If integrated into post pandemic recovery measures, community energy’s “vast untapped potential” can maximise socio-economic benefits and local value creation, according to a white paper.
Published by the International Renewable Energy Agency (IRENA)’s Coalition for Action, the paper, Stimulating Investment in Community Energy, explored how governments and financial institutions can accelerate community energy development and realise its benefits, noting how COVID-19 has spurred recovery measures that have the potential to drive a “lasting shift” in the global energy mix.
Community energy, it outlined, can play a considerable role in the recovery, supporting an inclusive energy transition. Potential benefits include adding local socio-economic value through investment, job creation and improved welfare; improved energy security through lower costs and greater price certainty; widened access to renewable energy through citizen-driven innovation; and wider participation in the energy system, expanding awareness and acceptance of renewable energy.
However, a lack of supportive policy frameworks and enabling market environments are among the barriers to mobilising investment, hindering community energy’s growth. It highlighted public support and non-discriminatory access to electricity market and grid as having key roles to play in aiding its development.
It set out a series of recommendations for governments and financial institutions, outlining how to design policies and mobilise finance to scale up community energy investments. These include building awareness and developing a shared understanding of community energy, along with adopting targets and policy designs that value citizen participation and local socio-economic development. Governments should look to establish community energy targets, to fully realise the potential of renewables to achieve broader development goals, the paper stated, as well as consult with community energy representatives to ensure supporting policies are designed to support participation of small and new actors.
It also called for dedicated agencies or one-stop shops to support community energy to be established; to facilitate community access to capital through targeted public finance; to support innovative financing mechanisms and business models for community energy projects and the most vulnerable; to encourage aggregation of and collaboration between community energy projects; and to integrate community energy in energy access and local development programmes.