The biggest obstacle governments in industrialised economies have to overcome in achieving a low-carbon transition is changing the relationship that citizens have with energy – from the way we use it at home and in work, to the way we generate and distribute it. Community empowerment and involvement will be vital in delivering this transformation.
Built at a time when oil was cheap, we currently have an energy system that is out of date and unforgivably wasteful. At the moment, only 35 per cent of the energy going into power generation ever reaches homes; the rest is wasted as heat during electricity generation and transmission through the National grid. These in-built inefficiencies mean that regardless of the price of oil or how well insulated homes are, consumers ultimately are forced to pay for more energy than they actually use, as well as produce more carbon than necessary. In the current energy market, as long as we are prepared to pay to keep our lights on, there is little motivation for the energy companies to tackle these inefficiencies and invest in a modern system.
Taking housing as an analogy, changing the ownership of our housing stock during the 1970s and 80s, increasing the number of owner-occupiers, was the solution to modernising our homes. As we move towards more renewables, a similar change in the ownership of our energy system could help modernise our energy system – introducing a ‘community dividend’ so that communities can ‘own’ a stake in energy production, perhaps in return for a fast track planning process or as a new version of planning gain agreements. Owning such a stake could enable communities to share in the profits and help tackle fuel poverty. But, more importantly, just as home owners make decisions about their homes for reasons not just financial, a community stake could also help change the role and perspective of energy companies – taking their long-term responsibilities for the energy infrastructure, their charging structures and their impact on the environment more seriously.
The government’s current ambition to generate 30-35 per cent of electricity from renewable sources by 2020 offers a great opportunity to develop this model. Energy companies might pay for the equipment, but they are essentially harvesting a ‘free’ resource. Why shouldn’t ‘host’ communities be given a stake in these developments? As well as giving community buy-in to such developments (local opposition is one of the biggest factors holding up the growth of renewables in the UK – would that change if they are set to profit from the development?), this community dividend would help offset any local loss of amenity, such as views from the installation of wind farms. Furthermore, as renewable resources are geographically distributed in some of our poorest communities, a community dividend could also play a significant role in redistributing wealth, helping tackle fuel poverty further.
Melanie Smallman, National Coordinator for Sera