Day 5 of 815 minutes

Day 5: Local Power — GBE and Community Finance

Great British Energy, community finance, and how local energy projects get funded

Think about the school at the end of your street. Chances are it burns through a significant electricity bill every year — money that comes from the local authority's budget, leaves the community entirely, and contributes nothing to the neighbourhood's long-term economic resilience. Now imagine that school had solar panels on its roof, generating electricity that covered most of its own consumption and fed any surplus back into the local grid. The savings would stay in the school's budget. The energy would be locally produced. And the community would own a small but tangible piece of the country's clean energy infrastructure. This is not a thought experiment. It is already happening — in Leicestershire, in Aberdeenshire, in Rotherham — and it is the model at the heart of Day 5.

So far in this course, we have looked at the architecture of public-private capital at scale: the National Wealth Fund de-risking £100 billion of private investment across ten priority sectors (Day 2), Contracts for Difference providing revenue certainty for large offshore wind developers (Day 3), and the FCA's disclosure framework ensuring that capital flows to genuinely sustainable assets (Day 4). Today, we shift register. The focus is on what happens at the other end of the system — in communities, local authorities, and municipal buildings — where the energy transition intersects with questions of ownership, wealth distribution, and local economic development. The institution at the centre of this story is Great British Energy, and the mechanism is its Local Power Plan.

The Daily Brief (5 mins)

The Ownership Gap

On 10 February 2026, Great British Energy (GBE) and the Department for Energy Security and Net Zero (DESNZ) jointly published the Local Power Plan — a strategy backed by up to £1 billion of public funding, aimed at supporting over 1,000 community and local energy projects across the United Kingdom by 2030. The government described it as the largest public investment in community energy in British history. The previous Parliament spent less than £60 million on government community energy schemes across its entire term. The scale of ambition, in other words, represents a discontinuity — not a continuation of existing policy.

The Local Power Plan arrives at a moment of genuine urgency for the community energy sector. The UK currently hosts approximately 1.9 GW of community and locally owned clean energy capacity. Reaching the government's informal target of 8 GW of community and locally owned energy by 2030 would require the sector to roughly quadruple in size within five years — a rate of growth it has never previously achieved. Historically, community energy projects have stalled on three recurring obstacles: access to finance at the early, riskiest stages of development; grid connection costs and queuing delays that can push connection dates to 2028, 2030, or beyond; and a lack of in-house technical and commercial expertise within community groups themselves.

The Local Power Plan is designed to address all three simultaneously. But whether a nationally designed intervention can genuinely accelerate hyper-local projects — each with its own planning context, grid constraint, and community dynamic — is the central tension of today's module.

The Deep Dive (7 mins)

1. GBE's Three Pillars — Where Local Fits

Before examining the Local Power Plan in detail, it is worth situating it within GBE's overall architecture. GBE's Strategic Plan, published in December 2025, organises its activity across three operational pillars.

GBE Offshore focuses on co-development and co-investment in large-scale offshore wind, working in strategic partnership with The Crown Estate and Crown Estate Scotland to unlock seabed areas for new leasing rounds. The Crown Estate partnership has already committed up to £400 million in offshore wind supply chain investment through two targeted programmes. GBE's offshore ambition is framed around a combined pipeline of 20–30 GW of additional seabed leases by 2030, expected to mobilise an estimated £30–60 billion in private investment. GBE works alongside the National Wealth Fund in the offshore space, with both organisations coordinating to avoid duplication of public capital — determining case by case whether GBE or the NWF is better placed to support a given project, or whether co-investment makes sense.

GBE Supply Chain — branded as "Energy, Engineered in the UK" — is a £1 billion programme to rebuild domestic manufacturing capacity for clean energy components. A £300 million Supply Chain Fund launched in late 2025 targets offshore wind and grid infrastructure, supporting manufacturers to expand capacity and remove bottlenecks in blades, turbines, cables, and converter stations. A further £700 million follows in 2026.

