P1070956_400 by 200

Shared projects: shared expertise

Why should renewable energy developers and local energy enterprises be thinking about shared ownership?

Local ownership of energy generation, including through shared ownership arrangements with commercial developers, and community-based solutions to the delivery of energy efficiency, fuel poverty reduction and energy market reform is key to the development of a low carbon, low cost and resilient energy future. This is reflected in Government policy.

Following  the  publication  of  the  Community  Energy  Strategy  in  2014,  the  Government  has  created  enabling powers to legally require developers of renewable energy projects to offer the local community the opportunity to share in the ownership of their projects. A policy introduced in 2015 enables two projects of up to 5MW each (10MW total) to share a grid connection and both benefit from the FiT, where one of the projects is owned by a qualifying community entity. The FiT and Renewables Obligation are otherwise capped at 5MW. This creates a positive financial incentive for both commercial developers and communities to engage in shared ownership.

Opportunities for local energy enterprises
  • Involvement in a MW-scale project with grid, planning and land secured
  • The support of an experienced partner to help develop, build and operate the project
  • The community share of the project should deliver significant surplus income to support energy efficiency, fuel poverty and community initiatives in the host community as well as enabling people in the local and wider community to share in the ownership of the project
  • The shared ownership project should become a seed for further community energy initiatives in the locality
 Opportunities for renewable energy developers
  • Enables over 5MWp to be built when otherwise the developer may only build 5MWp under the FiT/RO limit (assuming the project has secured a viable FiT)
  • Increased community benefit from and involvement in the project, which should carry positive weight in the planning decision
  • A ‘fair market value’ development profit may be generated by the community purchase
  • Ongoing income  streams  through  asset  management  and  loan  arrangements  (if applicable)  with  the community project
  • Develop experience and replicable business models in shared ownership, and compliance with UK shared ownership and planning policy

How CfR can help

The CfR team has extensive experience of advising both commercial renewable energy developers and local energy enterprises on shared ownership. CfR can help develop and implement shared ownership strategies that meet the needs of both the developer and local community.

CfR’s services include:
  • Strategy development – this can be initiated by a workshop covering policy drivers, relevant case studies, business model options and working through the developer’s objectives to create an approach which meets the needs of both the developer and community
  • Support delivering a shared ownership offer which complies with policy and best practice, and engaging local organisations
  • Setting up a qualifying local energy enterprise (using CfR model community benefit society rules or alternative), establishing local involvement and governance and community engagement
  • Negotiation support, due diligence on behalf of the community and drafting agreements (with legal and financial advisory input where required)
  • Delivery support for the local energy enterprise including community share offer management, commercial finance raising, procurement, and ongoing administration and asset management
How we can help_shared ownership

CfR’s experience 

  • Helped develop shared ownership strategies for a range of clients including a major European utility, major UK wind developer, a number of commercial solar developers and a local authority
  • Managed the community purchase, financing and delivery of 20MWp of ground mount solar farms under ‘split FiT’ arrangements, including the largest community solar farm in the UK