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Communities Hub

What Is Community Energy

In broad terms ‘community energy’ encompasses any energy-related activity that a community group undertakes. Over the last two decades, it has evolved to encompass:
  • Local community groups installing insulation, draft-proofing and small scale renewable energy generation into community buildings to provide heat and /or power to make them more comfortable to use and to lower their energy costs;
  • Assisting or advising local residents on how to reduce energy costs;
  • Local groups developing larger renewable energy generation projects such as hydroelectricity generators or windfarms, to generate revenue for the community;
  • Local groups leading or engaging in partnerships with local authorities and energy & technology companies to take forward new approaches to local renewable energy supply and energy reduction.

Community energy projects are, by definition, developed by a community in or near that community’s location. However, there are examples of projects which have been led by private interests but which have provided an opportunity for local communities to ‘buy in’ to the project, as well as examples of projects developed by co-operatives, where a site or sites have been identified and shareholders from across the UK (or further afield) have been invited to invest.

There are also examples of projects led by local community groups but where a proportion of the finance has been provided through a wider share offer, typically taking the form of a ‘Community Benefit Society’, where shareholders may receive the equivalent of bank interest on their shares. ‘Local financing’ in this ways helps to keep money in the local economy.


There is also one example of a project in its early stages where a group of 10 communities are working together to take forward a large-scale wind farm development.

Many community energy projects have been taken forward by volunteers, either under the auspices of an established community body (like a development trust or community hall committee) or via a newly established specific-purpose group. Careful thought needs to be given to the legal structure of a community energy group to ensure that it is fit for purpose.


Advice and Support

In Scotland, there is a specific Scottish Government scheme designed to support community energy development called the Community and Renewable Energy Scheme. In England, the Rural Community Energy Fund provides funding support for feasibility and project development activities. If you are in Wales, the Welsh Government's Local Energy Service offers financial and technical support to help social enterprises develop their own renewable energy schemes.



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