GBE Local is the third pillar — and the most structurally novel. Unlike the other two pillars, which operate largely through established financial and industrial relationships, GBE Local must build an entirely new delivery ecosystem from scratch: reaching voluntary groups, parish councils, housing associations, and community energy cooperatives that have never engaged with a national public finance institution before. The Local Power Plan is GBE Local's primary instrument.

2. What the Local Power Plan Actually Provides

The £1 billion commitment is structured as a Capital Toolkit, the full details of which GBE plans to publish in Autumn 2026. The toolkit is designed around three intervention types, matched to different stages of project development.

Emergence and development grants target the very earliest phase of community energy — when a group of residents or a local authority has an idea but no technical capacity to assess its feasibility, secure planning permission, or model a financial case for investors. This is historically the highest-risk and most underfunded stage. GBE's £5 million Community Fund, already operational as of January 2026, has provided early-stage funding to over 60 projects across England — from solar on places of worship in Leicestershire to a solar farm in Wiltshire to heritage building installations in Rotherham. This is the proof-of-concept phase for a much larger programme.

Construction and operation finance — loans and project finance — covers the development-to-operation gap, the point at which a project has passed feasibility and planning but cannot yet attract purely commercial lending because its revenue profile is too uncertain or its scale too small for institutional lenders. This mirrors, at community scale, exactly the de-risking logic the NWF applies to industrial-scale projects: public capital absorbs early risk until the project is commercially bankable.

Local investment funding supports community groups and local authorities in taking equity stakes in larger commercial renewable projects operating in their area — so-called shared ownership. DESNZ is consulting in 2026 on whether shared ownership should be made mandatory for new renewable developments, requiring developers to offer local communities the option to own a portion of the project. This is not yet law, but the direction of travel is clear: the government is moving toward an ownership model closer to Denmark (where 50% of wind power is community-owned) and Germany (where 50% of solar is citizen-owned) than to the UK's historically centralised, investor-only approach.

Beyond capital, the Local Power Plan commits GBE to establishing a "one-stop shop" advisory service — a team of expert advisers providing technical, commercial, and planning support to communities at all stages. GBE has also committed to producing a "Community Energy in a Box" toolkit: standardised templates, shared ownership documentation, planning guidance, and financial modelling tools designed to be accessible to groups without specialist in-house expertise. The GBE model explicitly acknowledges that capital alone is insufficient — the barrier for many community groups is not money, but knowledge.

Mayoral Strategic Authority partnerships are a further channel. GBE has already delivered over £16 million to Mayoral Strategic Authorities in England for renewable energy projects, and more than £21.5 million for community and public sector projects in Scotland, Wales, and Northern Ireland. In Scotland, this has included solar farms on the Isle of Arran and wind projects in Aberdeenshire; in Wales, solar installations at leisure centres and museums; in Northern Ireland, Further Education colleges. The devolved dimension is significant: GBE works alongside the Scottish Government's CARES programme and the Welsh Government Energy Service, recognising that community energy support structures already exist at devolved level and should be complemented rather than replaced.

GBE has also invested £255 million to accelerate renewable energy on public sector estates — enabling over 250 schools, around 260 NHS sites, and multiple military sites to install solar and storage, reducing energy bills and freeing budget for frontline services.

3. The Central Tension — Centralised Institution, Decentralised Ambition

Here is the structural problem the Local Power Plan has yet to fully solve.

Community energy is, by definition, local. Its value proposition rests on precisely the features that distinguish it from large-scale commercial development: community ownership, local revenue retention, place-based decision-making, and the ability to reflect the specific geography, social fabric, and economic needs of a given area. The Outer Hebrides case is instructive — Community Power Outer Hebrides has returned £20 million in revenues to its constituent communities over a decade, and the Stornoway Trust is now taking shared ownership of 80 MW of wind capacity through the Eilean Siar Energy joint venture with the local council. This model works precisely because it has been built by and for a specific community over years of sustained engagement.

GBE is a national institution headquartered in Aberdeen, operating at arm's length from central government, with a mandate to support over 1,000 projects simultaneously across a geographically and demographically diverse country. The risk is that, in standardising its support offer for scale, it loses the flexibility and local embeddedness that makes community energy work. Templates and toolkits are efficient; they are not always responsive to the specific planning context of a rural Welsh valley or the governance structure of a South London housing cooperative.

