Community energy projects – that is, energy infrastructure owned in whole or in part by local communities and run for their benefit – have seen something of a rise in Britain in recent years. According to Community Energy England, the group that represents the sector, there are currently 583 community energy organizations operating in Britain, managing a combined renewable energy capacity of 398 MW. Last year, these groups generated 617 GWh of electricity, enough to power approximately 228,530 households.
In short, community energy functions as follows: members of a community invest in renewable energy generation projects and receive interest on their investment from the money the energy cooperative earns by selling the power these resources generate. The money made from the sale of this power is also typically spent on projects that benefit local people, often funding environmental initiatives such as boosting the energy efficiency of community buildings.
Although some community energy groups have been around for a decade or more, the idea is only now gaining traction in Britain, but it is commonplace in much of Europe. The EU has around 9,000 community energy projects in its member states, and a recent study in the journal Nature showed that engagement in citizen-led energy projects in Europe is at an all-time high.
Bristol Energy Cooperative is perhaps one of the most successful in the UK community energy group. Founded in 2011, the group manages 13.4 MW of installed power generation capacity, of which 12 MW comes from solar installations across 15 rooftop projects and two ground-mounted solar farms. Following major installations at Bristol Beacon – one of the city’s largest music venues – and a new share offering at Triodos Bank, the co-op aims to continue to expand and strengthen the profile of community energy.
Solar energy portal spoke to Andy O’Brien, co-founder and development director of Bristol Energy Cooperative, to see what the rise of community energy means for Bristol and the UK as a whole.
The word “community” has some interesting connotations – for many it may conjure up images of something small-scale, DIY or unprofessional, but as O’Brien explains, community energy operations go through many of the same processes as larger projects. scale producers do.
“It’s not like we’re going to put a ladder against a community building and just carry solar panels,” O’Brien begins. “We use professional installers, we don’t do it ourselves, and we use professional companies to maintain those systems. . We have to be as professional as any other commercial renewable energy developer, because it is crucial that if we want people to invest in us, and we want everything to be safe, we have to get it right.”
Bristol Energy Cooperative, for its part, has been hugely successful in getting people to invest in it; The group has raised £15 million since its inception to fund its clean energy projects, which have generated enough income to raise £400,000 for the community.
According to O’Brien, running a community energy group and maintaining its successful momentum over the long term is not as different from running a traditional commercial energy business as people might think. “We are commercially driven in developing sustainable energy programs, in the same way that commercial developers are.”
“We’re competing with them to some extent, and we have to find the financing to develop those sites and then actually build them out. Then we have to maintain them and hire people to operate, maintain and manage the assets – all the same as what a traditional renewable energy developer would do.”
The F-word: financing
Another area where community energy groups operate in a remarkably similar way to their counterparts in the commercial energy sector is financing. Both rely on debt and equity financing, and both need to monitor their highs and lows. According to Community Energy England’s 2024 State of the industry According to the report, UK community energy groups saw a turnover of £43.2m in 2023, with these groups attracting £24m in investment the same year.
Bristol Energy Cooperative is no stranger to the major financial sector, having launched its tenth community share offering in May this year. The co-op has partnered for the first time with ethical bank Triodos Bank and is seeking to raise £1m to increase its solar portfolio by 1MW.
Those who choose to invest in Bristol Energy Cooperative through this equity offering will receive interest each year depending on the cooperative’s performance; the target interest rate is 6% per year.
O’Brien provided an update on this share raise, stating that it is currently around £300,000, with several months to go before closing. Although austerity measures and the cost of living crisis are limiting the potential pool of investors, optimism about this offering remains. However, O’Brien notes that impact investors (those who pursue social returns over financial returns) are critical to achieving the expansion goals the co-op hopes to achieve.
In the traditional commercial renewable energy sector, pension funds are among the leading investors, and their contributions to clean energy are expected to soar; Research by AlphaReal earlier this year showed that 95% of pension funds expect to increase their investments in renewable energy sources over the next five years. Pension funds could also play an important role in the future of the community energy sector, O’Brien argues, and it could be exactly what is needed to give the sector its next big boost.
“The entire sector needs to get to that point where pension funds will also invest in community energy, as will other organizations that would consider themselves impact investors – not looking for financial returns but looking for social returns,” says O’Brien, adding that “these sector is absolutely perfect to get started with.”
Power to the people – local
It has not escaped the attention of the community energy sector and the wider public that much of our energy infrastructure is owned by international companies. Although estimates vary, some indicate that almost half of the UK’s offshore wind capacity is owned by foreign entities, and that many of Britain’s major solar projects or planned developments – including the recently approved Mallard Pass 350MW solar -energy project – owned or partially owned. by international companies.
Community energy represents the opposite of this: hyper-local, community-controlled energy infrastructure where everyone has a say. O’Brien notes that at a time when private water companies, railroads and other infrastructure managers have driven prices up and quality down, many people are looking for this, calling local ownership “such a hot topic right now.”
Crucially, Bristol Energy Cooperative, like most community energy organisations, puts the income from their projects back into local community projects. For O’Brien, this is the most valuable part of community energy. “We are here to provide a benefit to the community; it was fantastic to see how some of the groups we helped finance went on to set up their own energy projects.”
