The opportunities and barriers for communities to secure at-risk finance for the development of revenue-generating renewable energy projects Submitted by Richard Hoggett to the University of Exeter as a dissertation towards the degree of Master of Science by advanced study in Energy Policy and Sustainability. September 2010 I certify that all material in this dissertation which is not my own work has been identified with appropriate acknowledgement and referencing and I also certify that no material is included for which a degree has previously been conferred upon me. Contents Abstract ................................................................................................................................................ 5 Acknowledgements ............................................................................................................................... 6 1. Introduction ...................................................................................................................................... 7 Purpose of Research .............................................................................................................................. 9 Aims and Objectives .............................................................................................................................10 2. Literature Review .............................................................................................................................11 2.1 The Development of Community Renewables .................................................................................11 Policy and Support ................................................................................................................................11 Community Action ................................................................................................................................13 Wider Actors ........................................................................................................................................14 Emerging Themes .................................................................................................................................15 2.2 So what are Community Renewables? .............................................................................................16 2.3 Community Renewable Models .......................................................................................................17 Revenue-generating Community Renewables .......................................................................................19 2.4 Barriers to Community Renewables .................................................................................................21 Skills, Capacity and Support ..................................................................................................................21 Planning ...............................................................................................................................................22 Regulations ...........................................................................................................................................22 Funding and Finance .............................................................................................................................23 2.5 At-Risk Finance ...............................................................................................................................24 2.6 Basis for Research ...........................................................................................................................27 3. Methodology ....................................................................................................................................29 3.1 Sampling .........................................................................................................................................29 3.2 Interviews .......................................................................................................................................30 3.3 Analysis...........................................................................................................................................32 3.4 Strengths and Weaknesses ..............................................................................................................33 4. Research Findings and Discussion.....................................................................................................35 4.1 Perceptions of Community Renewables...........................................................................................35 Explaining Interest in Community Renewables ......................................................................................35 Potential Drivers ...................................................................................................................................36 Community Values ................................................................................................................................37 Ownership, Benefit and Control ............................................................................................................38 4.2 At-risk Finance for Community Renewables .....................................................................................39 Issues for Securing ................................................................................................................................39 Ways to Reduce Risk .............................................................................................................................42 Planning Risk ........................................................................................................................................42 Project Design.......................................................................................................................................43 The Role of Funding ..............................................................................................................................44 Adopting a Portfolio Approach ..............................................................................................................44 Providing Support .................................................................................................................................45 Models .................................................................................................................................................46 4.3 Established and Emerging Approaches for the Development of Community Renewables .................46 What they offer Communities ...............................................................................................................50 4.4. Policy Development .......................................................................................................................52 The Provision of Finance .......................................................................................................................53 Resources and Support .........................................................................................................................54 2 Regulations ...........................................................................................................................................55 4.5 Wider Considerations ......................................................................................................................56 Bankability ............................................................................................................................................56 Recent Policy Developments .................................................................................................................57 Evidence from Other Countries .............................................................................................................58 Cultural and Behavioural Change ..........................................................................................................59 Neighbourhood Approaches .................................................................................................................60 5. Conclusions ......................................................................................................................................61 Issues for their Development ................................................................................................................61 Reducing Risk .......................................................................................................................................61 Opportunities for their Development ....................................................................................................62 Supporting their Development ..............................................................................................................64 The Role of Community Renewables .....................................................................................................65 Areas of Further Research .....................................................................................................................65 References ...........................................................................................................................................67 Annex 1: Individuals Contributing to Research .....................................................................................74 Primary