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Blog Post 4 November 2021

Net zero Wales: the community energy opportunity

Last month, National Grid, along with academic and industry leaders, published a report setting out a credible decarbonisation pathway for the South Wales energy system, a region spanning Pembrokeshire to the west across to Monmouthshire in the east. This work, which brings together findings from a two-year project and several working groups, is one of the most comprehensive modelling exercises undertaken in Wales. 

The Zero 2050 report considers several scenarios and technologies that could help in decarbonising the energy system in South Wales. Interestingly, the report considers the ‘energy system’ in broader terms than some previous work by including electricity, heating and transport, recognising that these energy demands interact in increasingly interconnected ways.

These scenarios, or ‘cases’, are different depending on some factors that are difficult to model. These include things like how many of our homes will be heated by electricity via heat pumps or with hydrogen, whether we will be able to store large amounts of excess hydrogen in salt caverns, and how much of Wales’ renewable electricity can come from local sources.

While there are lots of uncertainties about these technologies and approaches, the group found that across the different cases some actions are always worth taking. These are classed as ‘low regret’ recommendations, and include:

  • Increase capacity of onshore wind and solar.
  • Develop a major residential retrofit programme and develop a robust heat pump supply chain.
  • Incentivise commercial and industrial energy efficiency.
  • Consider opportunities for industry co-location and circular economy processes – reducing energy waste and making processes more efficient by having businesses that supply each other closer together.
  • Investigate further the role of demand side response, which would allow energy consumers to use electricity when it is cheap and in surplus, and even sell electricity back to the grid when generation is lower.
  • Pilot both blue and green hydrogen production.
  • Investigate hydrogen salt cavern storage at a UK scale.
  • Undertake network studies to understand feasibility and cost of transitioning networks to use hydrogen.
  • Deliver a coordinated electric vehicle (EV) charging rollout programme.
  • Investigate options for carbon capture, use and storage and carbon dioxide (CO2) export from South Wales.

We can split these low regret recommendations into two groups: those which can be rapidly deployed to reduce emissions now, and those which will bear fruit in the medium-to-long term. While these longer-term approaches, such as investigations into the potential for salt cavern hydrogen storage and network studies to understand the costs of hydrogen, along with pilots for hydrogen production and carbon capture, use and storage are worthwhile – and will help to deliver a fully zero carbon economy in 2050 – there are steps we must take now to reduce household emissions. The approaches the group identified that are more readily deployable are: increasing onshore renewables, developing a retrofit programme and heat pump supply chain, incentivising energy efficiency and delivering an EV charging network.

We wholeheartedly support these near-term priorities and see a role for local area energy planning and community energy enterprises in delivering them.

A role for community energy?

Looking across the low regret options that we can deliver now to address climate change, we see a strong role for community and local energy projects to play in achieving these aims in a fair and evenly distributed way across the region.

Community energy projects are usually communities of place focused on energy issues, often in the form of installing renewable energy generation technology, with the benefits of this work shared among the community – either through a community benefit fund or similar or through dividends to shareholders. Projects tend to emphasise community ownership, leadership, or control.

Already, community energy projects in Wales and across the UK are combining onshore renewable energy generation with work to improve the energy efficiency of local people’s homes through low carbon retrofit and the installation of EV chargepoints in areas that aren’t as appealing to private developers. Community and local energy projects are among some of the most ambitious and forward-thinking out there, keen to consider innovative approaches such as demand side response and energy storage.

The value in enabling community and local energy enterprises to pioneer this kind of innovative work is that it helps to spread the benefits of the transition around Wales, potentially reaching into every community and reflecting their unique needs. No one understands these communities’ needs more than the people who live there, and this is one of the great strengths of a community approach. If organised and supported correctly, these projects can help to improve other services offered by UK and Welsh Government.

For example, if a community project, funded with money made from generating renewable electricity from a wind turbine, works to provide energy efficiency advice in their local area, they will be more likely to give bespoke advice to members of their community, reaching people who might not otherwise engage with these issues or the services available, and can signpost them to government support programmes, such as the UK Government’s Energy Company Obligation (ECO) and Welsh Government’s Nest scheme. This is just one example among many and one that is beginning to be piloted in the region by Cwm Arian Renewable Energy.

The importance of local energy projects in achieving a fair transition to a low carbon Wales through the provision of tangible community benefits was recognised by all political parties in a Senedd Plenary session during a Member Debate on this topic. The Zero 2050 report itself says that under all cases “local generation is preferred” to reduce the need for grid upgrades and imports.

Unfortunately, it has become harder for these groups to deliver on these ambitions, and many have had to reduce the extent to which they can do this important work because the subsidies many groups relied on to fund these additional projects have been cut. Other work programmes, like the interest in energy storage and demand side response, reflect the high costs and logistical challenges involved in exporting locally produced small-scale renewable energy to the grid in many areas of Wales. If we want local and community energy enterprises to begin to address the immediately deliverable low regret recommendations identified in the National Grid Zero 2050 report, these groups need long-term support.

Further reading

Last updated: 4 November 2021