Speech

Speech to Powering Up!

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Edward Davey speaks at the Powering Up! conference for local authorities and community energy groups.

Introduction

It’s great to be here with you today.

And I want to start by re-iterating the Government’s commitment – my personal commitment – to the community energy endeavour we have embarked on.

You know the shape of the huge energy challenge we face.

Making sure that our energy future is secure and affordable for our people as we transition to a climate-friendly low-carbon economy.

This has to be an all of society effort.

New technology, international agreements and Government regulation can take us part of the way.

Big projects like nuclear power stations and offshore wind farms may grab the headlines.

But we will not succeed in bringing our people with us, unless we provide them with a stake in their own energy future.

And that is what the Community Energy Strategy the Government published in January is all about.

Working together

Together, working through partnerships, like OxFutures here today, we have set out to change the way people approach their energy use.

No longer passive consumers, but, as part of their community, engaging actively in hosting and generating energy, saving energy together, and even buying energy collectively.

Local people making human scale changes to how their homes and communities are heated and powered.

Bringing people together is not always easy to do. And getting it right is going to be an organic process.

And while it is vital we learn and share approaches that overcome common problems, we will need to make sure the framework remains flexible, because what is right for one community will not always work for another.

We need to be able to change policy and regulate if necessary, and we also need the wisdom to recognise that local communities are best placed to identify opportunities to save energy and generate energy in their own backyards.

What will and what won’t work for them.

And Local Authorities can often know best who to work with, who to get onside to get projects off the ground, and how to engage the people in the area.

And they have embedded skills – energy managers, regeneration experts, finance and legal experts.

The task we face in decarbonising the UK means central Government and Local Government and their communities working together – each playing to its strengths

But we’re not just talking about local authorities as enablers - there is a much larger role up for grabs here as genuine delivery partners.

Local Authorities have access to financial streams and can better direct investment to maximise local impact.

Many have already grasped this opportunity - Oxford City Council’s decision to loan £2.3m to the OxFutures Community Fund should be applauded and I want to see more councils take up the challenge.

Learning together

So how do we build on the Community Energy Strategy and make sure the framework is right and we have all the instruments and levers we need.

By testing and learning and sharing experience.

We need to ensure the right kind of support, training and advice is in place.

That the planning process supports communities to develop well judged energy projects, and is easily navigable.

That we make access to finance as easy as possible, bringing investors together with community energy partnerships for mutual benefit.

That is why I’m so grateful for the work of the Community Energy working groups, and you have heard from the chairs this morning.

So I want to say a personal thank you to Barbara, Hugh, Sarah and Simon, and all those who have given their time, to help us get off on the best foot possible.

We have now received the reports and recommendations of the groups and will be working through them over the next few months.

We expect to formally respond to recommendations by the end of the year, but that does not means we will be standing still in the meantime.

I won’t be able to go into great detail today, but we are already identifying quick wins and immediate actions we can take to keep momentum in the process – and to keep improving the framework.

So let me concentrate first on some of our successes before turning to how we can improve.

Progress

This is an exciting and dynamic time for community energy.

Momentum has been building steadily over the last few years, led by many of the pioneering examples we have heard from this morning

OxFutures themselves looking to bring in £20m of investment in local energy projects over the next year or so.

The £2.3m loan facility I’ve mentioned should help the Low Carbon Hub work with 20 local schools to install solar panels working with local businesses to develop the supply chain.

In Swansea the council is leading a project to install solar systems in social housing which will help the fuel poor, create jobs and cut emissions at the same time.

In Bath, the council and Bath & West Community Energy are collaborating to put in place a range of local solar, wind and hydro projects.

In London, Lambeth Council is partnering with Repowering London, raising money from local investors to rejuvenate social housing estates with renewable, home grown energy, providing training and work experience for local young people in some of the poorest areas of the city.

Repowering are also mentoring Hackney Energy as part of the DECC/Cabinet Office’s £500,000 Peer Mentoring Scheme.

In Dumfries and Galloway, the council have a target of reducing emissions by a fifth by 2020 through community renewables and retro-fitting projects.

I am particularly pleased that reducing fuel poverty, and focussing on hard to treat homes, is the driving force behind many local schemes.

Local action with a social conscience, that also plays its part in a global solution.

It is clear that communities can be hotbeds of ideas and innovation.

And to focus the minds of local people on what they can do to take control of their own energy future.

Saving energy together, which is why we have committed £100,000 to a community energy saving competition.

Buying energy together – switching their suppliers through local collective switching to save money on their bills.

Local switching collectives have the potential to reach many of the people who have never switched and are therefore on higher tariffs.

If your friends and neighbours have signed up, it’s more of a spur to action.

But increasingly local communities are seeing the value of hosting energy generation and generating energy themselves.

