£10m community energy fund could be expanded after Spending Review


The Government has confirmed that further financial support for community energy projects, such as the continuation and expansion of the £10m Rural Community Energy Fund, is to be considered as part of this year’s Spending Review.

The Spending Review determines how much is spent on public services.

Within his response to a letter from the Environmental Audit Committee proposing ways to enhance community energy projects across the UK, Business Secretary Kwasi Kwarteng also explained that a specific strategy on community energy was unlikely.

However, he did explain that the Net Zero Strategy, expected for publication later this year, will set out the Government’s plans for community energy.

The Business Secretary also confirmed that upon review of Ofgem’s Smart Export Guarantee report, the Government will consider whether small-scale generators can effectively sell electricity back to the grid.

The Committee has raised concerns that current regulatory and grid connectivity barriers are ‘stalling’ progress in the further roll-out of community energy projects.

Environmental Audit Committee Chairman, Philip Dunne MP, commented: “Community energy schemes literally put the power to make a green transition into a community’s hands.

“There are innovative projects up and down the country – in my own constituency I supported a scheme in Ludlow five years ago where a hydroelectric turbine in the River Teme is generating enough energy to power local homes and sell the excess to the grid.

“But due to current regulatory barriers, new community projects are struggling to sell energy to their local communities making them financially unviable.

“The Government’s response to the points the Committee has made gives some hope that community energy is being considered as part of the Government’s wider net zero plans.

“This is welcome, particularly as it was ignored as part of the Energy White Paper.

“We look forward to seeing the detail in the Net Zero Strategy when it is published.

“In the meantime, we encourage the Secretary of State to develop an ambitious proposal for further community energy funding in his submission to the forthcoming Spending Review.”

The full letter can be read on the UK Parliament website.