Agenda item

Lucy Padfield, Energy Services Manager, presented an introductory briefing paper on Community Energy which included the following points:

·        Community Energy had emerged relatively recently as a catch-all for a broad range of energy projects and schemes which benefited and involved the community. A community could be an individual school, housing estate or ward, or group of people with a similar interest.

·        In the Department of Energy and Climate Change’s (DECC) Community Energy Strategy, community energy was defined as “community projects or initiatives focused on the four strands of reducing energy use, managing energy better, generating energy or purchasing energy. This included communities of place and communities of interest. These projects or initiatives shared an emphasis on community ownership, leadership or control where the community benefited. It referred to all activities encompassed by the above definition and also considered shared ownership or joint ventures where benefits were shared by the community. This included activities based on formal community ownership models such as co-operatives, social enterprises, community charities, development trusts and community interest companies, as well as projects without these formal structures.”

·        Community energy projects often focused on social outcomes such as community cohesion, reducing fuel poverty and re-investment of profits, as well as an interest in sustainability. Schemes to date tended to depend on volunteers and relied heavily on gaining broad support within a local community for their activities. Many groups were set up as co-operatives, community interest companies and charities or trusts. Community energy was largely focused on renewable electricity generation, especially solar photovoltaics (PVs) and onshore wind.

·        Community energy schemes normally sought to use their profits to fund programmes to address local social needs through energy efficiency funds or similar. They also often sought to support local jobs and training in the green economy.

·        The council had previously carried out specific Community Engagement programmes and learning from these had flagged up a number of possible relevant groups including the Better Archway Forum and the Islington Environment Forum. The council’s Energy Service Team was not aware of any approaches from any community groups in Islington for support for community energy schemes to date.

·        In Islington, the national Solar Schools initiative was being tested following an approach for help by an Islington primary school interested in participating in a crowd-funded scheme to install solar PV panels on the school roof.

·        Roles local authorities could play included providing funding and/or assets e.g. roofs for installations.

·        A number of potential delivery options were outlined as follows:

Council options –

1)     Council investment – all council-owned roofs

If the council installed PV panels on all council owned housing and corporate buildings it would cost in the region of £38m for a 12 year return on investment. The council would save through bill savings and would receive income from the government’s Feed-in Tariff (FIT). It could be argued that council-led schemes were not community energy schemes. If all the homes in the council’s stock were able to be directly supplied by the panels then each household would save around £40 per year on their electricity bills, assuming all the power generated could be used instantaneously and that all homes could be physically connected. Generally schemes on social housing were connected in to the landlord supply.

2)     “Rent a Roof” PV schemes

The council did not necessarily have to invest funds as there were several offers for “free” rent a roof PV schemes where the installer received the Feed-In Tariff and installed the panels at no charge to the council. The council would then benefit from reduced price electricity. This could be incorporated into Housing’s re-roofing programme.

3)     Community Energy options –

Community Energy was a fast changing environment with regular developments. Current activity included:

1.     Social Inclusion focussed schemes. Repowering (Brixton and Hackney) was an example of a PV Local Share Offer in relation to Social Housing – Social Housing scheme whereby PV was installed on housing stock for £40,000 and residents were engaged. Residents could not benefit from the generated electricity directly. The capital cost for the PV was raised through a share offer. Much of the funding was raised beyond the local area and across the UK. A PV Local Share Offer in relation to Housing/Schools was Gen community (backed by British Gas).

2.     Schemes to help address fuel poverty. Cornwall, Kirklees and Camden had revolving loan funds for energy efficiency measures which were re-invested in further energy efficiency measures. This required a large initial investment, however the benefit to addressing fuel poverty was likely to be the greatest.

3.     Schemes to support community groups. Bristol and Plymouth had seed funds to start community schemes. These required a large initial investment. Bath and North East Somerset Council had a Cooperation Agreement with Bath and North East Somerset Council to help deliver their carbon reduction targets. Bulk buy schemes could be used by communities working together to get a discount on energy efficiency measures by buying in bulk. These would only benefit those who were able to invest in energy efficiency measures.