Our shared strategy sees the potential for community projects to supply enough electricity for up to 1 million homes by 2020 and make significant contributions to reducing energy bills and fuel poverty.

Our strategy also sets out a series of new and ambitious measures to help realise this potential and support the sector to scale up.

We are already working with the sector and the wider industry to drive this package forward.

For example, one of the key aims of the Strategy is to see greater community involvement and ownership of local commercial renewable energy projects.

This has the potential to be truly transformational. It will give communities the opportunity to have a real stake and sense of ownership in projects happening on their doorstep and galvanise support for renewables across the country.

The taskforce I appointed to lead this process is making excellent progress. It has consulted on a draft framework to guide the offer of shared ownership to communities. I am looking forward to their final report next month.

We are also taking forward important work on Local Supply. Our aim is to better understand the problems community groups face and work on solutions, including Licence Lite, to make it easier for them to supply and sell their own locally generated energy.

I’m also pleased to say DECC are about to appoint a fund administrator of the £10million Urban Community Energy Fund. It will be up and running in the coming months, helping projects to get off the ground.

This complements the £15million Rural Community Energy Fund, which has had over 60 applications since last June and has already distributed over £500,000 to community groups. This is helping to unlock renewable local energy and heat generating potential and secure a legacy of community benefits for years to come.

We’re seeing rural communities really engaging in community heat projects, including biomass heat networks and water source heat pumps. The Forestry Commission, supported by DECC, are preparing to publish online advice for communities interested in making an initial assessment of local assessing their biomass resources and managing local woods for the production of woodfuel.

I also launched a high level water source heat map in August designed to raise awareness of this untapped potential among local authorities, community groups and private developers.

I believe one community group has been successful in securing funding for a water source heat pump project and hope that this map, and the more detailed one we are aiming to produce this winter, will encourage more to consider this technology as an option.

And all this is kick-starting action elsewhere.

In March, the Greater London Authority became the first organisation to put out an Invitation to Tender for Licence Lite.

In April, Ovo launched their new community energy tariff.

In May, the Chancellors budget reconfirmed the tax breaks for community energy schemes.

In June, Community Energy England was launched to match the associations already set up in Scotland and Wales.

And the Association for Public Service Excellence launched their service for local councils who want to get involved in supporting community energy projects.

Action

And now we have the community energy Working Group reports we can expect another burst of activity over the coming months.

We intend to have our full action plan in place by March next year, but we are already acting on the recommendations

The Planning Working Group recommended training and resources packages for community groups and elected members of planning committees.

So we are talking to our colleagues at DCLG, the Planning Advisory Service and the LGA to see how demand for such resources can be met.

And we will make sure that advice on the planning process is a key focus of the One Stop Shop information resource we are working with Community Energy England and the wider sector to develop.

We are also working with the Planning Inspectorate to ensure all 250 inspectors are fully up to speed on the Community Energy Strategy.

On Hydro, we will make sure that the review of the Feed-In Tariff scheme next year could look at ways to adapt the scheme to support more community development.

And now we have received European approval for the Green Investment Bank to support small-scale wind and hydro power, the scope for the Bank to finance community owned energy projects is expanding.

On the recommendations of the Grid Working Group, we are already engaging with Ofgem and the Distribution Network Operators in order to quantify what the benefits and costs of the more transformational proposals will be.

I am clear that if we are to engage local people, we have to make sure the benefits outweigh any upfront costs.

The last thing I want to see is significant negative impacts on consumer bills.

And of course the Community Energy Finance Roundtable Report has made a series of proposals that we are now considering.

This includes ways in which we can help communities to ensure their projects are bankable, that they access the right professional support early in the development process.

And how we can work with others to ensure high standards of investor protection are established and maintained, which is so critical to the growth of this sector.

We are working with the Treasury to explore how existing and new tax relief can best work for communities – for instance by extending ISA status to debt instruments issued by community energy organisations.

We are also working with the FCA to fully understand the impact of their changes to energy co-ops.

Conclusion

So there is a lot of work underway and a lot more to do.

What really sets community projects apart in my mind, is their ability to deliver a much wider set of positive outcomes for society – from opportunities to create new jobs and learn new skills, to simply getting people working together for a common purpose.

But this is not to overlook the focus of our energy challenge – creating a bottom up low carbon economy that saves energy, and generates energy in new ways – so we can cut the emissions that are harming our planet.

How we act now will determine the quality of our local environments for generations to come.

So let’s use this opportunity, now and over the next few months, to really grasp the community energy challenge.

A sound policy framework that empowers people.

Flexibility to take advantage of innovation on the ground.

Access to advice, support and financing.

And a clear and unambiguous message that people can come together, can make a change, can make a difference and can take control.