Author: Hugh Goulbourne, Director and General Counsel at CO2Sense CIC
The government’s Clean Power 2030 (CP2030) action plan represents a bold vision for the UK’s transition to net zero, but the road ahead requires more than ambitious targets. Community Energy (CE) is key to translating policy into tangible outcomes – lower energy prices, local wealth creation and visible projects that will inspire public support and confidence.
For CE to reach its potential, the Local Power Plan (LPP) must accelerate capacity building, funding and policy certainty. Firstly, this isn’t about criticising the government; it’s about seizing an opportunity. With the right approach, the LPP can become the driving force behind real change across our country, whilst putting local communities at the heart of the energy transition.
With the public fearful about a faltering economy and continued rising costs, it is essential that climate change mitigation is led by initiatives that are seen to deliver lower prices and greater control to households in the short term. The public is looking for solutions that offer immediate, visible benefits. Research shows that people support green technologies when they work and deliver results for them.
Community energy already demonstrates this. To name one example, C02Sense recently attracted investment through match funding with Ethex for the Energise Barnsley project, which installed solar panels on 100’s of council-owned properties in the Barnsley area, including over 320 council homes. This has allowed low-income households to benefit directly from affordable solar energy. These initiatives show how renewable energy can be accessible, local and impactful.
CE is also able to foster unity. When a community adopts clean energy together – installing solar panels across a neighborhood or launching a shared heat network – it creates trust and shared purpose.
Despite its promise, the community Energy sector faces significant challenges in 2025 that the LPP must address:
Local authorities, community groups and small businesses often lack the expertise to develop renewable projects or assess their viability. Without the right support, promising ideas struggle to take shape.
While the government’s £175m start-up funding for CP2030 is a positive step, it risks being absorbed by administrative tasks rather than deployed into real projects.
Projects critical to rural areas, such as anaerobic digestion (AD) and small-scale hydro, lack the mechanisms to attract funding. Additionally, regulatory hurdles are a significant barrier to the development of community-scale energy installations.
What the community energy sector needs from the government is certainty and pace. CO2Sense is approached frequently by CE groups with pipelines of solar and community heat projects ranging from £0.5m to £10m over the next 18 months to 4 years. While the sector is ready to mobilise, there is a dependency on government guarantees to de-risk investments. Due to this, local authorities and public bodies must prioritise clearing unnecessary regulatory obstacles that hinder project development.
Without action, these gaps risk stalling progress, leaving both national and local governments open to criticism for failing to deliver tangible outcomes.
Communities risk being left behind if private developers capture the profits from local renewable assets without delivering broader benefits.
Without action, the CE sector risks stalling, leaving both government and local authorities vulnerable to criticism for failing to deliver tangible results.
The Local Power Plan provides a unique opportunity for the government to supercharge community energy, delivering results that align with its clean energy and wealth-sharing missions.
Invest in Capacity: Allocating a portion of the LPP’s funding – such as £100m for capacity building would empower local authorities and community groups to develop viable projects. This includes funding feasibility studies, sharing templates and creating knowledge hubs to transfer expertise. The Scottish Government’s Community and Renewable Energy Scheme (CARES) is an example of such a platform, which combines early stage financial support with a single point of contact for communities developing projects.
Unlock Pooled Finance: By attracting more private investment, the community energy sector can scale more rapidly with minimal cost to the Government. To facilitate this, CO2Sense is developing a ‘pooled fund’, which is designed to make community energy projects more appealing to private investors. The fund will target lower-risk projects, such as:
Government involvement could be pivotal in seeding the fund by either underwriting potential losses or partnering with CO2Sense and their syndicate to provide an initial investment in a first-loss position.
This approach would come at minimal cost to the government, given the low-risk nature of these investments and would help the Government and Great British Energy concentrate the £1 billion capital anticipated for the Local Power Plan (2027-29) on early-stage development and capacity-building initiatives.
Deliver Quick Wins: Visible projects such as solar panels on schools, feasibility studies for heat networks, or small-scale hydro installations can demonstrate the government’s commitment to action, inspiring public confidence.
Enable Locational Pricing: Policies that tie local energy generation to reduced energy bills for nearby households would make CE more attractive and accessible. As highlighted in the Prime Minister’s recent announcement on 13th January 2025, AI technologies are being explored to optimise energy usage and market efficiency.
This could mean that every household and community can trade energy on a half-hourly basis with the local grid, empowering individuals and communities to actively participate in the energy system.
With AI enhancing local energy markets, these policies could open new opportunities for communities to benefit from reduced costs and greater energy control.
As mentioned at the start of this article, none of this is about criticising government or local authorities, there are already examples of best practices across the UK. But as the Prime Minister has emphasised, the government must focus on solutions that resonate with people’s lived experiences.
Community Energy is a way of demonstrating how the government wants to change things, but they must act now. CE empowers local people, delivers tangible benefits and showcases how policies can create real change.
CO2Sense has spent over 12 years enabling community energy projects to succeed. From affordable solar installations to wind turbines to farm based anaerobic digestion and low head river ‘hydro’ generation, we’ve helped communities unlock the benefits of renewable energy.
We’re ready to partner with government, local authorities and community groups to turn the Local Power Plan into a national success story. By attracting a blend of finance and leveraging our expertise to deliver quick wins, we can help communities take control of their energy futures and drive the UK towards its Clean Power 2030 goals.
Hugh Goulbourne is Director and General Counsel at CO2Sense CIC. CO2Sense acts as an early-stage investor and partner, enabling low-carbon projects to grow, scale and deliver benefits to communities, businesses and the environment.
CO2Sense can help you with the planning, feasibility, financing and project management for your renewable energy project.
Contact us today on talk2us@co2sense.co.uk
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