4.     Other options. OVOs were Virtual Energy Companies. A local authority could use OVO’s energy supply licence to offer a unique tariff for local renewable generation. There was a risk that the tariff would not be the cheapest on the market. Nottingham intended to buy an existing Energy Services Company (ESCo) which already had a licence to retail to the domestic market and sell the electricity generated by their waste incinerator. Nottingham County Council had committed £1million to the procurement and expected to spend many more millions to progress the project. Cambridge planned to deliver a programme of energy saving building retrofits in Council buildings (including schools) through support and loans. Bristol intended for its ESCo to be self-funding after initial set up costs and intended to provide a revenue stream for the city focusing on solar, district heating and retrofit. There was a large investment and time requirement. Lancashire County Council was trialling investing their pension fund in large scale community energy.

·        Islington’s Energy Services Team monitored work taking place across the UK.

·        The Committee could consider the outcomes it wanted to achieve e.g. social inclusion, energy saving, community engagement or employment opportunities, in order to decide on the most appropriate approach.

·        Islington did have plans for a wide scale project on roofs but the Feed-In Tariff changed and made the project unachievable. There were now 20 small schemes on low rise blocks. Council schemes were not classed as community energy and therefore the energy could go into the landlord’s supply which could result in a decrease in service charges.

·        In the repowering model, most investors were not local and investors had to be paid back. The alternative to crowd funding was council funding. Oxford City Council, Nottingham, Plymouth, Bath and Bristol all had community energy projects.

·        Merton Council was considering a PV scheme on the roofs of schools whereby the council would install the PV panels and take the tariff and would have a contract with the schools so the schools benefited too.

·        Islington’s Energy Services Team monitored work taking place across the UK.

Fiona Booth, Head of Community Energy, Department of Energy and Climate Change (DECC) gave a presentation on the DECC’s Community Energy and why local authorities should get involved. In the presentation and discussion the following points were made:

·        The Community Energy Strategy was launched on 27 January 2014. It was the UK’s first ever Community Energy Strategy. It aimed to enable anyone who wanted to get involved with generation, managing, purchasing or reducing energy to do so.

·        Key announcements for this year included a £10m Urban Community Energy Fund, a One Stop Shop and a Community Energy Saving Competition for community group schemes. There was no limit to the number community groups in a borough which could receive funding. It was anticipated that the One Stop Shop would simplify and improve the information available to community groups.

·        Local authorities played an important part in the delivery of community energy. Local authorities had skills, knowledge, trust and could broker partnerships. They could help to support their local communities to identify opportunities to save and generate energy.

·        Community energy comprised projects or initiatives focused on the four strands of reducing, managing, generating or purchasing energy. This included communities of place and communities of interest. There was an emphasis on community ownership, leadership or control where the community benefitted.

·        Lambeth Council had funded a community energy officer for a two year programme to increase energy resilience and security. Although the council provided the funding for the officer, the scheme was not a council run scheme. It collaborated with a not for profit organisation called Repowering London. There were three community-owned solar projects on social housing estates in Brixton and this was the first inner city scheme of its kind. £180,000 had been raised from the local community and there was a £50,000 community fund. 10 apprenticeships had been set up for young people from estates.

·        There were many different models for community energy.

·        It was not possible for schemes e.g. solar projects to directly provide energy for the residents of the buildings due to the significant costs of obtaining a licence. Instead the energy fed into the national grid and money would be given through the Feed-In Tariff. This was not the case with non-domestic buildings which were dealt with under different regulations.

RESOLVED:

1)     That the SID be agreed subject to the following additions:

·        The first objective of the review be amended to read, “To understand the benefits and risks available to Islington of the different community energy models”.

·        Nottingham, Plymouth and Bath be added to the list of potential visits.

2)     That the evidence be noted.