Abstract
This paper aims to analyze the implications of Feed-In-Tariff (FIT) support removal in the UK’s community energy sector and make recommendations for future business practices. European countries, including the UK, have recognized the critical role of Community Energy Cooperatives (CECs) in achieving low-carbon-energy transition targets through citizen engagements. However, due to the withdrawal of FIT support and other incentives in the UK, CECs struggle to sustain their profitability and growth. The subsidy-free, market-oriented policies have necessitated that CECs explore new business opportunities in collaboration with other actors of the business ecosystems. In this paper, we reviewed the impact of FIT support removal on community groups in the UK's member states, England, Scotland, and Wales. We analyzed effective business practices that CECs could follow to improve business viability and achieve growth. Based on our review, we make three recommendations for the business practices that can help CECs to remain profitable and grow in the UK’s subsidy-free environment. We recommend that CECs 1) take part in shared ownership projects, 2) collaborate with local actors for bottom-up initiatives, and 3) explore low-interest financing models within the business ecosystem. The implication of findings from this paper includes new knowledge for CEC managers and policymakers in countries where the community energy sector is at a novice stage.
Highlights
1.1 BackgroundThrough citizen participation, Community Energy Cooperatives (CECs) set up local renewable energy systems to support climate change initiatives (Vancea, Becker, & Kunze, 2017)
This paper aims to review the implications of FIT support removal in the UK's community energy sector and make recommendations for business practices that CECs in the UK should consider to remain profitable and grow in the era of competitive market energy policies
While we review the regional growth of the community energy sector, it is interesting to explore community energy developments in North America, especially Canada, that predominantly rely on fossil fuel-based energy systems
Summary
Community Energy Cooperatives (CECs) set up local renewable energy systems to support climate change initiatives (Vancea, Becker, & Kunze, 2017). CECs emerged during the 1990s, and in the initial stages, these community projects were limited in number while governments continued to focus on centralized energy systems based on fossil fuels and nuclear energy (Braunholtz-Speight et al, 2018; Strachan, Cowell, Ellis, Sherry‐Brennan, & Toke, 2015). The 2000s were marked as a decade of political and social concern, with calls for policies to address the growing climate change concern. During this decade, the UK government enacted energy policies favorable to community energy projects, such as Feed-In-Tariff (FIT) schemes, which led to significant growth in the community energy sector (Eadson & Foden, 2019)
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