ACRE Report - Year 3 (April – September 2013)

Community Energy Schemes and Fuel Poverty Summary

RCEF and Community Energy Schemes (CES) RCEF poorly promoted and low levels of awareness >80% of RCCs report a non-committal or poor response from communities Due to the high levels of skills, knowledge and time required to develop a CES, hands-on specialist support will be required by most communities Communities are concerned about the risks associated in taking on loan finance Opposition by communities to some forms of renewable technologies, for example wind turbines in remote upland landscapes, solar farms in southern lowland areas

Issues Lack of resources to promote scheme and support communities to realise the benefits build consensus in community to engage with the scheme Lack of hands-on specialist support for communities interested in exploring renewable technologies; both community capacity building (which could be provided by e.g. an RCC) and more specialist technical support

Fuel Poverty and Oil Buying Consortia RCC’s reported experiencing a lack of investment (from public or other funds) to enable them to provide adequate response to fuel poverty ‘pride and/or stigma’ prevents people from coming forward for help High incidence of hard-to-treat properties in rural areas (70%) presents intractable problems given the cost of bringing properties up to an agreed standard Households living in areas which do not have access to mains gas face higher fuel bills and this contributes to the higher levels of rural fuel poverty Bulk oil schemes are popular with households reliant on oil as their main fuel and are helping 1000s of households reduce bills Volunteer run oil groups are generally effective but levels of service vary

Issues Need for more investment to tackle fuel poverty directly e.g. through Village Agent schemes, advice and support to vulnerable groups, intensive support to individual households who need it Recognition that social barriers (such as low levels of self-identification as fuel poor, and vulnerable people often being isolated and not part of formal groups) exist in rural areas that require intensive interventions

Condition and nature of rural housing stock (a higher percentage of older, solid wall properties, which are also often larger than average) & lack of access to mains gas impedes quick fixes

Green Deal and Energy Companies Obligation (ECO) Issues >50% of respondents reported low levels of awareness of ECO, and 41% for Green Deal Process is reported as too complex and confusing for both schemes Main barriers to participation in the Green Deal are high interest rates, reluctance to take loan, concerns about impact on sale of property; and for both Green Deal and ECO, mistrust, cost of assessment, and difficulties with treating older properties; some tenants also have worries about rent increases if a landlord improves the energy efficiency of a property.

Main findings Community Energy Schemes (CES) can be of real benefit in reducing carbon emissions, reducing energy costs, and providing a source of finance to communities. However, they are complex projects and require a level of dedication, skills and knowledge that mean they pose some real challenges to community groups. Experience from the ACRE Network members involved in these schemes shows they are also often contentious, and can be the source of real divisions of opinions within communities. The Renewable Community Energy Fund (RCEF) has been promoted by over 80% of the RCCs. Most of this promotion has been passive via newsletters and organisational websites (> 60%); this reflects a general lack of resources to promote more actively. Information has also been shared via social media, partnerships and partner organisations. Only 3 RCCs report offering hands on support with project development. There is little evidence that the fund is being widely promoted by other organisations, with over half the RCCs reporting that the dissemination of information was poor. Concern was also expressed around the amount of promotion at national level, for example, the fund is not easy to locate on the DECC website and a leaflet for the scheme has only just been made available. Promotion appears to be working best through energy partnerships, environmental groups, and some local authorities. When considering the responses from the community to the fund it should be remembered that the fund is not yet well known and that it will be some time before there are any examples of successful projects that have occurred as a direct result of the fund. Generally, RCCs are reporting an unenthusiastic response to the RCEF, with over 80% indicating that overall communities are non-committal about the scheme. There has been very little response to the promotion efforts of the RCCs. At this early stage interest seems greatest amongst groups which were already developing projects prior to the launch of the fund.

