Community energy, what is it and why do we need it?
There is a growing interest in Community Energy, purchase across the country and within Liverpool City Region. Two recent publications demonstrate this. First the Liverpool City Region Local Enterprise Partnership (LEP) published an excellent booklet called Community Energy for Liverpool City Region. In the Foreword, case Amanda Lyme lays out an ambition for Liverpool to be self-sufficient in energy within 20 years and reveals the passion within the LEP for supporting community led activity.
Next The Report of the Mayor of Liverpool’s Commission on Environmental Sustainability was published. In section 2.1 called for “an integrated and sustainable energy strategy for Liverpool . . .” the aim of which should be for Liverpool to become self-sufficient and carbon neutral, see but also to maximise the economic benefits associated with this transition. This led nicely to section 2.2 which recommended the Mayor explore options for a municipal or city-wide energy company.
These grand dreams reminded me of a book “Liverpool- City of the Sea”, published what seems like an age ago in the pre Capital of Culture days. The author, Tony Lane, discusses how Liverpool has changed so dramatically that it must totally re-invent itself, without drawing on its past, and that a line must be drawn under the past, before the future can be re-imagined. I see 2008 as that process of drawing a line, and these ideas are part of the re-imaging of the future of Liverpool a future that “can only be Green”. However, Lane warns that before this re-imaging can take place there has to be a “glacially sharp understanding of present realities”. I decided to set out to put some meat on the bones of the skeleton laid out by the two excellent publications and explore their implications.
As someone who is active within the Community Energy sector, as a Director of Liverpool Community Renewables I want to explain our views of what community energy is, why we think Liverpool needs it, what examples there are of it working in other countries and the UK. I will do this in two parts and in the next piece I will discuss ways we get to where we need to go.
What is community energy?
Community energy for us means the shift away from centralised, transnational corporate ownership of the production and distribution of energy.
It is the transition from a fossil fuel based energy system to one of distributed energy generation created from renewable sources- solar photo-voltaic (PV), solar thermal, heat pumps, wind turbines (off-shore and on), biomass, wave and tidal power.
For a project or organisation to describe itself as being part of the community energy sector, it must have certain characteristics.
- it must be owned or democratically accountable to the community in which they operate- ideally both
- it must re-invest any surplus they generate from their activities back into the community they serve – either helping to reduce energy use or developing more renewable energy capacity
- there should not be any barriers to members of the community participating in the projects and the active participation of community members should be encouraged
- their activities must bring tangible benefits to the community in which they operate; reducing energy demand or cheaper energy tariffs
- it must deliver a financial return to investors
With community ownership of our energy systems the money circulated from the activities of generating, supplying and saving energy are captured and retained in the locality.
So for us at LCR and the sector in general, green, sustainable renewable energy and community ownership and/or democratic accountability are the key ingredients. Scenarios of a 100% community owned coal, fired power-station or an energy system that was 100% owned by big business would both only be partial successes.
Why do we need it or want it?
Energy is now a central environmental, social and economic issue and is too important to leave to the market
Our current energy market is not working in the interests of ordinary people. Nor is it capable of facing up to the main challenges of the 21st century.
The energy sector accounts for 4% of GDP and is controlled by the “big six”, who supply 99% of all households with energy and own 71% of total electricity generating capacity. Of these six companies only two are British owned and headquartered in the UK, meaning most of our energy system is owned by foreign transnational corporations.
This current dispensation is failing us as a society now, and as we look to face the challenges of the future. Wholesale energy prices are volatile and dependence on imports from unstable regions is growing. Since 2005 gas prices have risen 120%, electricity prices by 75%. Fuel Poverty is accepted as a normal part business as usual and is increasing as prices increase. In 2009, 23% of households in Liverpool City Region were in fuel poverty.
Co? emissions have barely fallen in EU despite the Kyoto Protocol, Copenhagen Accord and all the targets, money and regulation that has been thrown at the problem.
As prices rise the perception that the “big six” are profiteering, passing on rises in wholesale gas prices to customers, but not the falls, has led to declining trust in the industry. In 2009 in a consumer focus survey in consumer confidence, the gas and electricity market came bottom out of 45 markets (this was after the financial crash of 2008!). A 2014 study found only 32% of Britons trust energy companies, making it the least trusted sector behind banking and the media (this was post phone-hacking scandal!!).