The grid connection problem compounds this. The end of the Feed-in Tariff in 2019 removed the primary revenue certainty mechanism for small-scale community generators. Since then, community groups have struggled to present a bankable revenue case to investors — particularly for projects above 1 MW, where network operators have been quoting connection dates of 2028, 2030, or later. NESO's grid connections reform, announced in December 2025, prioritised approximately 382 GW of "shovel-ready" projects under a new pipeline system, moving away from the first-come, first-served queue that had accumulated over 700 GW of speculative applications. This should benefit community projects that are genuinely ready to build — but the new regime also requires applicants to demonstrate readiness, which may disadvantage groups at the earliest stages of development, precisely those GBE's grants are designed to support.

DESNZ is working with Ofgem and Distribution Network Operators to specifically address grid connection costs and market access for small-scale generators. But these are regulatory reforms that take time to design and implement, and the 2030 deadline for GBE's 1,000-project target leaves little room for multi-year policy iteration.

Finally, there is the question of GBE's own financial trajectory. The government has set a target for GBE to start making portfolio-level returns from its commercial activities by 2030, with a plan for becoming self-financing in place by that date. Profits are to be reinvested into further clean energy projects. This is a coherent long-term model — but it creates a structural incentive for GBE's commercial pillars (offshore, supply chain) to generate returns that cross-subsidise the Local pillar's more patient, grant-heavy, lower-return activity. If GBE comes under Treasury pressure to demonstrate financial sustainability early, the Local Power Plan — whose projects are small, complex, and slow to generate returns — may find itself crowded out by the more commercially legible offshore and supply chain programmes. The Parliamentary Treasury Select Committee's scrutiny of the NWF's return-versus-risk tension (as covered on Day 2) applies with equal force here: a public institution under pressure to perform financially will, unless explicitly protected, migrate toward safer and larger bets.

The Designer's Corner (3 mins)

Design Challenge: Making Community Finance Legible to Non-Expert Investors

The Local Power Plan creates a specific design problem that sits at the intersection of Day 1's institutional literacy challenge and something new: financial legibility for community participants who are not finance professionals, not institutional investors, and not regulators — they are residents, local councillors, and voluntary group organisers. The question for product designers is: how do you make a community solar co-op's financial model comprehensible, trustworthy, and actionable for a local investor with no financial background?

Problem 1: The revenue uncertainty gap. Since the end of the Feed-in Tariff in 2019, community energy projects have lacked a reliable, long-term revenue floor. A prospective community investor looking at a solar farm in their parish cannot point to a guaranteed strike price (as a CfD-backed offshore wind project can). Instead, they face modelled projections based on assumed future electricity prices — projections the Local Power Plan itself acknowledges are "sensitive to key input assumptions, particularly future electricity retail prices." Presenting uncertain, scenario-dependent revenue forecasts to non-expert users without inducing either overconfidence or paralysis is genuinely hard. Design implication: Build scenario toggles — not just a single projected return, but a range of outcomes under different electricity price assumptions, displayed as a band rather than a point estimate. Label the scenarios plainly ("if electricity prices stay roughly where they are today," "if prices fall as more renewables come online") rather than using percentage probability language that implies false precision.

Problem 2: The aggregation problem. GBE's Capital Toolkit is designed to aggregate community projects into portfolios as they progress through development stages — combining small, individually sub-scale projects into a portfolio large enough to attract institutional capital. This is the right financial engineering logic, but it creates a design challenge: at what point in the aggregation journey does a community investor's stake in "their" local solar project become a stake in a pooled fund managed by a national institution? The shift from community ownership to pooled investment changes the nature of the asset — and the user's relationship to it — in ways that matter for trust and democratic legitimacy. Design implication: Design for transparency of aggregation: show users exactly which projects are in the portfolio their investment supports, with real-time progress updates on each. Do not let the pooling mechanism become a black box. The Day 4 lesson — that disclosure infrastructure is what makes capital allocation trustworthy — applies directly here, at community scale.

