Draft Suggestions for Community Energy Development

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1 Draft suggestions for DECC further to scoping study The consultancy study on support available to community energy groups has been completed separately and its report is available here. This document has been prepared by CEE (with input from others) to provide our suggestions on how the service referred to in the Community Energy Strategy as the one-stop shop should be developed in the light of the report. Key suggestions: The terminology one-stop-shop should be dropped. The budget should be increased to between [X00,000] and [Y00,000]. The resource should include: A website providing a directory of services; together with signposting to (and in future perhaps rating of) existing support providers; guidance documents; case studies; and template documents. Regional telephone help-lines capable of answering routine questions and putting callers in contact with local experienced community enterprises. A national web-based question-and-answer service, able to respond to specific technical and professional enquiries. A revolving voucher fund providing community enterprises with the ability to make payments to providers of the above support services. This approach could become selffinancing in the medium term. Support for specific projects should focus on the very early stages up to an application for support to the RCEF or UCEF. Further suggestions (budget permitting) Ideally the service should also provide: A network of registered professional advisers able to tailor template contracts to specific requirements and provide affordable advice. Existing peer mentoring support should be consolidated into this scheme (and could be incorporated into the voucher fund approach). Key outputs of the scoping report The scoping study revealed that: There are existing sources of most of the support services required. However in many cases these existing providers are themselves community energy co-operatives, community benefit societies or charities. The first place that emerging community energy groups are inclined to turn for advice is existing local community energy enterprises, which have confronted similar development requirements. The major area where support is felt to be lacking or financially prohibitive is in professional services, especially legal. Page: 1 of 5

2 Assuming a substantial increase in the growth of new community energy enterprises to support growth in line with the Community Energy Strategy, it is unreasonable to expect existing voluntary support providers to continue to carry this burden without compensation. The Shared Ownership Taskforce report Some of these issues are also highlighted in the (soon to be released) report of the Shared Ownership Taskforce. It specifically calls on DECC to: Resource a body / bodies to, for example 1 : Implement a platform where commercial developers can find suitable potential community partners; Develop peer mentoring programmes to scale up and accelerate knowledge transfer into new community energy groups; Develop template contracts to help community groups engage rapidly in shared ownership schemes. Developing recommendations Title The terminology one-stop-shop should be dropped. This would be misleading in light of what can realistically be provided with the budget available, even if increased as we recommend, and in terms of what is now proposed. For the purpose of this document we adopt the less catchy community energy support and advice resource (or sometimes just service ). Others have proposed the more user-friendly Community Energy Sat-Nav. Budget A budget of 100,000 is inadequate. Our proposals herein would lead to the position where this resource can become self-financing over a 3-5 year period. In the interim, a budget of [X00,000] to [ Y00,000] would be required. Primary target audience However large the budget, this service will never satisfy all those who may wish or need to be better informed about community energy. In light of the objectives of the community energy strategy we propose that it is focused solely on the following audiences: New community groups with no previous energy experience; Community energy groups intending to broaden their remit; and Community and transition groups without previous energy experience. The remit should be broad enough to support these groups whether they are undertaking standalone community energy projects or participating in a shared ownership project. We do not, however, propose that the service should be directed to commercial participants in shared ownership projects; and they would therefore need to be supported by others, such as trade associations. This therefore fails to meet the first bullet under the Taskforce requests, though there are entities already providing this service, and the signposting task suggested below can highlight these. 1 Our apologies for their syntax! CESAR_dr1 Page: 2 of 5

3 Recommended elements of the service To meet the various demands, there is a need for a coherent combination of several approaches to the provision of advice and information. Based on the responses received, some of these would best be delivered on a regional basis. (Further good reasons for moving on from the 'one stop shop' nomenclature!) First suggestions on the highest priority services are the following: Signposting of existing information sources There are many excellent sources of information about community energy and related topics already in existence, for those who know where to find them. A comprehensive database listing what these are and where they can be accessed will be invaluable. The key to making this effective will be to include a helpful but brief summary of what each resource covers. There will also need to be an excellent and dynamic indexing system to ensure that users can readily find the answers they need. Where one user might ask "where do I find the money?", another may be searching under "funding" and a third could be looking for "share offers". The survey form and the mapping spreadsheet from the scoping report provide some useful headings which could be used for this indexing. This service can realistically be delivered through a good website. There is a substantial body of work required to collect and collate information and to build it into a website with good indexing and search facilities. There is an equally important body of work required later to maintain the website to ensure that the information remains up-to-date and hyperlinks remain active. In due course budget permitting this service could be enhanced by allowing participants to rate the various service providers this would provide benefits of helping to keep the content up-to-date hands enhancing user participation in the surface. It is anticipated that these would be the subject of DECC procurement contracts. CEE has expressed willingness to host the website, if that were considered appropriate. Regional help-lines The need for community groups to talk to experienced practitioners in their own locality can best be fulfilled through regional networks with contacts in existing community energy organisation. It seems likely that the best way to deliver such a service would be through telephone helplines supported by a simple website. Experienced call handlers would potentially be able to answer a proportion of the enquiries themselves; would refer some callers to the national website above; and refer the remainder to one or two local community energy groups with appropriate expertise. It would be unreasonable to continue to expect these established community energy groups to respond to a large number of enquiries without recompense. We suggest below a voucher scheme which might support this and other resource-heavy services. Our first suggestion (without having consulted any such entities) is that the help-lines might best be delivered by established regional organisations which are already supporting or mentoring community energy entities in their area. CESAR_dr1 Page: 3 of 5