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A majority of RCCs did not know of any groups who were considering making an application, although there may be groups who are working independently or with other support organisations that are unknown the RCCs. Of the ten who were aware of groups showing interest in the fund, most reported only one or two groups. An exception to this was in County Durham, where there are six groups developing projects with a view to applying for RCEF money. One of these has already been successful in securing a Stage 1 grant. It is worth noting that all these groups are being supported by a specialist small business, Teesdale Environmental Consulting, providing help with the application and project development. Three of these groups were already working on community energy projects before the fund was launched and the other three were in discussions about potential projects and had contact with the consultant. General low levels of awareness about the fund, the necessity for groups to have already had discussions and made preliminary plans for community energy, and the relatively high level of commitment required of volunteers for these schemes means that a slow start to uptake is unsurprising. RCCs identified a number of potential barriers to accessing the fund:   

Community capacity - with the understanding that the fund and the process places “a big expectation on volunteer time and expertise”. The requirement for volunteers with the necessary time, skills and knowledge (15 RCCs identified this as a barrier) Financial concerns - community groups not accustomed to taking out loans, securing private sector funding, or dealing with relatively large amounts of money.

Overall, groups need relatively high levels of capacity, and to be comfortable with the perceived level of risk, before entering into an application for the fund. The challenges faced by groups interested in developing a community energy scheme should not be underestimated. Volunteers need to have or develop the requisite level of knowledge and skills to develop and manage what is a relatively complex project, and they need to have the time to devote to it - often over several years. They are required to deal with diverse areas including funding applications, planning, land ownership, and financial matters. Most volunteers will need specialist help for all or some of these spanning the whole development stage. Many RCCs recognise this and identify a lack of resources for specialist support work as another barrier. Evidence from County Durham suggests that where this support is available locally this results in increased levels of activity around community energy schemes. Ewan Boyd from Teesdale Environmental Consulting told Durham RCC that “most communities lack the skills to even identify the technical potential in their area, with most projects coming forward when someone in the community wants to 'do something about energy', we get brought in and then start to identify realistic options”. It cannot be assumed that community energy schemes will be universally welcomed by communities, even with the attraction of the potential for financial community benefit. The observation that some technologies are not welcomed by many residents was second only to community capacity as a barrier to developing schemes. This depends on location but wind power, solar farms and hydro were all mentioned as examples of where there has been a

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high level of objections. This can cause disagreements within a community if consensus cannot be reached. Similarly there are many communities where there is little or no interest in developing a scheme and other issues are considered to be of higher importance. “We have particularly seen opposition grow to the solar farms across the county. The reasons for this are varied but three seem to occur on a regular basis. The first is the affect on the visual amenity of an area. The second is the loss of food producing land. The third one is the impact on the rural road network during the construction phase. This is generally a problem as the sites chosen are in the very rural parts of the county where the infrastructure is not designed to deal with HGVs etc.” (Community Council for Somerset). Planning regulations as a barrier were raised by 8 RCCs, and especially in areas with a designation of special landscape value such as Areas of Outstanding Natural Beauty or National Parks. Other barriers mentioned were reluctance to take out loans and to take on a project involving private sector funding, concerns over legal liabilities, land ownership, and competition from commercial interests (agricultural land). Issues 1. Community Energy Schemes are complex projects taking a long time to develop. They involve practices that are often unfamiliar to community groups such as loan finance, private sector finance, high up-front costs, and dealing with various regulations (planning, finance and technological). 2. The necessary capacity to undertake such projects is lacking in many communities. There is a requirement for volunteers to possess high levels of capability in areas such as project development and management, financial management, community engagement and consensus building. 3. There is a widely recognised need for specialist support both in community development skills to bring people together around the issues and in more specialist support in developing appropriate projects. There is a shortage of this support in every area with most RCCs lacking the resources to be able to provide more active promotion and community development support. 4. There is a current lack of consensus in many communities around the desirability of renewable technologies. This highlights the need for more pre-project dialogue and learning to tease out the issues and start to address some of the concerns. Case study More than 20 RCCs provided examples of developing or existing schemes that illustrated good practice in developing community energy schemes. One example that illustrates the potential community benefits from community owned schemes is from Devon: South Brent Community Energy Society Ltd is an Industrial and Provident Society for the Benefit of the Community, owned and controlled by its members. It was established by members of Sustainable South Brent (SSB) to take forward a medium size wind turbine project in South Devon. South Brent is a village and parish on the southern edge of

