In a report from the Energy and Climate Change Committee, MPs said that businesses, cooperatives, local authorities, schools and housing associations must be supported in installing technologies such as solar arrays, wind turbines and district heating systems.
Currently, the government provides support for households to install small-scale renewables through Feed-in Tariffs (FiT), while large scale projects will soon be supported through fixed-price Contracts for Difference (CfDs).
However, MPs are concerned that medium-sized energy projects between 10 to 50MW “fall in the gap” and do not receive support.
Speaking on behalf of the Committee, Dr Alan Whitehead said that providing funding in this area could bring substantial benefits to communities and the UK as a whole.
“Businesses can reduce their energy overheads, locals can potentially benefit from cheaper electricity or heat, and councils can use projects to tackle fuel poverty, cut costs and reduce carbon emissions,” he said.
“Medium-scale power plants could also help to boost energy security. Local heating schemes in particular could be helpful in balancing out peaks and troughs in electricity supply and demand by storing energy as hot water when there is a surplus of electricity being generated. If small-scale power plants fail it would cause less of an impact than if a large power plant fails,” Whitehead added.
According to the report, as well as enhancing energy security, the move could encourage energy-conscious behaviour and greater public engagement in carbon reduction initiatives.
The report also identifies a number of barriers that can prevent local energy projects getting off the ground. These include obtaining funding and Power Purchase Agreements, connecting to the grid and overcoming public opposition.
In addition, the report states that obtaining planning permission can be costly and time-consuming, and the risk of losing tens of thousands of pounds if permission is not granted, puts off community groups.
One solution for this, according to the MPs, is for the Green Investment Bank to provide seed funding and project development funding for feasibility studies and grid permits to reduce the risk in getting projects through the planning process.