Community energy projects involve groups of people coming together to purchase, manage, generate, or reduce consumption of energy. This includes solar panels, wind farms, hydropower, rural heat networks, electric vehicle charging points and fuel poverty alleviation schemes. Programmes are usually not-for-profit, and profits raised from projects are reinvested back into the communities in which they power.
Community energy projects can play a vital role in reducing carbon emissions and empowering local areas to benefit from low-carbon heat and electricity. Community energy can create jobs and investment but also importantly, engages with communities in the transition to a new energy system. These initiatives can deliver real value to communities, and I strongly believe national and local governments must collaborate to ensure no one is left behind in the transition to cleaner energy. To that end, I have been contacted by constituents who are concerned about the lack of clarity from the Labour Government around future funding for these projects.
As the Shadow Secretary of State for Energy, Andrew Bowie MP said in the Great British Energy Bill debate on the 25th March 2025,
‘We have debated this Government’s energy policies on many occasions in the past few months. We have frequently debated the merits, or lack thereof, of Great British Energy, an organisation about which we still know very little—what it is for and what it will do.’
The Community Energy Fund introduced by the previous Conservative Government supported both urban and rural communities to develop local renewable projects. Similarly, the Local Net Zero Accelerator helped local councils attract private investment in green growth. Following the passage of the Energy Act 2023 through Parliament, the previous Government was committed to consulting on the barriers to community energy projects by launching a call to evidence.
In a departure from this, this Government has promised to establish a publicly owned entity called Great British Energy, to encourage investment in local green projects. Building on previous efforts, this Government’s Great British Energy plan includes a Local Power Plan to support community-owned renewable energy, with a target of generating 8GW of power.
However, there are serious questions about whether Great British Energy will produce any energy at all or merely act as a funding vehicle for large companies. More must be done to remove barriers for community energy projects, such as reforming licensing regulations to allow them to sell electricity directly to local customers and addressing the high costs and delays of securing grid connections. Existing schemes, like the Smart Export Guarantee, also need strengthening to provide greater financial certainty.
Planning policies also need to better reflect the benefits of community energy. Recognising these benefits as a material consideration and using Neighbourhood and Local Area Energy Plans to build support could help embed these projects into local priorities. Additionally, the potential for community energy to incentivise demand flexibility must be explored to reduce carbon emissions.
We do now know that the role of Community Energy has been put into the Bill explicitly and that the Government has committed an additional £5 million to the community energy fund, giving it some short-term certainty.
However, Michael Shanks MP, Parliamentary Under-Secretary of State at the Department for Energy Security and Net Zero, speaking for the Government added that,
‘Going forward, those projects will be on the basis of the individual investment propositions put forward. Individual projects in Scotland or in other parts of the UK will therefore apply for funding, they will be considered alongside other investments and those investments will be made.’
I will continue to question whether Great British Energy delivers real results or becomes another costly initiative that fails to deliver on its promises. Communities deserve affordable energy, secure supplies, and tangible benefits from the transition to renewables. I will hold the Government to account and make sure the focus is on cheap bills and secure energy for communities.
The link to the full debate transcript can be found here:
Great British Energy Bill - Hansard - UK Parliament
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