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Dartmoor with a population of approx 3000. A group of residents formed Sustainable South Brent in response to concerns over climate change and fossil fuel depletion. Inspired by community energy projects elsewhere, SSB investigated the possibility of a locally owned wind turbine that could generate low carbon electricity and provide an income stream to support other local low carbon projects. The potential was explored with the community through a consultation exercise supported by the Community CD and resulting in a revised Parish Plan incorporating a range of ‘green’ actions. A share offer raised £430,000 and SBCES now has 189 members, mostly from South Brent and the surrounding area. The funds raised enabled the society to purchase a remanufactured Vestas V27 turbine. The turbine has been installed and is operational. It is expected to generate up to 400,000kWh/year, enough to power 100 homes, and to save about 200 tonnes of CO2 emissions. Over the next 20 years income from the sale of electricity and the Feed-In-Tariff subsidy will be directed towards local charities and other community organisations to improve the energy efficiency of their buildings. The fund also hopes to support charities committed to reducing fuel poverty. Fuel poverty and oil buying consortia Main findings Rural fuel poverty continues to present hard challenges to RCCs who sometimes seem overwhelmed with the scale of the problem and their lack of resources to respond adequately. More than half the RCCs mentioned the difficulties of reaching rural people in fuel poverty because of their reluctance to self-identify as fuel poor. This is a particular problem in small communities where stigma can be attached to using certain services. Additionally, most vulnerable people tend not to belong to groups and are therefore hard to find. To be effective in these circumstances requires dedicated workers, which is both time consuming and expensive. A lack of funding to provide an adequate level of service was raised directly by 5 RCCS. The large numbers of solid wall ‘hard to heat, hard to treat’ properties was the second biggest barrier identified in tackling rural fuel poverty. There are no quick and easy answers and each property will have its own particular problem, whether this is a planning restriction, a reluctance to cover attractive exterior walls, an unwillingness to face the disruption of installing internal wall cladding, or the additional expense on top of any ECO grant funding available. Some RCCs drew attention to the private rented sector and the difficulties of dealing with landlords, including Estates, where properties are sometimes in very poor states of repair and insulation. Other   

issues mentioned are: the lack of engagement of Parish Councils with the whole issue of fuel poverty, short term and poorly timed funding the high proportion of elderly people in rural areas who can require additional assistance, for example with preparing the property for installation of measures.

Bulk oil consortia

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Many RCCs are now involved in running or promoting bulk oil buying consortia to help reduce the price of heating oil in off-gas areas. This is becoming a success story across the country with evidence of real savings for oil customers. A scheme initially piloted by Oxford RCC was taken on by over 20 others as franchisees and in 2012 they collectively purchased 7 million litres of oil and saved customers £385,000 (compared to average oil prices). Other RCCs are co-ordinating and helping set up volunteer run oil groups across their patch, or running their own scheme independently of the franchise. One runs a completely independent scheme, two run independent schemes in partnership with Anglia Farmers Ltd. (Norfolk and Cambridgeshire), and one is currently setting up a new scheme in partnership with a local council (Humber and Wolds RCC). Membership of the 24 schemes varies from 15 to 2,300, with the average membership being 326 (excluding the outlier figure of 2,300, which is not typical; the next largest scheme has 1,000 members). There are an unknown number of volunteer run oil groups, some of which have been helped to establish with RCC support. For example, Humber and Wolds RCC helped to set up nine oil groups before embarking on their plans to set up a larger scheme in partnership with East Riding of Yorkshire Council. Action with Communities in Cumbria has also supported groups with guidance and help setting up and notes that these groups can spawn additional community action around energy issues. The main issues identified with volunteer run groups are:    

volunteers may have limited time and capacity to increase membership order less frequently (e.g. quarterly) than the larger groups that are able to offer monthly ordering, some linked to only one local supplier can only be established if there is a willing and able local coordinator.

