more information visit: www.energybillrevolution.org/cold-homes-week/
Ramsay Dunning, general manager of Co-operative Energy discusses why there is a need for an impartial, not-for-profit regulated comparison website and the ongoing campaign to provide this service for customers who are being kept in the dark over commission charges.
As a member owned business – with no shareholders – we felt it only right to champion the push for an independent information and comparison service. A free to use service which customers know will present all the available tariffs and supporting information to let them make an informed decision on which energy supplier to use. Energy comparison sites are currently unregulated and as such, we believe, are not always operating in the best interests of consumers.
Customers have a right to be able to compare energy tariffs and currently some sites operating are not being transparent in their dealings and are deliberately directing customers only to commission generating tariffs. This is yet another example of the lack of transparency which energy consumers are exposed to.
Many of the switching sites present themselves as a service, when in reality they are profit maximising sales organisations, leading customers by default to the tariffs that pay commission.
There are claims by comparison sites that their service is free to use. But we know it is the customer that ultimately ends up paying for this commission as it is added to their energy bill. Removal of this commission based-structure entirely can only be good news for customers as it would lead to a drop in energy bills.
We know that not all comparison sites are the same but what we are saying is that consumers must be adept at navigating the sites effectively in order to see all the tariffs available. Many ask leading questions which act as a channel for sharing the deals which ensure a commission for the site. This is misleading as there may be a deal available that the site does not have a commission arrangement with, but would be better suited to the customers’ energy needs. The customer could easily sign up for this deal directly via the suppliers own website. The prices being quoted are exactly the same as the price a customer would pay if they went to the energy supplier direct.
Some of the methodology the switching sites use for calculating annual savings is questionable. Lots of assumptions are made which do not always put the customer first. For example, sites often assume that when a product ends, the customer will rollover to a variable rate which has a higher unit cost attached. This results in some customers being sold a product which is not always the best and most suitable deal available
Another area of concern is that the cost to acquire via the switching sites is greater than the total profit gained by the supplier who manages the total risk. Under Ofgem rules, it is important that the end bill is cost reflective and the customer is paying a fair price.
The comparison sites claim they only charge a small admin fee when in reality what they charge is a sales commission. Even describing the commission as an admin fee is misleading consumers as it infers only a small charge.
As energy suppliers we are legally bound by confidentiality clauses, which take both parties to agree disclosure. I give permission for disclosure, therefore releasing those switching sites with whom we are contracted from confidentiality. If they refuse to disclose how much we pay that is their choice, there are no legal restrictions.
There is no questioning the convenience factor comparison sites provide. How many of us have the time to research multiple websites looking to get the best deal whether it is for a new energy, insurance or mobile phone contract?
In our ongoing crusade to bring transparency to a sector that has become increasingly confusing, Co-operative Energy will continue to campaign hard to protect the customer by calling for the creation of an impartial not-for-profit information and comparison site, which is properly regulated by OFGEM or the Government. In the interest of helping to bring down energy bills further and operating a fair and transparent energy market, this is what consumers need.
You’ve already crashed and burned on the New Year’s resolutions, the miserable weather and dark days are getting you down, work is a real struggle after the Christmas break and financially, it feels like the end of the month can’t come soon enough.
Today is ‘Blue Monday’ officially the most miserable day and Co-operative Energy has outlined a series of simple steps which can not only see you through to the end of the month but help you to make significant changes which will benefit you from this point onwards.
First of all don’t let everything get on top you, January can be a long, hard and depressing month for many but it’s also a great time to reconsider your finances and start afresh for the year ahead. You’ll feel in great shape after tackling any money matters and updating your budget to free up some much needed cash after Christmas.
At Co-operative Energy we believe that carrying out a simple ‘life laundry’ can help you to get to grips with many of the financial hardships that have such an impact in January.
Hopefully the following steps will help put a smile back on your face before the month is out….
Step 1 – Get to grips with your household budget
Take a look at your budget and write down all incoming cash and essential outgoing payments. Then decide which unnecessary costs you can cut out (like magazines, unused cable or satellite entertainment packages or meals out) and see how much you could save. There are ‘cutback calculators’ available online which can help you to do this and put a framework in place https://www.moneyadviceservice.org.uk/en/tools/cut-back-calculator
If you can put any savings you make aside, these will soon mount up and could be put towards a holiday fund or in preparation for any emergency or unexpected expenses later down the line.
