A UK Labour government should lift £3.3bn cap on ‘local power plan’ and invest in community-owned energy

If elected, a Labour government should end the stagnation of community-owned energy in the UK, says non-profit Common Wealth

The UK opposition Labour party should lift the £3.3bn spending cap on its plans for investment in community-owned energy providers in the event that it forms the next government, argues non-profit Common Wealth.

Labour is expected to win the UK’s next general election, which must be held by January 28 2025, and has been widely criticised over its decision to shelve a £28bn green spending pledge, a course of action Labour leader Sir Keir Starmer blamed on the Conservative government’s management of the economy.

Labour continues, nonetheless, to pledge to set up “GB Energy”, a publicly owned clean energy company, which would provide up to £600mn in funding for local authorities and up to £400mn in low-interest loans every year for communities under its £3.3bn “local power plan”.

In a report published by Common Wealth on April 26, the non-profit called on a Labour government to back community-owned energy.

While renewable energy projects owned by local communities are relatively common in some EU countries, such as Denmark where this is the case for half of its wind energy, growth has stagnated in the UK, says the non-profit. The growth rate of community-owned energy dropped from 81 per cent in 2016-17 to just 2.4 per cent in 2020-21. 

Common Wealth argues that Labour’s local power plan should be “uncapped” and increase investment if there is demand from local authorities and communities. 

The report also calls on Labour to revamp planning rules and limit local residents’ ability to block the rollout of renewable energy projects.

“A public-common model can address resident concerns over project surplus being used to plug holes in local authority budgets, granting investment decisions to democratically constituted boards,” it says.

“Endless bureaucratic queues and anaemic investment have stifled what should be a thriving sector that brings jobs, lower power bills, energy security and voice to every corner of the UK,” says Common Wealth research fellow Nick Pearce. “It is time to take back control by bringing home ownership away from far-off business interests and back to the people who use and produce it.” 

Labour has been contacted for comment.

You can find the full report here.