MPs urge Government to support medium-sized renewables projects
Financial support should be made available for businesses, cooperatives, local authorities, schools and housing associations to install medium-sized renewable energy generating systems, MPs on the Energy and Climate Change Committee have said.
Installations such as solar arrays, wind turbines and district heating systems carried out by these organisations could provide benefits to "communities and the country as a whole".
Speaking on behalf of the Committee, Dr Alan Whitehead said: "Businesses can reduce their energy overheads, locals can potentially benefit from cheaper electricity or heat, and councils can use projects to tackle fuel poverty, cut costs and reduce carbon emissions".
Whitehead said that these medium-scale power plants could also help to boost energy security.
"Local heating schemes in particular could be helpful in balancing out peaks and troughs in electricity supply and demand by storing energy as hot water when there is a surplus of electricity being generated. If small-scale power plants fail it would cause less of an impact than if a large power plant fails."
While the Government's Feed-in Tariffs (FiT) provide support to households who install small-scale renewable energy systems, and large scale projects like off-shore wind farms will soon be supported through new fixed-price Contracts for Difference (CfDs), medium sized energy projects of between 10-50 megawatts (MW) currently fall in the gap.
Medium-sized energy projects are too big to receive FiTs and too small to take advantage of CfDS.
The MPs have called for the Government to bring forward a proposal to support schemes within the 10-50MW range to incentivise the development of medium-sized projects which are not served under the two support schemes.
In addition, MPs have highlighted several other barriers that can prevent local energy projects getting off the ground and have urged the Government to address these issues.
According to the MPs, securing funding and Power Purchase Agreements, connecting to the grid and overcoming public opposition can all prove difficult.
Obtaining planning permission can be costly and time-consuming, and the risk of losing tens of thousands of pounds if permission is not granted is a huge obstacle for community groups or small cooperatives.
While larger companies and utilities can shoulder these costs, as they may be applying for a number of projects simultaneously, smaller bodies must take considerable risks with no guarantee of recovering expenditure.
The MPs stress that some form of support mechanism is needed alongside a comprehensive package of measures addressing finance, planning, grid access and advice.
They added that the Green Investment Bank could play a key role in encouraging installations by providing seed funding and project development funding for feasibility studies, grid permits, etc to reduce some of the risk in getting projects through the planning process.
Whitehead added: "We support the Government's ambition to return decision-making powers to local authorities, but carbon reduction is a national priority.
"Although it is unlikely that local energy projects will eliminate the need for larger, centralised power stations completely, with some Government support they could provide a significant proportion of the UK's energy capacity while reducing carbon emissions and increasing efficiency."
According to the MPs, there are strong indications that some level of local ownership can help to boost support and reduce opposition to energy infrastructure projects.
To drive this, the Government should "encourage industry to offer a stake to local residents for all new developments" or consider the option of making a community ownership offer mandatory for all new developments, the MPs added.