Look at your bank statements too. Are there any mystery direct debits such as the gym membership you signed up for last January, used for a month and then forgot about completely? If so – cancel it for immediate savings.
Step 2 – Shop around and compare
Now it’s time to consider where more significant savings can be made such as on household bills – gas and electricity or phone and broadband. It is likely that there are better deals available so it can really pay off to spend some time shopping around – there are plenty of comparison sites to get you started.
Why not put aside half a day at the weekend to tackle the finances or even some time in the evening on Blue Monday itself! The savings can amount to hundreds of pounds and it really isn’t as daunting as it would appear once you put your mind to it. It’s also worth considering helping older relatives or friends to do the same – they might not have the equipment such as laptops, tablets and smartphones that can help to make the whole process so much easier.
Begin with the biggest bills, for example, energy – look at some of the short and long term fixed deals out there. Co-operative Energy offers a very competitive one, two and three year tariff which means you can safeguard your energy prices for up to four winters and maybe even save some money by switching in the first place!
Record numbers of households switched energy provider at the end of last year, after the ‘big six’ firms announced inflation-busting price increases
An estimated 150,000 families left the big six energy suppliers altogether in protest at spiralling prices, and turned to one of the smaller alternatives. Many will have saved hundreds of pounds by switching to a cheaper tariff.
Just last week the new Which? annual energy survey revealed that the big six had scored the lowest overall customer score among energy companies serving Great Britain proving that it’s not all about price. Good customer service is of paramount importance to consumers. http://consumerinsight.which.co.uk/
Once you’ve sorted out your outgoings and household bills – aim bigger! If your mortgage deal ends soon check out what other deals might be available. The same applies to insurance policies – when renewing don’t just stay with the same policy provider shop around to see if you can save more money.
Step 3 – Keep on top of things
After you’ve done all that all you need to do is to keep it up. Think about all areas of expenditure where you can make potential savings and plan for the year ahead. Keep your own priorities in mind, whether it’s a pension, a family holiday or a new car. Use apps and online tools to help you stay financially fit – they will help you to keep track and remain in the driving seat.
These three simple steps will provide peace of mind helping you to kick Blue Monday into touch and giving you the motivation to make a great start to 2014.
It’s that time of year again. As we start 2014, plenty of people are starting to think about things they want to change with their lives. Losing weight is usually top of the agenda for New Year’s Resolutions, but what about saving money and while we’re at it, the planet? From heating our houses to doing the laundry, we use energy in our homes every day. It is essential that we reduce our energy consumption if we’re to prevent further climate change and keep our purse strings intact.
So in that spirit, here are a few energy-saving resolutions to consider for the New Year:
Upgrade your boiler – If your current boiler is more than ten years old, upgrading to a modern condensing model could easily slash your heating bills and emissions by a third.
Draught proof gaps – If you have poorly sealed windows and doors you may be losing a significant amount of heat through the gaps. Draught proofing is a simple inexpensive DIY measure and by saving warm air you’ll use less energy to heat your home.
Double glazing -Old single glazed windows can often be a major source of heat loss, so if you have them in your home, or even if you have broken or leaky double glazing it’s well worth considering modern energy-efficient replacements.
Time for a new thermostat – The latest thermostats are really clever, they can now learn how to program themselves based on your usage habits.
Replace old bulbs – Still using the old-school light bulbs? Switch them to energy saving light bulbs, you’ll save oodles on your bills.
Think – It may sound a little tired but it’s very important to remember that when you’re not in a room, you really should turn off your appliances to save energy. If you have children, ask them to follow this too.
Every big name brand seems to have a ‘community’ programme these days. From supermarkets supporting local community initiatives to developers desperately trying to get their heads around ‘community engagement’ the word community is everywhere, including in the Government’s Big Society ethos which is soon to produce a community energy strategy for the UK.
