energy – Green Finance Community Hub

This post was written for Green Alliance and was published on Inside Track on 23/01/2025.

This post is by Ciara Shannon, founding director of the Green Finance Community Hub CIC and green finance lead at North West Net Zero Hub.

The Local Power Plan has the potential to transform the future of UK energy. But its true impact will depend on whether both large scale community energy projects and smaller projects get the support they need. Supporting large scale community projects could spark a new era for energy, if it’s given the scale and backing it needs.

Communities can’t compete with large companies

Communities face substantial barriers when competing with corporations to develop large scale renewable energy projects such as offshore wind. Businesses are better positioned to secure financing and access capital, while community groups face challenges in raising development funds, and lack financial and technical expertise.

Not only are they unable to compete, but community investors are also excluded from investing fully in the high return, early investment phases or larger projects. Instead, they’re often given options with lower yields in the later stages, such as investing in operational assets, which limits them from benefitting from the higher returns available in the development phase and constrains their role to partial ownership, undermining the transformative potential of community energy. It’s time to shift this paradigm.

While the government’s Local Power Plan’s proposed £600 million for local authorities and £400 million for community energy loans marks a significant step forward, these funds, when distributed, will fall short of supporting truly large scale community energy initiatives.

Project Collette is a new community opportunity

At the Green Finance Community Hub, we are incubating Project Collette, a proposed 1.2GW (80-100 wind turbine) offshore wind farm off Cumbria’s coast. This aims to be genuinely groundbreaking in how it is run, governed and financed, allowing communities and residents to benefit directly. Our Community Integrated Investment Model (CIIM) ensures communities can invest in renewable energy projects from the earliest, high return stages and combine public, private and community funding to create a balanced and inclusive financial ecosystem. It also will use guarantees and co-financing arrangements to mitigate the financial risks associated with early stage investments.

Public support for community owned projects is growing

Recent polling from Common Wealth highlights a promising shift in public opinion. According to their research, 62 per cent of respondents expressed support for community energy in their local area, versus 40 per cent who favoured privately owned renewable projects.

These numbers are similar to the community engagement we did for Project Collette in Cumbria in 2024 when 578 people responded to our survey and 64 per cent expressed support. The most cited benefits were job creation, skills training and discounted electricity. People were also asked if they would consider investing in Project Collette and 32 per cent, especially younger people, saying they would.

Shared ownership is successful in Denmark

One of the best known examples of a community owned offshore wind project is Middelgrunden Wind Farm in Denmark. This supplies four per cent of Copenhagen’s electricity and is co-owned by Danish people in a co-operative that owns 50 per cent of the wind farm. The other 50 per cent is owned by the Danish utility company HOFOR. A combination of community investment and supportive government policies made Middelgrunden possible. Community members receive annual dividends based on the wind farm’s performance, offering them a stable and long term source of income. The Local Power Plan could learn a lot about co-investment and partnership from this example.

The Local Power Plan is also a chance for local councils to be important players in the push for net zero. Councils such as the Greater Manchester Combined Authority (GMCA), Cheshire West and Chester have already led the way with projects like solar farms, heat networks and energy efficiency retrofits.

Sea Lords of the West is a pioneering seabed leasing initiative

This year, alongside work on Project Collette, the Green Finance Community Hub is advancing the Sea Lords of the West proposal, a bold vision that calls for a percentage of the seabed and land owned by the Crown Estate to be dedicated to the community as a community lease. Under this model, local authorities and community groups would be empowered to act as ‘sea lords’ or landlords, leasing seabed to developers that commit to guaranteed community projects. This approach ensures long term revenue streams for local priorities, such as tackling fuel poverty and improving infrastructure, while giving the community a direct stake in the project, and the opportunity to participate in shaping the future of renewable energy in their region.

