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Are Community Groups and Businesses Compatible?

Posted on 17 December 2013

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
the list:

  • 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

 

 

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