Are community energy projects more than just a pipe dream?

The SNP does not want to govern Britain. However, it may have a major impact on the policy of the next government. With some (although somewhat questionable) polls predicting a hung parliament, Sir Keir Starmer could count on SNP votes for a majority. So what would the SNP want in return?

Apart from the obvious (another independence referendum, which Labor has said it will not accept), the SNP has long prioritized renewable energy. A particular favorite is community energy projects – these are environmental programs created, financed and owned (or partially owned) by communities themselves. This aligns with many Labor views (Ed Miliband mentioned something similar).

What’s the plan?

SNP proposes a package of measures: “soft” grants and loans (in which the state takes part of the risk), state aid in launching projects (including feasibility studies and assistance in legal and technical aspects) and the restoration of the “feed-in tariff”, as part of whose projects sell excess energy back to the grid.

Reasons to be excited

These measures have had a positive impact on Scotland. Between 2011 and 2023, community-owned renewable energy capacity increased from around 200 MW to over 1,000 MW. Scotland currently has enough community power to power 25 per cent of households (or alternatively all streetlights in the UK). It sits within Scotland’s overall impressive renewable energy sector, producing the equivalent of over 100 per cent of Scotland’s electricity needs (around a quarter of all UK renewable energy production).

Fortunately, the English community’s renewable energy sector provides a ‘control group’ through which we can understand the comparative impact of Scottish measures. In 2021 (the latest data), England had less than 350 MW of equivalent power (Scotland had over 850 MW at that time). Many projects stall due to lack of capacity, lack of early stage funding and insufficient access to expertise. Where Scotland provides professional support for community projects (often through charities such as the Energy Saving Trust), England relies on volunteers). Growth in the English sector has stalled since the government phased out the feed-in tariff in 2017. The Scottish measures therefore appear to have had a real positive impact.

Does it add up?

But positive impact on whom? Around 41 per cent of Scotland’s renewable energy resources are on farmland and estates. Land ownership tends to be more concentrated in Scotland than in the rest of the UK. Half of all private rural land (around 7.9 million acres) is owned by just 433 people or companies (including the Duke of Buccleuch and the owner of ASOS). It is unclear whether the benefits of the Scottish Government’s policies will reach real communities rather than aristocrats and billionaires.

Reason for concern

The Scottish scheme relies heavily on grants. Although the feed-in tariff is financed by energy suppliers, the rest of the program is covered by the state. Critics will say that this is money that the public budget will not recover. However, the energy industry as a whole is highly subsidized. Between 2015 and 2023, the state transferred £80 billion to the fossil fuel sector (renewable energy sources – approximately £60 billion). According to the IMF, actual subsidies to the fossil fuel industry are likely to be much larger once the costs of externalities are taken into account. The real question for policymakers is not “subsidy or no subsidy,” but rather where best to put the money.

How does it score?

Election appeal: 2/5 Value for money: 4/5 Effectiveness: 4/5 Originality: 3/5

Overall: 13/20

Verdict: It may not provide the lion’s share of energy any time soon, but communities in the south would be grateful for some of Scotland’s solutions.

By CityAM

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