Problem 3: The expertise asymmetry. GBE's "one-stop shop" advisory model acknowledges that community groups need human support, not just information. But digital platforms will inevitably be part of the delivery model at scale — and there is a consistent failure pattern in financial platforms that assume their job is to present information rather than to guide decisions. A community energy coordinator in rural Northumberland does not need a dashboard that shows them 47 data fields about their proposed wind project; they need to know what their next three decisions are, who to speak to, and what the consequences of each path look like. Design implication: Structure digital interfaces around decision stages, not data completeness. At each stage, surface only the information relevant to the current decision (feasibility, planning, finance, operation), with a clear prompt to the specific GBE adviser or tool that handles that stage. This is the institutional literacy framework from Day 1, applied at human scale: not an alphabet soup of institutions, but a guided path through them.

Key Terms

Term	Definition
Local Power Plan	GBE's strategic plan, published jointly with DESNZ in February 2026, committing up to £1 billion to support over 1,000 community and local energy projects across the UK by 2030.
Shared Ownership	A model in which local communities are given the opportunity to hold an equity stake in renewable energy projects operating in their area, allowing them to receive a share of the revenues those projects generate.
Feed-in Tariff (FiT)	A government scheme, closed to new applicants in 2019, that provided small-scale renewable electricity generators with a guaranteed per-unit payment for the electricity they produced, giving projects a long-term revenue floor.
Grid Connection Queue	The backlog of energy projects awaiting approval to connect to the electricity network. By late 2025, this had grown to over 700 GW of applications nationally; NESO's December 2025 reform prioritised approximately 382 GW of shovel-ready projects.
Capital Toolkit	GBE's planned suite of financial instruments for the Local Power Plan, comprising emergence and development grants, construction and operation finance, and local investment funding. Full details are expected in Autumn 2026.
GBE Local	The community and decentralised energy pillar of Great British Energy's operations, responsible for delivering the Local Power Plan through direct investment, advisory services, and partnerships with local authorities and community groups.

Sources

Great British Energy / DESNZ — Local Power Plan (February 2026): The primary strategic document setting out GBE's £1 billion commitment, the Capital Toolkit structure, and the vision for 1,000 community and local energy projects by 2030. gov.uk/government/publications/local-power-plan
Hansard — Local Power Plan Ministerial Statement (10 February 2026): The parliamentary record of the Local Power Plan announcement, including opposition scrutiny and cross-party responses on the plan's deliverability and value for money. hansard.parliament.uk
Great British Energy — Strategic Plan 2025 (December 2025): GBE's overarching operational plan, covering all three pillars (Offshore, Supply Chain, Local) and setting out the self-financing target and Crown Estate partnership. gbe.gov.uk/strategic-plan-2025-html
DESNZ / GOV.UK — Statement of Strategic Priorities to Great British Energy (September 2025): The Secretary of State's formal priorities letter to GBE, including the requirement for portfolio-level returns by 2030 and the instruction to work in partnership with the NWF and Crown Estate. gov.uk/government/publications/great-british-energy-statement-of-strategic-priorities
DESNZ — Barriers to Community Energy Projects: Government Response (March 2025): Analysis of the financial, regulatory, and infrastructure barriers facing community energy, including evidence from community energy organisations on grid costs, planning, and lack of revenue certainty post-FiT. gov.uk/government/calls-for-evidence/barriers-to-community-energy-projects
NESO — Grid Connections Reform (December 2025): The National Energy System Operator's announcement of a reformed connections queue, prioritising 382 GW of shovel-ready projects and moving from a first-come, first-served model to a readiness-based system. enlit.world/library/uk-overhauls-grid-connections-queue
Comhairle nan Eilean Siar (Western Isles Council) — Local Power Plan Report (March 2026): A local authority assessment of the Local Power Plan, including the Outer Hebrides shared ownership precedent and the Eilean Siar Energy joint venture, illustrating the community energy model at its most developed. cne-siar.gov.uk