General Election 2024

Local energy: a vision to power up communities

Community Energy Wales has three measures we want election candidates to support:

• A levy to fund community development
• A right to trade locally
• Procure community energy

You can download a bilingual PDF version of the detail here. If you are a candidate interested in supporting our community energy pledge, please sign up to our RhanNi network, let us know where you are standing and that you will back our three measures.

If you are one of our member groups, or one of our community energy champions (part of our RhanNi network of community energy supporters), please let us know if you want to contact your local candidates to ask for their support. We can provide template letters for you and social media shares.

Where we are: Energy costs & climate change

People continue to face uncertainty when it comes to energy. The recent price hikes exacerbated by our dependence on fossil fuels and the complex way in which the energy markets work has shown the volatility of our energy bills, pushing 45% of Welsh households into poverty. The IPCC (2021) tells us that effects of climate change are “rapid, widespread and intensifying”. However, if the necessary changes that will come with the push to net zero worsen fuel poverty or ignore communities, then the transition will be fundamentally unjust, raising justified opposition.

Community Energy Wales wants to ensure that decarbonising our energy system and transitioning to net zero is not another means for corporations to make vast profits from our natural resources, giving little or no return or agency (aside from community benefits in some instances) to the communities from which those natural resources are extracted.

Our communities have seen a breakdown in their social fabric over the last half century. The way our communities interact has changed, and the public services within them have deteriorated. Community energy offers a chance to revitalise the community spirit that has held true in Wales for centuries and give it a new purpose.

Welsh communities have been here before. We must learn the lessons from our history. Failure to ensure that the wealth created from coal, slate, copper, and tin was retained in the communities where those industries flourished has left those communities in some of the worst deprivation in Western Europe today.

This is a once in a generation chance to fundamentally change how our society is structured. If we get this right and tackle the climate crisis with community-ownership of energy assets, we can lock in the economic benefit for generations to come.

Our communities do not have to carry on this trajectory of decline. We can change the story.

Community energy - our values

The community energy sector in Wales believes that the values of community energy make for strong, independent communities and a good society.

1. Community energy is more than profit. It is community-building. All profits are reinvested into communities and making them sustainable - economically, socially, environmentally, and culturally.
2. Many community energy groups are cooperatives or social enterprises and work to cooperative values. We work on the basis that cooperation is better than competition.
3. We are building independent, self-confident, and self-sufficient communities so that people can protect the facilities they have during times of public spending cuts. Community ownership prevents the extractive use of Wales’s natural resources.
4. Everyone should be able to afford the energy they need, and we work towards that outcome. Many of our groups contribute practically to helping people manage the cost-of-living crisis.
5. We believe in the power of diversity and are actively seeking ways to engage people from backgrounds not traditionally associated with community energy, especially those who are economically disadvantaged.
6. We buy locally and support circular economies.
7. We were advocating the principles, goals, and ways of working in the Welsh Wellbeing and Future Generations Act (the first of its kind in the world) before the legislation was conceived.
8. We ensure that control over projects is not centralised, and trust communities to do what is best for them locally.

Examples of community energy groups and the values they live by can be found in our state of the sector report state-of-the-sector-2023.pdf (communityenergy.wales)

We believe that these values could benefit more communities and our whole society in a multitude of ways if community energy could be upscaled and accessed by everyone, everywhere.

That means changing the system.

Imagining a people-centered energy system

Imagine an energy system that was designed for the needs of people and planet. Imagine a decentralised, localised network of small energy generators owned by local people, feeding hundreds if not thousands of homes and businesses within every electricity sub-station area.

Imagine energy-efficient buildings, where people were able to be wise about their electricity usage by using data to monitor the generation within their sub-station area. They could consume cheaper energy at times when demand was low and/or when generation levels were high. People could make choices to lower their bills by using energy at these times or pay more to use grid-transmitted electricity during peak or at times of lower generation.

Imagine every citizen part-owning the energy assets that generate what they consume and receiving a return on their investment. And imagine the profits or surpluses from that generation being returned for reinvestment into more community assets, more energy projects or community or environmental improvements.

In contrast to fossil fuels, renewable technology can be decentralised and produced anywhere at any scale – allowing for a completely different way of structuring our energy system. This is an opportunity for our communities to take initiative and control their energy future.

