Historically, the vast majority of electricity generating assets in the UK have been owned by large energy companies. New technologies, which can be built at much smaller scale (for example wind, solar and combined heat and power) have opened up new opportunities for different forms of ownership, such as projects owned by community groups, co-operatives, local authorities and commercial organisations. This has the potential to tap into new sources of investment and may also help to overcome some of the public acceptability problems that have plagued larger-scale energy projects.
The Government currently supports small-scale renewables (smaller than 5MW in size) through the feed-in tariff scheme. Larger renewables are supported under the Renewables Obligation (RO) and in future, will be supported through Contracts for Difference (CfD). The Committee has previously argued that medium-sized projects (between 5-50MW) are disadvantaged because they cannot access the feed-in tariff, yet often lack the financial capability to deal with the complexities of the RO/CfDs. In addition, they may struggle to obtain the reference price under the CfD regime, meaning they would lose out financially.
The Committee is seeking to explore the role that medium-sized local energy projects could play in the UK’s energy system and the extent to which Government policy currently supports these types of development.