The prizes for making community energy projects mainstream are significant. ResPublica has recently estimated that more than 17% of onshore renewable capacity could be community generated in the UK, and with Germany already boasting 15%, the stakes are high. The big question, however, is whether this revolution can be achieved by communities working alone or whether a collaboration is needed. ResPublica’s figures are certainly predicated on a proportion of joint ventures between industry and community, and even the most ambitious groups would acknowledge the need for a corporate balance sheet when tackling larger projects. So how do businesses ingratiate themselves to the communities that are currently blocking their development aspirations and how do community groups harness the power of corporate infrastructure without losing their ethos….? At the recent Community Energy Conference run by Co-op Energy a number of workshop groups were asked to ponder these questions. The rooms were split, but a number of key themes emerged during the day:
Debunking the warm and fuzzy myth
Community groups were quick to break down the distinction between a business and a community group. ‘Community energy projects are businesses, and if they forget that they will fail’ was the simple conclusion of most groups. The fact that community energy projects face just as many challenges as any business but with none of the infrastructure of their corporate counterparts is often forgotten. However it is certainly an element of pride – and true grit – amongst community practitioners. If you want to be in the community energy business you have to be tough!
When is a business not a business?
Having established that a community project has to operate as a business the groups then acknowledged that there are significant differences between an incorporated community energy project and a traditional ‘company’. The most significant of these is the reason that each type of organisation exists in the first place. Businesses exist to make money, any business textbook will tell you that. There are ethical businesses and cut-throat businesses, but anything a business does needs to be tied back to its core purpose, and that will always be to make money. On the other hand the core purpose of community energy organisation is producing community benefit. In a nutshell, a commercial organisation will engage communities in their pursuit of profit (although ’tis often not as mercenary as that sounds) whilst a community group will seek a profit in order to deliver benefit to its community – a big difference!
Can we ever get along?
Does this make commercial businesses and community projects incompatible? The jury is soundly split on this matter. On one hand, those that see community energy as a market revolution, a way of bringing ownership and control of the energy system back into the hands of the consumer, warn against of the risk of losing your soul to the corporate machine. On the other hand, those that just want to maximize the uptake of renewable technologies take the view that it doesn’t matter who builds it as long as it gets built. It boils down to whether you see community energy as an essential element in the move to a decarbonized economy; some would argue that without community engagement and ownership we just won’t get there.
The common foe (or the best friend ever)
There was general consensus that Local Authorities and the regulatory bodies were often the bigger hurdle for an energy project, regardless of whether you are a community group or a corporate. Community groups tended to believe that corporates are better placed to do battle as they have the resources and balance sheet needed. This does raise the bigger issue of the role of Government in enabling as well as regulating the various energy markets. Certainly, having a supportive Local Authority makes all the difference in making projects a reality.
To partner or plagiarize?
Whatever they believed, the groups were in agreement that they lacked many resources that their commercial counterparts take for granted, but the specific debate was whether this necessitated partnership or just a more effective way of bringing these resources in house. The two points of consensus were that:
- It will be a while before the vast majority of community groups have the balance sheet necessary to take on the risk and financial commitment necessary for a large scale project (multi-MW)
- Not every community group will want (or be able) to start a fully-fledged community energy company.
There was tentative agreement that the level of collaboration with industry might just be down to the appetite and capacity of the specific community.
So what’s the wish list?
When considering a corporate partner community groups would put these at the top of
- Finance – the ability to leverage a balance sheet and take on the risk of a larger project
- Expertise and resource – community groups are reliant on volunteer support and lack the ‘back office’ that a corporate partner would take for granted.
- Influence – there was consensus that a ‘brand’ wields power and can influence on a level that a community group cannot
- Access to projects – the biggest challenge for an established group is often finding the next project to tackle.
In return a community group can offer a partner the trusted relationship with a local community this is generally unattainable otherwise.
At what cost?
Trust and control are the two big words for community – will these ever be truly compatible with profit? On one level they must be because a community project that doesn’t make a profit will not be around for long. There will always be a tension between profit and local benefit, and there is a communication gap that needs to be filled if lasting partnerships between the community and commercial sector are to be forged. Community groups are nothing if not pragmatic, however, and there is a an acknowledgement that the desired revolution is not going to happen at the pace and scale that everyone aspires to without finding some common ground. For community groups this means working out where collaboration becomes a compromise too far, and for commercial players it means working out how to buy communities in rather than buying them off. What is absolutely clear is that both sides need to evolve in order to take advantage of the significant opportunity presented by community energy in the UK.
Clare Hierons, COO, Pure Leapfrog