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Ministers intend to spend two-thirds less than planned on supporting the development of solar panels, batteries and heat pumps in libraries and community centres around the UK.
Great British Energy, a state-owned company, will spend up to £1bn on its “local power plan” during the current spending-review period, said the Department for Energy Security and Net Zero on Monday.
In the run-up to the July 2024 general election Labour, in its Green Prosperity Plan, said Great British Energy (GBE) would spend £3.3bn over the parliament on the programme, which involves providing loans and grants to community hubs around Britain for clean energy projects.
The local power plan (LPP) forms part of the government’s wider ambition for the country to obtain almost all of its electricity from low-carbon energy sources and for communities to have more control over their power.
The energy security department said GBE’s overall planned capitalisation of £8.3bn had not changed. The sum of up to £1bn allocated to the LPP amounted to the best estimate of what could be spent over the spending review period, it added. The spending review period runs up to the end of the parliament.
The funding amounted to the “biggest public investment in community energy in history”, which would “put wealth and power into the hands of communities”, the department added.
But the decision to scale back the LPP is likely to disappoint some councils and community centres.
In its founding statement in 2024, GBE said the LPP would support the development of up to 8 gigawatts of smaller renewable energy projects. But this target did not feature in its plan published in December.
The energy department said GBE, which was created by the current government and is based in Aberdeen, did not have a specific target for community energy projects but that they would form an “integral part” of GBE’s overall goal of supporting 15GW of low-carbon energy projects by 2030.
Last year, GBE was handed the £2.5bn bill to support planned new small modular nuclear reactors. It has also secured an option to invest £50mn in the Pentland floating offshore wind farm project off the coast of Scotland.
Grants announced as part of the up to £1bn funding for local projects included £40,000 to Broughton Parish Council in Hampshire for solar panels and £100,000 to the Sincil Community Land Trust in Lincoln, for solar panels and battery storage.
GBE chief executive Dan McGrail said the company’s investment would help people “feel the benefit of public ownership with purpose”.