Communities in England will be able to create their own power stations following the launch of a £10m fund by the UK’s Department of Energy and Climate Change (Decc).

The Urban Community Energy Fund will give community groups in England the opportunity to bid for grants of up to £20,000, or loans of up to £130,000 to help kick-start their projects. Scotland and Wales have their own community energy schemes.

Community groups will be able to reap the benefits of renewable energy by creating ‘power hubs’ in their area. Installing solar panels on local buildings or factories or building an anaerobic digestion plant to create energy from local waste can save whole communities money.

In East Sussex, beer is now being made using the sun’s rays after the country’s first ever community energy scheme installed solar panels on Harvey’s Brewery. The brewery benefits from lower energy bills, while the community benefits from money back under the Feed in Tariff.

Announcing the new fund at the brewery, energy and climate change secretary Ed Davey said: “I want to give more people the power to generate their own electricity and by supporting community energy projects we can - helping them drive down their energy bills at the same time. This is all about investing in renewable energy sources, creating jobs and changing the way renewable energy is developed in the UK.”

Changes to Feed-in Tariff scheme support

The community energy sector will also see its first major shake-up since the launch of the Community Energy Strategy in January this year. Community electricity projects will now get further support under the Feed in Tariff Scheme – which pays the owners of small-scale renewable generation for the electricity they produce - to get their community energy projects off the ground.

Changes to the FiT scheme include:

  • For the first time, registered charities will be entitled to the same benefits as other community groups.
  • Two community projects (or one community project and one commercial project), each up to 5MW, will now be able to share a single grid connection and receive separate Feed in Tariffs.
  • The FIT will now be guaranteed for an extra six months – giving communities more time to get their project up and running.

Kathy Smyth, policy director of Community Energy England, said the changes would be a great boost to projects using the split ownership model under the voluntary protocol for Shared Community Ownership, which Ed Davey launched earlier this month.

In addition to the changes, a Register of Community Benefits and Engagement for onshore wind projects has been launched to help other communities to get the most out of proposed wind developments in their area.