Miliband Announces £1bn Boost for Community-Owned Renewable Energy
Energy Secretary Ed Miliband has unveiled a landmark commitment of up to £1bn in funding for community-owned green energy schemes across the United Kingdom. This initiative represents the largest-ever investment in community energy in British history, designed to empower local areas by allowing them to control and profit from renewable power generation.
Democratising the Energy System
Miliband emphasised that this funding is a crucial step towards democratising the UK's energy system. The goal is to increase the wealth and financial independence of local communities, while also potentially reducing energy bills for residents. In a statement, Miliband declared: "Britain's drive for clean energy is about answering the call for a different kind of economy that works for the many, not just the wealthy and powerful in our society. Local and community energy is at the heart of our government's vision."
He further explained: "With the biggest-ever investment in community energy in Britain's history, this government is saying to every local community: we want you to be able to own and control clean energy so the profits flow into your community not simply out to the big energy companies."
Funding Structure and Oversight
The £1bn fund will be managed by GB Energy, the state-owned company established by Labour to help deliver cheaper electricity bills and enhance national energy security. The funding is expected to be allocated before the next general election and will be shared with the devolved governments in Wales, Scotland, and Northern Ireland.
GB Energy has outlined an ambitious initial target of supporting 1,000 clean energy projects through grants or loans. The funding could also enable communities and local councils to purchase shares in larger privately-owned renewable schemes. Ministers anticipate that the money will be used for a variety of purposes, including:
- Installing solar panels on public buildings, churches, and schools to generate off-grid power.
- Funding small-scale wind farms where profits are reinvested into local priorities such as social housing, subsidised bus services, or village halls.
Addressing Sector Concerns and Political Context
While officials in the community energy sector have welcomed the announcement, some have noted that the funding falls short of the £1bn per year promised in Labour's 2024 election manifesto. GB Energy clarified that this investment is part of a broader multibillion-pound green energy strategy, with additional announcements on solar and onshore wind projects expected this week.
The fund is also seen as a strategic move to counter growing scepticism and resistance to renewable energy projects and grid upgrades. Critics, including some local campaigns supported by the Conservatives and Reform UK, argue that large-scale projects industrialise the landscape and divert profits to private investors. US President Donald Trump has also weaponised these issues to challenge Labour's net zero agenda.
Growth and Challenges in Community Energy
Data from Community Energy England, Community Energy Wales, and Community Energy Scotland shows significant growth in the sector since 2017:
- Total installed capacity has increased by 81%.
- Solar and hydro capacity have more than doubled.
- Membership in community energy companies has surged from 30,000 in 2017 to nearly 85,000 in 2024.
Local councils are increasingly involved, with examples like Edinburgh City Council's solar co-op and Orkney Islands Council securing £62m for turbine installations. However, challenges remain, particularly regarding grid capacity. Zoe Holliday, Chief Executive of Community Energy Scotland, warned that the current patchy grid system can hinder projects, but described the new funding as "truly transformative" for rural communities seeking energy resilience and local income streams.
