The Prime Minister has made decentralising power a defining theme of his Government, as a means to deliver growth “in every postcode”.
Community energy fits naturally with this agenda: giving local people greater control over energy infrastructure, helping reduce bills and ensuring more of the economic benefits of the energy transition remain within communities. It is therefore not surprising that one of the first energy policy announcements was the launch of Great British Energy’s ‘People’s Power Projects’.[1] The Government response to the Energy Security and Net Zero Committee’s inquiry report into community energy also offers further early indication of how ambition could translate into policy.[2]
Where are we with community energy policy?
On 17 September, the Government announced the first £30 million of funding under its £1 billion Local Power Plan, including a £20 million Community Fund and a £5 million Partnerships Grant.[3] The funding will help community energy groups and local authorities develop community-owned clean energy projects, with the wider plan aiming to support more than 1,000 projects.
Despite this, funding remains a significant barrier to scaling community energy. Commercial-scale projects require substantial capital, specialist expertise and complex legal and governance arrangements. While the Local Power Plan could help address these challenges, the Government has not committed to ringfencing a specific proportion of its funding for community investment in larger renewable energy projects.
From community benefit to community ownership
The Government is exploring a mandatory shared-ownership offer for qualifying new clean energy projects, with a consultation on detailed proposals expected later this year. This could create opportunities for communities to invest alongside commercial developers, moving beyond traditional community benefit funds towards a direct financial stake in renewable generation.
The Energy Security and Net Zero Committee recommended that communities should have the right to purchase a 20% stake in qualifying projects. However, the Government notes that existing powers under the Infrastructure Act 2015 cannot be used to mandate a stake exceeding 5% of total capital costs.[4] The scale and design of any future requirement therefore remain uncertain.
For developers and communities, the challenge will be ensuring that shared ownership is not simply an opportunity in principle, but one that communities can realistically afford to take up. Access to finance, alongside standardised legal arrangements and appropriate technical support, will be critical to translating the Government’s ambition into meaningful local ownership.
Devolution and local economic power
The opportunity extends beyond ownership alone. The Local Power Plan envisages closer partnerships between Great British Energy, local authorities and community energy organisations, reflecting a broader shift towards place-based energy development.
For mayors and local leaders, community energy could become a tool for connecting clean power investment with local economic priorities, including public-sector energy costs, jobs, and investment. The Government has already demonstrated this approach through the announcement that the Warm Homes Plan delivery will be devolved.
There is a risk as power and responsibility for delivery is devolved that outcomes also start to diverge. Businesses should seek to demonstrate to local and national governments the constructive role they can play in informing decision making and how the public private partnership can deliver shared ambitions.
Towards a more local energy system
The next step could be enabling communities not only to own renewable assets, but also to use and benefit more directly from the electricity they generate. The Government is exploring local energy markets and regulatory changes that could make it easier to share locally generated power, although the arrangements needed to enable this remain under development.
Taken together, these developments suggest that community energy could become part of a broader local economic and energy policy, rather than a standalone mechanism for delivering community benefits. For developers, local authorities and network companies, the challenge will be translating this ambition into workable projects. For onshore wind in particular, the forthcoming shared-ownership consultation will be important in determining whether repowering can provide an opportunity for communities to take a meaningful stake in the next generation of existing renewable assets.
A new Government, a new emphasis
Secretary of State for Energy Security and Net Zero Miatta Fahnbulleh MP drew a distinction between national and local control in her speech to Labour Party Conference. For businesses investing in the UK’s clean energy transition, this presents both challenges and opportunities. The challenge lies in engaging meaningfully with communities and supporting them to make informed decisions about developments in their area. The opportunity is for businesses to demonstrate how the private sector can act as a trusted partner, working alongside communities to turn national ambitions for the energy transition into locally supported projects.
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Notes
[1] DESNZ, ‘People’s Power’ projects to give more control over local energy, 17 September 2026, Link
[2] ESNZ Committee, ‘Unlocking community energy at scale’, 16 September 2026, Link
[3] DESNZ, ‘People’s Power’ projects to give more control over local energy, 17 September 2026, Link
[4] ESNZ Committee, ‘Unlocking community energy at scale’, 16 September 2026, Link
