The community energy sector has a strong track record of delivering substantial social and economic value to people and places across the country – unlocking new revenue for local development, creating jobs, tackling fuel poverty, delivering household decarbonisation and building wider support for the net zero transition.
However, the sector faces distinct grid connection challenges, limiting its ability to scale to meet the UK government’s commitment to realise 8 GW of locally and community-owned energy by 2030. Due to their comparatively limited financial resources, community energy projects can struggle to compete with established commercial developers for connections.
With the Clean Power 2030 pipeline already almost full, it will be challenging for new and repowering community energy projects to connect before the end of the decade.
In Scotland, community generators must also navigate the extremely low Transmission Impact Assessment threshold of 200 kW (or just 50 kW on islands), meaning that even some smaller projects must join the lengthy transmission queue before they can connect, slowing timelines and increasing project risk.
The National Energy System Operator (NESO), the UK government and Ofgem must take urgent action to overcome these challenges so that the sector can deliver this substantial social and economic value at scale as a key component of the wider clean power mission.
We recommend implementing the following changes to unlock the grid for Scottish community energy projects, enabling them to scale to meet the UK government’s critical 8 GW target and the far deeper value on offer:
Solution 1: Designate community energy projects as ‘needed’
The project designation process lets NESO give priority to certain kinds of projects in the connections queue if they can show that they are critical for energy security or system operation, would significantly reduce network constraints and costs for consumers, involve innovative or new technologies, or have unusually long development times. In the short term, NESO and Ofgem should implement a community energy category within the Project Designation Methodology to enable NESO to designate community energy projects as ‘needed’, enabling them to secure a grid connection, as suggested in Ofgem’s TMO4+ connections reform proposals (p. 76).
Solution 2: Ensure consideration of both SSEP and RESP when allocating grid connections
To ensure that regional priorities are reflected, RESPs (which are developed through a bottom-up process) must be a core consideration for allocating grid capacity, enabling Scotland and other regions to progress community energy as a priority. To support this, there is a need for a coordinated process between the SSEP and RESPs (which are still in development) to ensure community energy is made a strategic consideration, in line with UK government targets. This could include establishing separate targets for community energy for each region in the SSEP, for example.
Solution 3: Increase the Transmission Impact Assessment threshold in Scotland to 5 MW where feasible and to 1 MW where it is not
NESO should convene Scottish network operators and community energy representatives to understand current blockers and what is technically feasible to bring the Scottish community energy sector closer to parity with England and Wales. This would then require NESO to raise a Connection and Use of System Code (CUSC) modification to implement.
