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Written Evidence from Devon County Council

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Written Evidence from Devon County Council Devon County Council CEN0036 Written evidence from Devon County Council What contribution could community energy (through renewable power and/or energy efficiency) make to achieving net-zero by 2050 in the energy sector and its potential role in decarbonising the heat and transport sectors? 1. The types of contribution that the Community Energy sector in Devon makes to energy efficiency and decarbonisation are summarised in the Devon Community Energy Impact Report 2018, prepared by Regen. This is published here: https://www.regen.co.uk/publications/devon-community-energy- impact-report-2018/ 2. Further evidence about community energy’s role in the transition to net zero is set out in a report prepared by CAG Consultants for Devon County Council on ‘Devon Community Energy: Socio Economic Impact Assessment’ - to be published shortly. 3. The community energy sector in Devon has formed the Devon Energy Collective CIC, which is owned by a network of local-level community energy enterprises in Devon. Devon Energy Collective has ambitions to develop a large-scale portfolio of 100 MW of community-owned renewable power projects, with the support of partners including Devon County Council (see https://devonenergycic.co.uk/ ). This form of collective action may provide a route for community energy groups to: Make a greater scale of contribution to the transition to net-zero; Provide economies of scale that help to achieve viability for unsubsidised schemes; and Deliver major schemes in a professional way, overcoming capacity limitations and skills gaps within individual community energy groups. How well are the financial and technical needs of setting up and running community energy projects met by existing Government support mechanisms? What changes would be needed to the access or nature of support to develop community energy further? 4. Devon County Council is aware that it is currently challenging for community energy groups to develop new schemes, since the removal of Feed-in-Tariff subsidies. This is driving the community energy sector in Devon to focus on large-scale renewable energy projects that offer economies of scale. What are the main barriers to development of new community energy schemes under the current regulatory regime? Do lack of connection or high access charges to the electricity grid pose an obstacle? How could these be overcome? 5. Constrained access to the electricity grid, and high access charges, are a barrier to the development of new renewable power schemes in Devon, including community energy schemes. The analysis prepared by CAG Consultants in the forthcoming report assumed that grid connection costs for a 30 MW solar development within Devon would be £2.0 million. While this assumption is only indicative, and the exact grid connection costs would depend on the locations of any scheme, this gives some indication of the cost implications of constrained grid access. Devon County Council CEN0036 What role should Ofgem play in supporting community energy and resolving regulatory issues, such as decentralisation and incorporating community energy projects into smart electricity grids? 6. Devon County Council has no specific evidence to offer on this question. What role can local authorities play in developing community energy, for example in planning, decision making and the availability of sites for energy generation? 7. Devon County Council has declared a climate emergency and is committed to facilitating the reduction of Devon’s carbon emissions to net-zero by 2050 at the latest. The County council’s proposed role is explained in more detail here: https://www.devon.gov.uk/energyandclimatechange/ 8. As part of its contribution to the transition to net-zero, Devon County Council is considering the purchase of carbon certificates from Devon Energy Collective under a ‘Synthetic Power Purchase Agreement’ (SPPA). 9. The report by CAG Consultants for Devon County Council on ‘Devon Community Energy: Socio Economic Impact Assessment’ compared the local economic and socio-economic benefits of an SPPA with a community energy scheme to equivalent benefits from a local or non-local commercial scheme. This analysis estimated the likely differential in cost between a commercial SPPA and a community energy SPPA and concluded that additional benefits to the local economy would justify the expected cost differential. The executive summary from this report is included below, and further details of this analysis are presented in the main report which will be published shortly. 10. Other local authorities could consider a similar approach to establishing ‘sleeved’ or ‘synthetic’ Power Purchasing Agreements with local community energy groups, as part of their commitment to the net- zero transition. How can policy ensure that community energy projects maximise their positive impacts (social, environmental, economic) on the local communities? 11. Chapter 7 of the report by CAG Consultants for Devon County Council on ‘Devon Community Energy: Socio Economic Impact Assessment’ presents advice on how the positive impacts of community energy projects can be maximised, depending on the objectives being pursued. The research found that multiple benefits, including health, income and energy/carbon benefits, could be generated by well-targeted fuel poverty action by community energy groups. What are exemplars of successful community energy systems from across the UK’s urban and rural communities; what makes them so successful? 12. The report by CAG Consultants for Devon County Council on ‘Devon Community Energy: Socio Economic Impact Assessment’ presents a number of case studies of social, environmental and economic benefits being generated by community energy groups. Copy of Executive Summary from CAG Consultant’s report ‘Assessing the Socio Economic Benefits of Community Energy’ (March 2021) Introduction Devon County Council (DCC) commissioned CAG Consultants to undertake a review of the socio-economic benefits of Community Energy. This report was funded by the European Investment Bank as part of their European Local Energy Assistance (ELENA) programme. The purpose is to assess whether investing in local, Devon County Council CEN0036 community-owned renewable energy generation projects can deliver better value for money for a local economy than purchasing similar energy from a traditional commercial provider. Whilst this study has specifically addressed the issue in a Devon context, the findings may have wider applicability for other local authority areas. Socio-Economic Benefits of Community Energy There are a range of different types of wider benefits that can derive from investment in Community Energy (in the form of a local, community-owned renewable energy generation project). These include: Direct benefits from investment in local, community-owned renewable energy generation (e.g. jobs/GVA, local multiplier effects from this investment, returns to local shareholders, direct carbon savings and – for some types of projects – reductions in energy prices for local consumers and improvements in local resilience, in addition to local environmental impacts) Indirect benefits from local investment of the surplus generated by local, community-owned renewable generation, together with any leveraged funds. Investment of this surplus can bring wider benefits, depending on how it is targeted and spent. The benefits can range from further carbon savings (if surplus is invested in further renewable generation) to local social and environmental initiatives. The evidence suggests that well-targeted energy efficiency and fuel poverty work can generate multiple types of benefits encompassing energy bill savings, income maximisation, health and welfare benefits (including health service savings), in addition to carbon benefits. Some of these benefits (e.g. local employment and economic activity impacts) would be similar for a local community-owned renewable energy scheme and any comparable local renewables project delivered by a private commercial developer. But others, such as returns to local community shareholders and local investment of surplus, are specific to a local community-owned scheme. Valuing Benefits for the Devon Economy The study aim was to understand what, if any, difference in cost there might be from purchasing energy, or in the case of Devon ‘carbon certificates’, from a Community Energy provider compared with a mainstream commercial provider. We then sought to assess whether the additional socio-economic benefits associated with Community Energy were greater than this cost differential. To do this we constructed an illustrative financial model for a large-scale solar energy farm under three scenarios: 30 MW solar farm developed as a local community energy project 30 MW solar farm developed through a mainstream private sector provider locally in Devon 30 MW solar farm developed through a mainstream private sector provider elsewhere in the UK The purpose of the local and non-local variant is to understand whether, and if so the extent to which, it is the Community Energy or local elements of the project that are driving any additional costs. We have conservatively assumed that a local Community Energy scheme would cost more than a commercial scheme, although the cost difference may be lower than we have assumed for a Community Energy scheme that is developed and operated in a professional and quasi-commercial manner. On the basis of the figures used for our models, the local Community Energy scheme could cost Devon County
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