The current market is a blockage because the lack of trust of the consumers, mean they are not capable of leading this transition (despite being entrusted to do so by recent governments.) The transition to distributed, renewable energy is at odds with their business model, as they sell energy by the kilo-Watt-hour for profit, and we can only rely on renewables if we massively reduce energy consumption.
The amount of investment needed to fund this transition is enormous and the “big six” do not have strong enough balance sheets to cover it, even if they wanted to. The market value of Europe’s twenty biggest utilities have halved in the last 6 years and their credit ratings have been down-graded. Even the government and the Department of Energy and Climate Change acknowledge this.
And that’s a shame because we really, really need to decarbonise our energy system pretty quickly because of the greatest threat we have faced as a global civilisation, Climate Change.
It is almost certain that using fossil fuels changes the climate. Most carbon dioxide emission come from burning fossil fuels and the main reason we burn fossil fuels is for energy.Just to be clear, agriculture contributed ? of GHG emissions in 2000, energy contributed ¾. The climate change problem is principally an energy problem.
In Copenhagen 2009- one of the only things accomplished was the consensus that global warming needed to be limited to 2?C, 167 countries signed up. To avoid a 2?C rise in global temperatures requires a massive reduction in global Co2 emissions.
There are lots of targets. The IPCC reckons 80% by 2050, the UK government passed the Climate Change Act, legislating a legally binding 80% cut in UK GHG emissions by 2050. Even Liverpool has a 35% reduction target by 2024.However if we subscribe to the only socially just way of dealing with the co2 emission problem, which means contraction and convergence. That would mean that by 2050 everyone on the earth will have the same per capita Co? emission allowance, 1 tonne per year. For a country like the UK that means a more than 85% Co2 reduction, such a deep cut that the best way to think about it is to just go for net zero carbon emissions.
Failure for us to act now will have catastrophic consequences for our children and grand-children. Temperature increases of 3?C would melt the Greenland ice-cap over the course of a few hundred years and raise sea levels by 7 meters. There is a widespread acceptance that an increase of 4?C is incompatible with an organised global community.
However Co? emissions have risen since Copenhagen at the rate of around 3% a year.
Luckily the good people at the centre for Alternative Technology have plan! Zero Carbon Britain is based on what is physically possible, rather than politically or socially possible as things stand. In brief they have crunched the numbers and they say we can rapidly decarbonise our society, energy system, agriculture, transport, and maintain a decent standard of living, not living in a cave eating bugs of the wall, using the technology we currently have. For this to stack up does require a massive reduction in energy demand, 60%, but the remaining demand can be met 100% by renewables, using technology we have available now.
It is physically, scientifically and technically possible, it is up to us to make it socially and politically possible.
Progress towards reducing C?2 emissions and switching to renewables has been made in other countries. In Denmark coops and local ownership are a big part of their wind industry. In 2009 15% of their wind turbines were still cooperatively owned. Renewable energy production is 20% of Germanys entire electricity output.
The city of Munich plans to supply the whole municipality, 1 million people with renewable electricity by 2025! The US has a long history of rural and municipal energy coops and not-for-profits. The Los Angeles Department of Water and Power is a publically owned utility that delivers water and electricity to 3.8 million residents.
In this country there are good examples of pioneers who have developed the energy coops model, Brixton Energy Coops, Bath and West Community Energy, Ovesco, Bristol Energy Coop, Brighton Energy Coop.
Renewable energy can provide all the UKs energy needs, if we reduce consumption by 60%, but it will take a few decades to achieve and there will be substantial transitional costs.
The EU estimates 1trillion Euro needs to be invested in Europe`s energy systems by 2020 if we are to meet our climate change and energy security goals, 20/20/20 (20% energy reduction, 20% energy produced from renewables by 2020). Community groups and social enterprises are not going to be able to make the huge changes necessary on their own. Central Government needs to change the regulatory framework to assist the development and growth of the community energy sector and local government also needs to play a role in facilitating this process. In the next piece I will look in more detail at how we can develop a locally owned energy co-operative for Liverpool and the city region.
In the meantime become a member of Liverpool Community Renewables. Our Pioneer Share Offer is open until the 15th May!
Ed Gommon- Director, Liverpool Community Renewables
 E.ON, EDF, British Gas-Centrica, Scottish and Southern (SSE), Scottish Power (Iberdrola), RWE Npower