They are generally thought to be effective, and vary in size from a handful of members, to 500 (Suffolk). Issues 1. RCCs constrained financially in provision of an adequate level of service in helping people in fuel poverty. 2. There are particular difficulties in reaching vulnerable groups in rural fuel poverty. 3. The nature of rural housing poses particular problems and existing technologies are not always acceptable to residents. 4. Rural areas have a high number of households who are not connected to the mains gas network. This leads to higher levels of fuel poverty with limited choices for solutions. Case studies (approaches to alleviation of rural fuel poverty RCCs have developed a variety of strategies to tackle fuel poverty over the past five years and are building up both practical expertise and knowledge of the policy context. However it is unclear which strategies are most effective and it would be helpful to have some rigorous

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evaluation undertaken of the different approaches to provide evidence for future investment. The most common approaches, with 19 RCCs adopting, have involved education and information projects, providing communities with the tools to reduce their energy consumption, improve the energy efficiency of their homes, and understand how to get the best prices for the energy they do use. Six RCCs report utilising their Village Agent (or similar) schemes to disseminate advice and keep a watch on vulnerable households. This is beginning to emerge as one of the most sustainable models, but more research and evaluation would be required to confirm this. In some areas there are schemes targeted specifically at those with health problems run by or with partner agencies. An examples is in East Yorkshire where residents with long term health conditions were given a small amount of free oil or LPG. Many RCCs report working in partnership with local authorities or other agencies on projects to tackle fuel poverty and this is essential to ensure the best use of limited resources. The oil buying groups run or assisted by RCCs have greatly increased the number of households who are able to secure the best prices for their heating oil. Members also benefit by being able to purchase the minimum amount (500L) without any price penalty, and by receiving timely information to enable them to buy when prices are lower whenever possible (RCC schemes). Green Deal and the Energy Companies Obligation (ECO) Main findings Feedback from the RCCs about the barriers to uptake of the Green Deal and ECO produced some strong messages that help to explain the slow uptake of the scheme around the country. “Lack of promotion leading to a huge lack of knowledge and awareness. Variety of different companies and organisations involved at different levels, each with their own agenda leading to a lack of trust/confidence in the scheme. (Action with Communities in Cumbria)” Overall there is a lot of confusion reported about the scheme and many people are still unaware of it. Over half of the RCCs said that there are low levels of knowledge about the schemes and criticised the lack of marketing and publicity. Where people are aware of it, both Green Deal and ECO are considered to be very complex processes and this is seen as a real deterrent to uptake. The key barriers to participation in Green Deal are recorded as:  high interest rate on the loan (there are much cheaper sources of finance available to many)  an unwillingness to take on a loan, which is perceived as taking on (more) debt  concern that because the loan stays with the property this will have a negative effect should the householder wish to sell  a mistrust of the scheme, of assessors, of suppliers/installers

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 the up-front cost of the assessment  a mistrust of the projected savings and a worry that these may not be realised. Other issues mentioned were the practical problems associated with insulating/retrofitting hard to treat homes and the lack of available Green Deal finance. Some specific problems relating to uptake of ECO in rural areas were identified as:  practical difficulties in retrofitting older houses and a resistance to making changes to a property;  the high cost of external cladding which means householders are often required to make a contribution themselves;  oil boilers cannot be replaced under ECO, meaning low income/vulnerable rural off gas residents cannot benefit in the same way as those on mains gas;  rural pride – not wanting to identify as being poor by applying for the affordable warmth element of ECO;  tenants of rented properties may fear rent increases if improvements are made. Rural households are generally reluctant to declare themselves as ‘poor’ or vulnerable which deters them from taking part in schemes which highlight this (Community Council of Staffordshire) Issues The main issues that are impeding the uptake of Green Deal and ECO were identified as: 

A general lack of awareness about the schemes and what they might offer

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The process for accessing the schemes is considered to be too complex, with multiple players and complex criteria

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A certain amount of mistrust has built up around the schemes and providers

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Householders have genuine worries about taking out loans, especially in the current economic climate, about possible negative effects on the saleability of their property, and about whether they will in practice make the projected savings on their energy usage

Case studies In the North East nine local authorities have collaborated in establishing a single gateway to Green Deal and ECO, see: www.warmupnorth.com. In Oxford a not-for-profit organisation, backed by a group of local authorities, has been set up to run Green Deal and promote the use of local tradesmen. This project has not yet been launched. ACRE is running two pilots with British Gas to assess the proposed methodologies of engagement with hard to reach and vulnerable households and the installation of energy efficiency measures. A full assessment of the pilots is due in December 2013.

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