Cheaper local energy linked to locally owned community energy generation would give local citizens a direct interest in their energy. Local energy will cut bills, thereby helping to combat fuel poverty. This, together with the additional benefits that come with community ownership, will, we believe, help to reduce localised opposition to renewable energy developments, enabling more to be built, in turn increasing overall energy system resilience.

A localised or decentralised system like this would take pressure off the overloaded transmission grid, promote the wise use of energy and cut emissions. As community energy is not-for-profit or more-than-profit, a bigger sector would provide more funds for purchasing and developing further community assets, community facilities, green spaces, biodiversity and to contribute towards the building of a community wealth fund - a finance pot for reinvestment into new community and energy projects.

Our asks:

The Community Energy Sector wants to see legislation brought at the earliest opportunity under the new Westminster government to create a legal right to access local energy.

We are asking election candidates to support this legislation and to push for the setting of targets for people to be able to receive a growing percentage of the energy they consume from local generation over time, at a fair local tariff reflecting the savings to grid infrastructure.

Community Energy Public Sector Contracts

To kickstart a local system like this, the community energy sector needs political support to build partnerships with the public sector so that public sector bodies purchase their energy from local community energy providers. This boost in demand will in turn encourage more development of community owned energy assets. Through sleeved Power Purchase Agreements (PPAs), private wire and any other available mechanisms, high energy-using public sector buildings should source as much of their energy use as possible from local sources at sub-station level. This would reduce public sector energy bills and provide an income to community energy groups - because transmission costs would not need to be paid. The reinvestment of profits would create more renewable energy groups, more installations, and more energy. Public sector bodies must be enabled to report 100% renewable energy purchased in this way as carbon free, NOT at grid carbon factor as currently required.

Our asks:

We are asking election candidates to support the setting of targets for publicly procured energy to come from local or community sources, rising over time.

Overcoming Financial Barriers - Building a Community Wealth Fund

There have been numerous barriers standing in the way of the scaling up of community energy and finance has been identified as one of the biggest ones.

Other countries - most notably Norway, have built sovereign wealth funds from their past fossil fuel extraction. This is worth around £225,000 per citizen today.

Taking the same principle, a community wealth fund can be created and sustained through the introduction of a new levy as a ‘rent on natural resources’. Developers using wind, solar, hydro or the seas will pay a levy on their turnover to compensate for the use of the natural resources which land on the territory of Wales. Unlike the Norwegian wealth fund, which is used for general government public expenditure, the Welsh Community Wealth Fund will be ringfenced for reinvestment in energy efficiency measures and new community renewable energy generation.

Community energy - the benefits of ownership for all

The community energy sector was given a boost by the feed-in tariff. This was an incentive for small scale energy generators to sell their energy or surplus energy into the national grid. The feed in tariff ended in 2019. Most community energy businesses currently operating were established during the feed-in tariff period.

Usually through a combination of grants, loans and community share offers, capital has traditionally been raised on the basis that the return would cover the servicing of that capital and make a small profit for reinvestment.

Community shares enable people to be more direct participants in community energy. With shares, people are part-owners. They receive a small annual return on their investment and get voting rights to decide how surpluses are spent.

Despite various excellent schemes from some community energy groups (e.g. purchasing shares on behalf of people on low incomes with their surpluses), most people without the means - including all those in fuel poverty, are unable to participate and purchase shares.

The community energy sector wants everyone who wants to, in all communities, to be able to participate in the community energy movement. We would like to see the Community Wealth Fund support those on low incomes and in fuel poverty to become community share owners.

By enabling more citizens to have the option to own community shares in local projects funded through the community wealth fund, more people can access, participate in, and understand the benefits and democratising power of community ownership of energy.

Our asks:

Community energy wants to see reform to introduce a new, additional “rent on natural resources” for all energy and energy infrastructure developments with the funds raised contributing to a new community wealth fund. This fund will be used to reinvest in more community energy and energy efficiency schemes, including via support for those on low incomes and voluntary groups to become community share owners.

Members and supporters of community energy groups call upon all election candidates to provide practical support for the sector by signing up to our asks and acting upon them if elected.

Community Energy. Our time is now.