The working group was formed in January 2014 to discuss issues around grid connections that are being faced by community energy projects, and identify the actions that can make a real difference to future community energy projects. It was convened at the request of the Secretary of State, Department of Energy and Climate Change, who asked Ofgem to chair this group. The working group submitted its final report (full version available in the link below) to the Secretary of State in July 2014.
The government’s Community Energy Strategy sets out how local communities can make an important contribution to maintaining energy security, tackling climate change and keeping costs down for consumers. In particular, community energy generation can help achieve the UK’s goals of decarbonising the power sector and seeing a 15% share of our energy provided from renewable sources by 2020.
To deliver these benefits, and meet the public policy aims of the Community Energy Strategy, the majority of community energy projects will need to connect to the electricity grid. Given the constraints on large parts of the distribution and transmission networks, due in part to the increase in renewable and distributed generation, this is already a major barrier to many community energy projects and is set to increase.
The Secretary of State for Energy and Climate Change requested that a working group be formed to consider what can be done to make it easier for community generation projects to connect to the grid. The group brought together community energy groups, distribution network operators (DNOs), advisory bodies, government and the regulator, and was a valuable opportunity to better understand each other’s needs and responsibilities.
The community energy representatives on the working group indicated more broadly that models of ownership and regulation beyond the current market structures could better enable the sector’s aspirations. However, at the Secretary of State’s request the working group focussed its efforts on the topic of community energy grid connections.
Sections 3-5 of the report set out actions that can be implemented within the current rules governing the operation of the grid to reduce the barriers to community energy project connection. These actions fall into three broad themes: customer engagement, enabling smart connection offers, and managing the cost of connection. Many are already underway or planned as a result of the working group’s process, which has (for example) prompted improved engagement from DNOs as a result of shared best practice, and instigated community energy involvement in the Smart Grid Forum.
First, however, section 2 of the report examines more transformational measures needed to address the specific challenges community energy projects face, but which would require changes to the current rules. In particular, enabling these more transformational solutions would require a clear public policy steer from government on the case for distinct treatment of community energy projects. The costs and benefits to energy consumers as a whole, as well as the implications for other public bodies, would need to be assessed before these measures could be implemented.
To help identify the most effective measures, all of the recommendations and actions have an indicative rating of their potential impact in three respects:
These impact ratings should aid consideration of the most targeted next steps for grid connection.
The actions in this report are assigned to a variety of actors. Some are already in progress, and working group members have agreed to implement those which remain. Where these relate to DNOs Ofgem will be monitoring progress through the price control process tools. However, to ensure that improvements are made in all areas, the working group recommends that alongside developing an action plan DECC also monitors the report’s actions and publishes an evaluation of progress.