Beyond "Steel in the Ground"

Why the UK needs structural change to unlock local energy

The UK has no shortage of clean energy ambition. Renewable capacity is growing and the targets are set. Yet across the country, small-scale projects that could genuinely transform local economies are stalling from mini-grids and community solar schemes to local energy hubs. The barrier to these isn’t a lack of wind, sun or technology, it’s structural.

Fragmented finance, centralised ownership models and grid bottlenecks mean that communities across the UK remain largely locked out of the energy transition.

Understanding The “Missing Middle”

The “missing middle”, described as the space between national wholesale energy markets and household-level action, was highlighted by Kate Gilmartin, Founding Member of Community Energy England and GB Energy Director in her keynote at the 2025 Community Energy Awards. This is where much of the local economic value from community energy currently leaks out. Local generation, balancing, and ownership could retain this value, reduce costs and increase resilience, but historically these benefits have often bypassed the communities that create them.

Founded as a CIC in 2012, CO2Sense knows that small-scale projects, typically in the £1m to £20m range, are often too small for the City to notice and too complex for individual communities to fund alone. They sit in what Kate referred to as the missing middle, and it is here that some of the most significant opportunities for local economic value are being lost.

Grid access costs are high. Planning processes are slow. The fragmented nature of project development means that even the most promising schemes struggle to attract the finance they need to get off the ground.

Meanwhile, the national grid continues to funnel power from the North to the South, curtailing renewable generation in high-output regions, while fossil fuel plants remain in use elsewhere. The inefficiency is entirely avoidable.

By connecting finance, local ownership and smarter planning, projects can keep value local as Energise Barnsley has shown this in practice.

From Extraction to Generation

For too long, infrastructure investment has been extractive. Land in the North or West is used to generate power and profit that flows to institutional shareholders far from the communities that host it. To prevent solar and wind farms from becoming industrial colonies, community ownership must be central to how Great British Energy (GBE) operates.

  • Wealth Retention – Community ownership changes the economics. Local clean energy projects can retain multiple times more economic value within a community than fully commercial models, ensuring that money stays on the high street rather than flowing to a distant balance sheet.

  • Social Licence to Operate – Renewable energy planning is one of the UK’s biggest cost drivers. Projects with meaningful local stakes move faster through planning, face less opposition and build the kind of social licence that makes delivery genuinely possible due to the benefit being tangible, rather than theoretical. 

The energy transition only succeeds if it is generative, not extractive. That means finance, ownership, and the grid all working in favour of communities, not despite them.

Great British Energy And The Opportunity At Hand

The arrival of Great British Energy changes the game. GBE’s success won’t be measured by the size of its own balance sheet, but by how effectively it acts as a Public Financial Institution to ensure that the transition is generative, not extractive.

The mechanisms already exist.

  • Catalytic Grants – can get projects through the high-risk planning stage.

  • Aggregation Models – can bundle smaller assets into portfolios large enough for institutional investors.

  • Platforms like Ethex and Abundance – can bring in long-term community investment.

  • The National Wealth Fund – can provide guarantees that make portfolios safe enough for the UK’s largest pension funds.

GBE doesn’t need to reinvent the wheel. It needs to connect the pieces that already exist and deploy them at scale.

Local Energy, Local Value

The north-south bottleneck isn’t just an infrastructure problem – it’s an economic one. Generating power in the North and funnelling it through a transmission network that wasn’t built for the demands of a renewable energy system drives up costs for everyone and locks Northern towns out of the value their own energy creates.

The solution isn’t simply more pylons. By balancing supply and demand at a local level, communities can keep their own power local, reduce reliance on the national transmission network, and over time create the conditions for significantly cheaper electricity in the towns and regions that need it most.

Digital infrastructure is central to this. By using AI to balance supply and demand at substation level, local energy can be consumed locally, bypassing the national transmission network altogether.

By enabling local energy pricing, GBE can make electricity significantly cheaper in Northern towns like Blyth, Preston and Huddersfield. Moving industry to the power source decouples the Northern economy from London and reduces the need for billion-pound transmission infrastructure.

GBE As A Catalyst

The launch of the Local Power Plan and GBE’s Local Investment Strategy are genuinely encouraging steps. By bundling projects into a bankable pipeline and working through local partners, GBE is beginning to create the scale and certainty needed to unlock regional development. Alongside that financial architecture, there is an opportunity to clear the regulatory barriers that have historically driven up costs and slowed delivery.

If you are a local area project developer, you can submit a portfolio proposal directly via GBE’s expression of interest form. We hope that many of the local area project developers that we have supported over the years will engage with the new framework.

Expression Of Interest Form

There is a clear opportunity for GBE to work with the Department for Energy Security & Net Zero (DESNZ) to address the regulatory barriers that have historically driven up costs and slowed delivery.

  • Section 144 of the Energy Act 2023 – creating permanent local transmission charge exemptions for community energy would meaningfully reduce the cost burden on smaller projects.

  • Standardised design frameworks – moving away from bespoke engineering for local energy hubs could cut project costs by 20 to 30 per cent.

  • A social impact scorecard – measuring fuel poverty reduction, democratic participation, and regional wealth retention alongside carbon output would ensure the transition is genuinely accountable to the communities it is meant to serve.

From Ambition To Action

The energy transition succeeds when finance, ownership, and the grid work for communities, not distant shareholders. The mechanisms exist. The policy levers exist. What has often been missing is the alignment of finance, technology and political will required to deploy them at scale.

By connecting blended finance, community ownership, and smart local energy systems, the UK can move beyond “steel in the ground” and build something more ambitious: a resilient, inclusive energy system where the benefits of clean power stay in the places that generate it.

GBE’s ultimate success will be the creation of a local power asset class so robust and so attractive that public funding is eventually no longer required. That is how the UK moves to the frontier of the global energy transition.

The challenge is not the wind or the sun. It is making sure their value flows to the right places.

This is the first in a series of pieces exploring what a genuinely inclusive energy transition looks like and what it will take to get there. Sign up to our newsletter to stay across the latest news, projects and insights.

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