An Inclusive Energy System

Are we in danger of confusing community benefit with community energy?

Our latest Community Energy Wales policy tracker contains plenty that is encouraging. Governments in Cardiff and Westminster clearly recognise that communities should benefit from the energy transition.

But reading the policy landscape as a whole, I think there is a deeper problem we need to confront.

Government policy continues to gravitate towards the things that deliver big, visible numbers quickly: megawatts deployed, capital invested, major projects consented and built. And increasingly, the role envisaged for communities is to participate in those projects through community benefits, shared ownership or investment opportunities.

There is nothing inherently wrong with any of that. CEW has argued strongly for communities to receive a fair share of the value created by energy development.

But community participation in someone else's energy project is not the same thing as community energy.

The bigger prize is an energy system in which communities themselves have meaningful ownership of assets, agency and the capability to shape how energy is generated, used, traded and valued locally. We have articulated that as ‘Energy Communities’.

Losing sight of the distinction creates a genuine risk.

The energy transition is a once-in-a-generation opportunity to democratise part of the economy, distribute ownership much more widely and keep substantially more economic value circulating within local communities.

But there is a systems argument too. A more decentralised, community-led energy system has the potential to change how we use energy: matching local generation and demand, enabling flexibility, storage and smarter consumption, reducing pressure on networks and potentially avoiding some of the costs which otherwise end up socialised through bills and standing charges.

If we simply build a greener version of the existing centralised system, while treating communities principally as recipients of benefits from large projects, we risk missing those opportunities. And the consequences could be with us for decades: unnecessarily high system costs, persistent high energy prices and communities continuing to export both energy and economic value.

Existing and traditional community energy funding continues to be frustrated by well-known obstacles. Community energy organisations are still describing structural barriers around routes to market, procurement, development capital and access to the wider energy system. The answer cannot simply be another competitive funding programme layered on top of those barriers. We urgently need a market structured to support energy communities: Funding can then be a matter of seed investments leading to independent success, rather than a long-term structural dependency.

Time is running out for government in both Cardiff and Westminster to recognise what only genuine grassroots community energy can do, and to design the energy transition accordingly.

Because we have one extraordinary opportunity to get this right.

The question isn't simply how communities can benefit from the energy system we're building. It's whether we are prepared to build an energy system in which communities genuinely own assets, exercise agency and share in the wealth they help create.