Guest Insight: Written by Grace Millman, Senior Energy Analyst at Regen.
The UK’s renewable energy transition is accelerating, but to maintain public support we must ensure this transition benefits everyone. At Regen, we believe that fairness doesn’t slow progress – it enables us to go further. Wales exemplifies many of these principles through its progressive justice policies. This insight piece examines how community engagement, social value creation and local ownership models can maximise the benefits for communities while supporting the rapid deployment of marine energy.
The need for speed (and fairness)
At Regen, we recognise the need to move quickly to get the UK off fossil fuels. However, we believe that ‘fairness’ doesn’t need to slow us down – instead, it can enable us to go further. Maintaining public support means ensuring that the transition to a clean energy system positively and fairly includes and benefits people and communities. This is especially important for lower-income, disadvantaged or fuel-poor households as we move beyond building turbines and networks to changing gas boilers for heat pumps and moving to more sustainable modes of transport.
Regen’s work focuses on this idea of ‘fast and fair’, with the dual purpose of delivering the essential and rapid decarbonisation of the energy system in a way that enables the benefits to be felt broadly by people from all walks of life, in all corners of society.
Welsh leadership in a just transition
Wales has established itself as a leader in embedding fairness principles into energy policy. The Wellbeing of Future Generations Act (2015) set out an ambitious vision for a healthier, more resilient and equal Wales, and, more recently, the Welsh Government consulted on a Just Transition Framework, establishing a shared vision for delivering net zero changes while addressing current inequalities and avoiding creating new ones.
Empowering Cymuned – the role of marine energy
For Wales, with its extensive coastline, marine energy represents a critical frontier in delivering a just net zero transition. Beyond generating low-carbon energy, marine projects offer significant opportunities for coastal economic regeneration, skills development and infrastructure improvements. The development of ports, maintenance facilities and supply chains can revitalise communities that have experienced economic challenges in recent decades. However, achieving such a transformative impact requires a strategic and collaborative approach, in active partnership with communities and stakeholders.
The power of good engagement
Effective community engagement is vital to the success of any renewable energy project. However, good engagement is not just about speaking to people who are already in the conversation. To fully understand the concerns, opportunities and challenges of local communities, people from typically excluded groups must be brought into the conversation and supported to engage with the development. Early and thorough engagement can help to
empower social groups to build upon local strengths and capacities, improve local participation, take ownership and get involved with the development process, ensuring a wide range of voices and needs are reflected. Well-represented engagement also helps to ensure that the benefits of the project are shared among a more diverse range of people and serve the needs of the community.
Marine energy projects have unique relationships with their host communities. While projects are located offshore and less visually prominent than onshore renewables, they require substantial onshore infrastructure, including ports and electrical substations. This creates both challenges and opportunities for meaningful community engagement, including how to define the community around an offshore project and how to coordinate engagement between multiple developments. These are explored in more depth in Regen’s paper Delivering Local Benefits from Offshore Renewables.
The role of trusted intermediaries
Reaching and representing people in typically excluded groups or communities can prove challenging, particularly for organisations working from a distance. As such, leveraging local actors and organisations can help to ensure those groups are better involved. Trusted intermediary organisations, like community energy groups and fuel poverty charities, are vital components of a decarbonised energy system. In addition to developing projects, they facilitate a just transition by:
· Better identifying and involving excluded and/or vulnerable groups
· Supporting communities through new measures or initiatives
· Advocating for local needs in policy processes
· Channelling community benefits into local programmes and support.
Local authorities and community liaison groups/officers can also play a useful role in linking the needs of communities with renewable energy developers. Social infrastructure like healthcare, is also well placed as a trusted intermediary. For example, Welsh charity Care & Repair Cymru works with multiple hospitals to identify older patients with housing problems and offers free ‘healthy homes’ checks and referrals to available support. However, there is a lack of secure, long-term resources and support for many local trusted intermediaries.
Creating social value from Welsh marine energy
Understanding the social and economic impacts, opportunities and challenges of building the energy transition allows us to design a system that minimises risks and maximises benefits for all. The development of marine energy projects can act as a catalyst for sustainable coastal and regional development. It’s no wonder, therefore, that the concept of social value is increasingly difficult to define when it encompasses such complex geographical, temporal and social considerations and potential.
For marine energy developments, the importance of social value is gaining recognition in major energy policies, including through The Crown Estate’s Round 5 Leasing and the government’s Clean Industry Bonus scheme. However, the definition remains unclear.