4 Of course some regions don t currently have an active network. These would need to be covered either by a neighbouring group or a national provider, perhaps one of the those administering the signposting resource above or the answering service below. Technical enquiry answering service Beyond the more general guidance and support offered above, some community groups need responses to specific technical, legal or professional questions. An existing voluntary service which currently fulfils this in part is the community energy Yahoo group. Some examples of recent questions this has sought to answer are: We are planning to buy a 1MW solar farm from developers. They have told us they think we will be liable for stamp duty. Is this a correct interpretation? Do you know of any housing associations working with community groups? As a Bencom we are exploring a shared ownership project. How much of the project we need to own to (a) launch a 'community share offer'; (b) be eligible for EIS? Has anyone done a project where they fund lighting upgrades? Just creating share certificates after successful offer. Presumably certificates for under- 16s are in the name of the adult but should they also show the name of the child? We propose that this group, or something similar, is absorbed into and moderated by this service. Much of the onus on delivering responses, however, will still rest with experts from within the community energy sector willing to contribute their time and expertise. Again this could be recompensed through the voucher scheme below. Compensating experts for their contribution (a voucher scheme?) It is clear that much of the best support for community energy groups will come from within the sector. Many of the participants are volunteers, whose livelihood depends on paid employment elsewhere. It is not reasonable to substantially increase the demands on these individuals without some form of compensation. We would suggest that an agreed scale of fees be set for the different aspects of support proposed under this scheme. It is a matter for discussion whether these should be at full commercial consultancy rates or whether most practitioners would be content, or even expect, to contribute at more concessionary rates. There are several ways in which such payment could flow from government to these advisers. Our preliminary suggestion, because many of the community group beneficiaries may not yet be set up to manage cash, is that they could apply for vouchers to cover an agreed level of support services. The community group would select services and advisers and would pay them using vouchers. The adviser would in turn exchange the vouchers for cash through an appointed central agency. With a view to moving this entire service onto a self-sustaining financial basis in the future, the vouchers could take the form of quasi-loan notes, rather than grants. By way of illustration; a community group applies for a voucher for one day s consultancy support. It receives a voucher with a nominal value of 200. It selects an appropriate community energy expert to provide the support required, hands over the voucher, and the expert redeems it for 200. CESAR_dr1 Page: 4 of 5

5 If in due course the community energy enterprise succeeds in completing their project on a viable financial basis. It repays the voucher in the amount of, say, 300. In a fully selfsustaining future, this differential (50% in this example) is sufficient to cover those instances where the project is not completed, and therefore the loan is never repaid. This approach has similarities to the second stage of the Rural Community Energy Fund. Legal and professional support Community groups have found that they are able to secure most of the technical advice that they require from installers and other respective partners. It has been harder to obtain legal and professional advice before the groups have obtained project funding. Even when projects are funded they have often needed to originate contractual documents and business plan projections from scratch. There is a clear case for developing template documents and contracts so that community groups can benefit from previous experience without having to reinvent the wheel. We therefore propose the development of templates to cover such aspects as: Land and building leases; Business plans for the most common types of community energy project; Connection applications and agreements for decentralised electricity projects; EPC contracts for project construction; Asset management, operation and maintenance contracts; Shared community ownership agreements; Share offer and/or crowd-funding support services; and Debt financing arrangements. However there is a danger that the uninitiated might be ill served by using these contracts without the required level of legal and financial expertise. Therefore alongside the template documents themselves, community groups should have access to legal and professional firms capable of tailoring them to the specific requirements of the project. In principle at the early stages of developments, these could also be compensated through the voucher scheme. Peer mentoring There are several existing peer mentoring programs now in operation, of which the Cabinet Office backed scheme has a limited lifetime. We propose that these should be incorporated into the community energy support and advice resource. They too could be extended and in due course become self financing by their incorporation into the voucher scheme. Prioritisation There is a strong case for all of the services proposed above and more. If budgetary constraints prove decisive, an initial suggestion on priorities was given in the summary at the start. CESAR_dr1 Page: 5 of 5