A precedent for this exists. The West Anglesey Demonstration Zone is a tidal stream energy initiative managed by the Morlais project. With the potential to generate up to 240MW of electricity, Morlais is the first tidal energy project on this scale to be led by a social enterprise through its partnership with Menter Môn. The project has already created investment opportunities and jobs and, with local ownership at its core, any profits generated will be reinvested into the community.

The model’s success underlines the potential of Sea Lords of the West to create similar economic benefits, scaling up impact across coastal communities along the Irish Sea and beyond.

Developing community energy at scale is not just a climate imperative, it’s an exciting opportunity for us all to own a direct stake in our future.

Originally written as a guest blog for Britain’s Energy Coast Business Cluster (BECBC).

In February, it was hard to ignore the flurry of commentary about Labour’s U-turn on their £28 billion Green Investment Pledge, first announced in 2021.

£28 billion a year in green capital investment, every year, until 2030 was going to turbocharge the green industrial revolution to be spent on battery manufacturing, green hydrogen, offshore wind, tree planting, flood defences and home insulation etc.

Without a doubt, green investment and investing in local net zero economies is desperately needed. But Labour’s £28 billion Green Pledge was becoming a thorny, bulbous distraction.

A bit like Boris’ £350 million a week NHS Bus Pledge – central to the election campaign in 2019 – but always destined to fail.

What’s been less newsworthy but announced by climate scientists on the very same day, is that the world has breached for a whole year, the warming limit of 1.5 degrees centigrade above pre-industrial levels. An announcement that comes hot on the heels of UK investments in new oil and gas fields in the North Sea and the construction of homes and offices that are neither energy-efficient nor climate-resilient.

While a public spending commitment is of course important, the very real and urgent focus should be on the best route to leverage private and public investments in green energy. For example, we need greater clarity on how public funds can leverage private sector investment, how public spending can support early-stage net zero businesses and risk financing, as well as for other stages, like the Valley of Death.

We also need a clearer plan as to how green infrastructure can be built faster, planning accelerated, and decisions made quicker.

There is also more that local authorities can do with local investors. Just this week, Hammersmith & Fulham Council’s Community Municipal Investment (CMI) offer hit its £1 million target with a record number of investors. The CMI is delivering real change in communities, through local authority led net zero projects. Are we thinking about this in Cumberland?

As we said in our Green Investment Plan for Cumbria report, Cumberland as a centre of clean energy innovation, is well placed to lead the competitive race to build knowledge networks and supply chains for the net zero goods and services of the 21st century.

But it needs to look beyond its nuclear offering and cheer on, just as loudly, its renewable energy potential and how its own supply chain companies can diversify their portfolio to support more local green businesses. Think green hydrogen projects at Carlisle, Workington, and Whitehaven or green steel opportunities in Workington (or its surrounds) etc.

Along West Cumbria’s coastline there are eight offshore wind installations bringing major business, investment, and job opportunities along with it. Offshore wind has been making an impact in Cumbria since 2006. Official data for offshore wind generation is defined by where the supply ‘lands’ – Robin Rigg (East and West) – is located midway between the Galloway and Cumbrian coasts in the Solway Firth in Scottish waters, but ‘lands’ in Seaton near Workington in Cumbria. This contrasts with Walney 1, 2, 3, Ormonde, Barrow, and West of Duddon Sands wind farms, which, though an important part of Cumbria’s renewable supply, reach land in Lancashire.

But If I was to walk around Workington or Whitehaven – how many people could tell me about how the offshore wind sector contributes to the local economy or its significant operational and maintenance (O & M) contribution? Possibly they might know about the Robin Rigg Community Fund, funded by RWE, that gives grants to community groups and organisations on both sides of the Solway area.

We should be making much more of Cumberland’s natural born windy coast, it’s bounty of nature-based solutions – positioning Cumberland as a leader in net zero, contributing to global innovation and sustainable growth and being competitive in the future. But to get there, we need strong public policies to drive innovation and help crowd in private investment to tackle climate change, biodiversity loss and environmental degradation.

Tag: energy

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