Regen’s principles for social value creation
Regen’s work in this area proposes that, rather than seeking a simple definition of social value, it’s more useful to consider it as a set of principles that can be adopted to help developers and stakeholders better understand the potential for creating social value from large infrastructure projects like offshore wind. These principles include:
· Place-based approaches: Social value creation should reflect the distinct socioeconomic and cultural circumstances of different places. The needs of communities vary significantly – where one may prioritise job creation, another may place greater importance on improving housing or supporting local voluntary work.
· Inclusive community engagement: Social value creation should be informed by a diverse mix of local and regional stakeholders. Opportunities and benefits should be extended beyond those living closest to developments and should be created for a wider range of communities, including those already disadvantaged in society.
· Long-term perspectives: The opportunity for social value creation should be carefully considered both during and after project development to avoid ‘boom and bust’ outcomes and mitigate the risk of overreliance on a single industry or project. There should also be a focus on supporting communities to build the capacity needed to maximise the benefits from these developments.
· Beyond compliance: Social value plans should exceed the business requirements of project developers and go beyond regulatory compliance. Social value is much broader than community benefit funding or job opportunities alone, with inherently local implications across the social, economic, geographic and cultural fabric of places.
Ownership models that spread benefits
The acceleration of offshore renewable energy projects raises important questions about ownership and the value these projects bring to local communities. Local, shared and community ownership models place emphasis on distributing the benefits of renewable energy projects more locally and equitably, providing value above and beyond purely commercial developments. These ownership models help to increase support for renewable projects by giving people a more direct stake in their success, building more robust support for the wider net zero mission, and helping to build stronger community capacity, resilience and economic development. Ownership models can also support a more just transition by allowing communities with lower capacity to participate and partner with experienced developers.
Welsh Government guidance defines different ownership models as:
· Local ownership: “A project located in Wales, which is owned by one or more individuals or organisations wholly owned and based in Wales, or organisations whose principal headquarters are located in Wales.” Welsh Government expects all “new energy projects to have at least an element of local ownership from 2020”, including offshore generation.
· Shared ownership: “A project owned by more than one legal entity. Examples exist where the ownership of a project is shared between a developer and a community group, individuals, landowners, or a public sector organisation.”
· Community ownership: “A renewable energy or renewable storage development located in Wales, which is wholly owned by a social enterprise whose assets and profits are committed to the delivery of social and/or environmental objectives.”
Local ownership success in Wales
As of the end of 2023, 900 MW of renewable energy capacity was locally owned in Wales, with twice as many locally owned renewable energy projects installed in 2023 compared to 2022. Welsh Government set an initial target for at least 1 GW of locally owned renewable electricity and heat capacity by 2030, but has since increased this to 1.5 GW by 2035.1 Regen’s planning lead, Rebecca Windemer, sits on the board of the Welsh Government-owned large-scale developer, Trydan Gwyrdd Cymru, which has been set up to help deliver more locally owned projects in Wales.
Overcoming offshore challenges
Offshore projects are typically the most complex to develop and finance, making high levels of local ownership and control difficult. In addition, the governance and financial requirements for the Crown Estate’s leasing rounds typically exclude social enterprises. Therefore, for offshore projects, local ownership may be more passive than in onshore projects, and shared ownership may only be possible through shared revenue options, rather than joint ventures.
Despite these challenges, there are success stories which show how people with local, regional or national interests can be involved in offshore projects. Menter Môn, an established Welsh social enterprise with deep community roots, secured a lease for tidal and wave energy production in Welsh waters, demonstrating that alternative models are possible with the right support.
Conclusion: moving forward together
As we strive for a much-needed speedy transition to renewable energy, it is essential that we better understand the intersection of energy and justice. This ensures that people are brought along on this journey and can participate and benefit in a fair way. The Welsh example demonstrates that, with the right policies, community involvement and ownership structures, we can build an energy system that is both fast and fair. Marine energy, in particular, has an important role to play in revitalising coastal communities that have experienced economic challenges in recent decades.
At Regen, we are committed to continuing this work and sharing best practices across the UK. We are delighted to be contributing to the ‘Empowering Cymuned’ keynote panel at Marine Energy Wales, which will showcase the pivotal role of communities in the net zero transition.
By placing communities at the heart of our energy transition, we can build a more resilient, equitable and sustainable future for all.
1 Figures from Regen’s current analysis for Welsh Government. The 2022 analysis can be found here.