The Welsh Way Forward – Part 2

Craig Dalzell

Wales risks creeping ahead of Scotland in progressive policy again, if the Welsh Government adopts proposals put forward by the Institute for Welsh Affairs to radically increase the amount of community owned energy in Wales.

Their new paper, Sharing Power, Spreading Wealth, is a comprehensive map of the state of public energy in Wales and identifies just about every angle that we’ve been campaigning for in Scotland (including mention of the role of Ynni Cymru – the new public energy company set up by the Welsh Government based on our Powering Our Ambitions model of a National Energy Company).

The paper, like much of our energy campaigning, identifies profit extraction from energy resources as a major driver of the current cost of living crisis as well as a major barrier against the development of renewable energy around communities (it’s a bit of a hard sell to see your landscape covered in wind and solar generators knowing that your own energy bills keep going up and none of the profits stay similarly within eyeshot) but also identifies that Wales along, with even more limited devolved funding than Scotland has, is unlikely to be able to nationalise the entire sector.

Instead, they look at various models of improving community benefits and look at Scotland for inspiration in much of it (as weak as the current “Community Benefit Fund” model is in Scotland, we do enjoy some more strategic thinking including the pooling of resources across particularly very rural regions. They also point out that a major weakness in the UK regulations on community benefit is that they have been designed exclusively for wind power and we do not see equivalent funding streams for solar power – right now the cheaper and most easily deployable form of electricity generation not just at present but in history. This goes a long way towards explaining why the solar farm currently being proposed for my local area is offering the community an as yet undisclosed community benefit fund but have said that it would certainly be less per MW than if they were building wind turbines.

The point the IWA made that most caught my eye though was their section on community ownership. Under the Community Benefit model, communities are paid a peppercorn rent for energy generators in their area and groups trying to access those funds often find the strings attached to tapping into those funds are pulled too tightly including my own community where renewable funds are perversely undersubscribed but there simply isn’t enough capacity to apply for funding (It’s great if you have an active and engaged Community Council, not so great if you don’t), or the funding can’t be used for the particular project (a classic example being that it’s possible to gets funds to buy a village hall, but not possible to get funds to run that hall), or the amount of money that each fund gives to each project is too small (if you have a £10,000 project but can only apply for £500 from each fund, that creates a huge amount of usually volunteer time and effort to gather the funding).

Under a community ownership model, things are very different. Once a community outright owns their own local energy assets, it becomes much easier to organise ways of ensuring the benefits get into the community. It has been shown that a MW of community owned energy creates around 34 times as much local benefit as a MW of energy delivers through the privatised community benefit funding.

The IWA paper recommends that all new renewable energy projects above 5MW (about the size of a single moderate wind turbine and certainly a bit more than you are likely to install on your roof as solar panels) should contain at least a 15% community owned stake. This is where the ask is significantly above where the Scottish Government currently is. To put it in perspective, if the solar farm I mentioned above had a legally mandated 15% community ownership stake then my village would be entirely self-sufficient in energy generation (even if we replace all of our gas and oil boilers with electric heating) and would have several megawatts of capacity left over to export for local revenue. It would cost the community around £23 million to buy that 15% stake – outwith our personal reach, but well within the capacity for the current Scottish National Investment Bank to help fund with a patient finance loan.

A year ago now, during the SNP leadership campaign, Humza Yousaf competed on energy policy against the other two candidates with a commitment that a hypothetical “ScotWind II” could be 10% public-owned (this was in response to our campaign showing how badly the Scottish Government botched their handling of the first ScotWind auction). He also made commitments around more community energy but without such solid numbers attached. Current government policy is that there should be at least 2GW of energy in community or local ownership (however this includes not just community owned energy projects but also things like solar panels installed on social homes) and an additional 20GW of onshore wind plus 6GW of solar by 2030. The fact that all of these targets are woefully off-track and no longer have a credible delivery routemap aside, if they were achieved it’s obvious that the amount of community energy in Scotland would remain far, far below the 15% target recommended by the IWA.

Let’s not see Scotland, one of the most renewable energy rich regions of Europe, fall behind in delivering for the people who live here. The Scottish Government should read this report and see where parallels can be drawn with Scotland (as the report itself does in looking at Scotland for inspiration in Wales). Redouble communications with the Welsh Government and Welsh energy leaders to see where we can start to catch up. And let’s see a credible strategy that will put community energy at the fore of Scotland’s public energy strategy and permanently free our fuel poor communities from the rampant profit extraction that led to the cost of living crisis while also doing our part to meet our obligations to avert the climate emergency.

Image Credit: IWA

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