George Osborne is trying to destroy community energy

The public, business and politicians agree Government should be doing all it can to support community energy.

Clive Lewis MP

Clive Lewis is a Shadow Minister for Energy and Climate Change


With the UK still topping European league tables for fuel poverty and the UN Paris climate talks just around the corner, we desperately need an energy system that is cleaner, smarter and fairer than the one we currently have.

Britain’s 20th century experiment with an energy system dominated by a handful of big centralised energy giants is failing on all fronts – plunging millions of us into a cold, unreliable energy future that is destroying the planet. As corporate profits rise and chronic underinvestment continues, we now face a winter with the slimmest electricity supply margin
in decades.

Compare this to the UK’s burgeoning community energy movement and the contrast couldn’t be greater. An exciting grassroots antidote to the market failure of the ‘Big Six’, citizens everywhere from the Isle of Egg to Plymouth have been clubbing together to do something amazing and provide power for themselves.

Community energy is an approach fit for the 21st century with co-operative values at its heart. One very different from the monopolistic model of energy provision we currently rely on in the main. A system reliant on privatised profits and socialised costs (in other words profits for a few at the cost of our collective environment and the most vulnerable customers stuck paying
over the odds).

Crucially, it’s part of the move to open up the energy market to give communities across the country a stake in their own energy production. This offers the chance to keep the benefits and profits local, growing skills, jobs, and offering the public a tangible ways to take action on climate change. Nationalisation vs privatisation is a battle of yesteryear. Instead Labour wants to do something far more radical – it wants to democratise our energy.

Sounds good doesn’t it? That’s why a broad cross section of public, business and politicians agree Government should be doing all it can to nurture this approach. Unfortunately George Osborne didn’t seem to get the memo.

A short while ago the Treasury attempted to slip in damaging changes to legislation that would result in crucial tax-breaks for community energy being scrapped.

Up until now local investors in such schemes benefited from tax relief that recognised the risky, marginal nature of such start-ups. It’s known as the Enterprise Investment Scheme or EIS. As an incentive it has been central to the financial viability of numerous renewable energy co-ops, freeing up extra resources to plough back into local community benefit funds. At the same time Social Investment Tax Relief (SITR) is also being axed specifically for community energy schemes. The irony is SITR was initiated, after a Government back-track on EIS earlier this year, to help with the smooth transition of community energy from EIS.

Labour & Co-operative MP Anna Turley demands answers from Energy Secretary Amber Rudd

But with the cut-off date looming (Nov 30th) schemes from Edinburgh to Exeter face everything from an uncertain future to wrack and ruin. Many projects will be torpedoed as a simple consequence of the constant, debilitating uncertainty caused by a recent battery of abrupt Government policy changes. Larger players like Mongoose Energy say the changes jeopardise more than a £100m of community energy investment. Smaller co-ops like Repower Balcombe and Abingdon Hydro have been forced to abandon their energy schemes altogether.

The tax incentives were an inherent part of this nascent sector’s business model, freeing up extra resources for their community benefit funds (in effect off-setting any social cost of energy generation by investing the benefit fund into the local community, theoretically on anything from skate-parks to university scholarships). Across the British Isles, hundreds of thousands of volunteer hours could now come to nothing if the Government does not rethink this move.

The only excuse for the broken promise and policy U-turn is a vague reference to ‘abuse’, for which no evidence has yet been given.

This puts the UK’s community energy movement into uncharted waters. Many may not survive the next twelve months. All this at the same time the fossil fuel industry continue to enjoy their own tax-breaks and subsidies.

The Government now admits it will likely miss its legally binding renewable energy targets by 2020. That make this decision on community energy and the others recently affecting renewables all the more baffling and unforgiveable.