Opportunities for Community Energy after the UK Government’s Local Power Plan
The Local Power Plan, published by Great British Energy and the Department for Energy Security and Net Zero in February 2026, signals a step-change in practical support for locally owned clean power. For community energy organisations and councils, it could open new routes to finance, delivery support, and more workable business models—while also setting expectations about what needs to change next.
1. What the Local Power Plan is trying to do
The Local Power Plan (LPP) sets out a national programme to grow local and community-owned clean energy across the UK, with the stated aim that by 2030 every community has the opportunity to benefit from—and in most cases own—a local energy project. The Plan is positioned as part of the wider “Clean Power by 2030” mission, but with an explicit focus on keeping more value (revenues, jobs, decision-making) in the places where energy is generated.
In headline terms, the Plan proposes up to £1 billion of public investment delivered through Great British Energy (GBE), alongside “hands-on” capability building, work to develop repeatable business models, and a set of policy and regulatory changes intended to remove long-standing barriers. GBE has also indicated an ambition to support over 1,000 local and community energy projects by 2030.
2. Current barriers to successful community energy project
2.1 More routes to capital (and a clearer pipeline)
For many community organisations, the hardest step has been moving from a viable idea to a financeable project. There are significant costs involved in a community energy project. There is the initial feasibility, planning and community engagement costs. There are then the grid connection and capital costs of the installation itself. This takes time and resources to navigate. Having a supportive infrastructure available to communities will make a big difference.
The LPP’s proposed “capital toolkit” approach—covering early-stage development funding, construction/operation loans, partnership support and direct investment routes—creates the prospect of a more continuous financing pathway rather than a patchwork of short-lived grant programmes.
That matters because it rewards organisations that can build a credible pipeline: secured sites (or strong options), grid feasibility, a delivery partner model, and governance that can take investment. Groups that have previously stalled at “feasibility study complete” may now find it easier to move into detailed design, procurement and build—particularly where a local authority can help unlock rooftops, land, consents and counterparties.
2.2 “Delivery support” as well as money
The LPP explicitly recognises that funding alone does not overcome the practical barriers faced by volunteer-led organisations: grid connection complexity, procurement, legal structures, financial modelling, community share offers, and long-term operations. GBE’s commitment to hands-on support—through regional advice, access to specialist expertise, and standardised tools/templates—could reduce transaction costs and shorten delivery times.
If implemented well, this is an opportunity to “industrialise” the parts of community energy that do not need reinventing each time (model contracts, governance options, due diligence checklists), while keeping local ownership, participation and benefit-sharing at the core.
2.3 More bankable revenue models (not just grants)
One of the most consequential parts of the LPP is the intention to unlock wider investment by supporting repeatable, self-sustaining business models. That includes work on long-term power purchase agreements (PPAs) with credible counterparties (for example, public sector bodies) and the continued exploration of “local supply” approaches that allow locally generated power to better match local demand.
For community energy, revenue certainty is the difference between a project that can attract low-cost finance and one that depends on intermittent grant rounds. The opportunity, therefore, is twofold: (1) more projects becoming financeable in the first place, and (2) more predictable surplus revenues that can be recycled into local priorities—fuel poverty support, community buildings, skills, or further energy schemes.
2.4 A political window to fix long-standing barriers
The Plan also matters because it frames community and local power as a system-wide delivery route—making it harder for regulators, network companies and market rules to treat local projects as “niche”. The LPP’s stated intent to pursue policy and regulatory changes provides a window to address issues that repeatedly derail local schemes, including: the cost and uncertainty of grid connections, the ability to secure fair export arrangements, and the complexity of routes to local supply and flexibility markets.
Even incremental reforms—clearer connection timelines and queue management, more standardised connection offers for smaller projects, and simpler arrangements for shared ownership—could have outsized impact, because many community schemes are constrained more by process risk than by underlying technical potential.
3. What the Rural Design Centre is doing already
RDC has already developed a proven model of community energy delivery for community buildings. RDC supported the development of Northumberland Community Energy Limited as a prototype for a cooperative approach to community energy. The model has proved successful with over 90 community buildings signed up to the project and 15 buildings having renewable energy and battery storage installed. The team are now working with partners in County Durham to form a sister organisation, Durham Energy Associate Limited (DEAL).
The LPP offers an opportunity to replicate this model in other areas. The process has been substantially refined and speeded up. It took 3 years to get NCEL up and running. So far its only taken fourteen months to get DEAL to the stage where is looking at its first installations later this summer.
RDC and partners are now working on a similar cooperative model that will work for larger scale community energy projects on a regional basis. Many community projects are too big for local and regional funding options and too small for commercial funding. Bringing together a pipeline of these local community energy projects will make them more investible. It will also create savings through collective negotiation with suppliers and the DNO for grid connections.
4. Risks, gaps and the questions the sector will keep asking
The Local Power Plan is directionally significant, but delivery details will determine whether it genuinely broadens participation or primarily benefits the best-resourced places. Key points to watch include: how funding is allocated between community-led projects and other local schemes; how quickly new finance products and support services become operational; and whether smaller, volunteer-led groups can access support without disproportionate bid-writing burdens.
Grid constraints remain a practical limiter in many areas, so the pace of regulatory and network process reform is likely to be decisive. The sector will also look for clarity on how far the LPP will support “whole-system” local energy (for example, storage and flexibility, local energy advice, or links to heat and retrofit programmes), versus focusing primarily on electricity generation.
Conclusion: a moment to turn projects into programmes
For community energy, the Local Power Plan is an opportunity to move from exceptional, hard-won projects to repeatable delivery at scale—backed by a clearer public mandate and new finance and support routes. The organisations that translate this policy moment into a visible pipeline of investable projects, grounded in strong local partnerships and meaningful community benefit, will be best placed to shape what “local power” looks like in practice over the rest of the decade.
If you are part of a community group thinking about developing a community energy project, please get in touch. We’d be happy to have a chat about your project and share our experience.