The Role of Local Authorities in Renewable Energy Investment: Getting the Money to Flow
摘要
With three quarters declaring Climate Emergencies, local authorities are seen as key agents in helping to secure the energy transition to meet the United Kingdom Government’s Net Zero commitment. Having already committed significant political credibility, local authorities are now seeking ways to finance or enable local actors, including Small and Medium Sized Enterprises (SMEs) and community groups, to develop Renewable Energy (RE) generation. The research presented in the paper aims to address two key questions: first, by better understanding the barriers in the investment decision-making process, how can local authorities scale up the deployment of RE projects; second, what needs to change to help local authorities and others improve RE investment decision-making? This paper gathers evidence from published research along with data from a survey conducted in 2020 of RE practitioners drawn from the public, SME, and community sectors. The survey identified a similar suite of RE investment barriers to those found in the published literature, irrespective of sector. Both Community organisations and SMEs face difficulties accessing financing because traditional banks are reluctant to lend based on the borrowing organisation’s risk profile. This may be less of a problem for local authorities given that historically they have been considered safe counterparties in financial transactions, although recent as well as long-standing financial pressures may see this position change. Local authorities are now taking on a range of roles in the RE investment value chain to meet local Net Zero commitments. In so doing, councils are encountering new situations where they are taking on more and varied project and investor risks. A key success factor for Net Zero will be how well investors and local actors looking to invest in RE can be brought together in ways that maximise project value.