Community green energy needs 'lighter regulation' to grow

"That is a challenge for us and for any other community trying to do what we did," says Mr Allen. "Electric Ireland has over one million customers. We have just under 1,000 customers. We have to keep it small because of the energy crisis. We had to increase our prices and then just stopped taking on customers until the market settles. But we’re opening up again, taking on new customers.” 

Working for a sustainable future for Ireland and the 2030 emissions-reduction targets, award-winning Community Power purchases clean renewable electricity generated from micro wind, solar, biogas and hydro plants around the country and sells it on to its customers, some of whom are also shareholders in the company.

Established in 2012, Community Power was a natural progression from Templederry Wind Farm; it generates roughly the same amount of electricity used by the town of Nenagh from its two turbines. The ethos of the company is its meaningful ownership structures for communities and individuals in the renewable energy sector. It ensures that any surplus revenue generated remains in the communities, bolstering the local circular economy.

Allen, whose background is in business and finance, has been on a 'sustainable communities' journey for a long time. He is one of the co-founders of the CloughJordan eco-village in Tipperary, where he lives, having been its project manager during the development stage. Allen has been with Community Power since 2016.  “It has been great but it’s a highly regulated area, understandably so.” 

He adds: "There’s this bizarre scenario that we’re in, within the electricity industry whereby geopolitical events and national events can affect electricity prices. That’s because it’s all linked to the price of gas. That’s why it’s so important for us to build more sustainable renewable Irish-generated electricity. It’s why we’re helping and supporting bringing it right back to the community level.” 

 With a staff of just four, Community Power intends to grow but that is linked to growing the business. 

“Going through the regulatory process means that we can supply any customer in the Republic of Ireland. We have customers nationwide, in Galway, Mayo, Dublin, Tipperary. Our prices are competitive at the moment. But that changes. A lot of large utilities can buy an amount of electricity at a guaranteed price for 12 months in advance. That’s how they structure their operation. We’re so small that we can’t access those hedge products. We’re very exposed to what the market does. If market prices are low, we lower our prices to reflect that. But if the market goes up, we have to do the same.” 

 Community Power has two solar farms in Galway and Mayo that are community-owned. 

“They are at an advanced stage. They’re not generating yet. We’ve been delayed by trying to get a grid connection for almost two years. We have a grid offer. We haven’t got the connection yet. We supported those two communities through the complexity of building solar farms. Both of them will be 5 megawatts. It’s approximately twenty acres of land for each of the two solar farms. We hope that the one in Galway will be built in 2024. 

"We can match our generation to supply," he says. "So if we have 5 megawatts, we can build our customer base. That will protect us from fluctuations in the market. Both solar farms will be Irish-owned and community-owned. On their behalf, we will sell the generation from the solar farms to the market. On one side, there’s the generation of power. If you take that on its own merits, you obviously have the cost of the planning and then buying the solar panels. Then there’s the cost of the grid connection. 

"Borrowings have to be repaid over a period of time. The majority of the money for the first six or seven years goes on repaying the capital costs. But after that, you basically are generating income for the local community. This is why we’re so enthusiastic about doing this. A lot of government funding for playgrounds or for local infrastructure is based on matched funding. 

"If a local community has a revenue stream from a generation project, they will actually have money to match the funding to do what they want in their community. They will have revenue from the generation projects. Depending on costs, it will take anything from seven to ten years to pay back the capital costs.” 

 Allen says the biggest challenge is getting the grid connection. 

“Obviously, the grid infrastructure is being upgraded. But with all this renewable energy coming onto the grid, it’s intermittent. It’s not the kind of constant generation that you’d get from a fossil fuel generation project. That causes challenges in keeping the grid stable. But this problem has been solved all across Europe.” 

 Waiting for over two years to get a grid connection is frustrating, says Allen. “Then there’s the actual cost of the grid connection which varies dramatically. If the local area needs an upgrade, the next-generation project on the list has to pay for that full upgrade of the local substation. That could cost €1 million and if a community project is next on the grid, we have to pay for that upgrade. They say we will be reimbursed when our own projects come on stream but it can make the whole business model unviable, based on the cost of the grid connection.” 

 Allen says that the SEAI (Sustainable Energy Authority of Ireland) has been very proactive in setting up SECs (sustainable energy communities). 

“You can get core funding from the SEAI to set up an SEC. The focus in the SECs has been predominantly to retrofit existing buildings and bring energy performance up. There are about 200 or 300 SECs across the country, doing that type of retrofit. But we would be of the opinion that the focus should be on local generation projects. If you have a revenue stream, you can invest in retrofitting buildings and that type of thing. Instead of putting the cart before the horse, the focus should be on local generation with a view to doing retrofits on a parallel basis or once you have a generation project operational.” 

 The way we obtain electricity and how it is generated is going to change dramatically over the next ten years, says Allen. 

“There is a public consultation at the moment called the Private Wire. You can’t run a cable from one building to another at the moment. It’s illegal to do it without getting the ESB network involved. The consultation is pushing to change that. It’s inevitable that it will change, and that will give an opportunity to communities or a local GAA club that has a number of buildings to put solar panels on the roof and to put in, for example, batteries. 

"Then you will have an off-grid solution. That’s what is happening across Europe and that’s why the whole landscape of the electricity infrastructure and how it works will change.”

 Working towards change is Bord na Móna which through its Accelerate Green Programme is helping businesses that are innovative in the sustainable climate solution space. Its ‘Brown to Green’ strategy focuses on the delivery of renewable energy and climate solutions.

However, Allen points out that “we will still have some fossil fuels solutions in the immediate term because while we could have an extremely windy day, supplying 90% of our electricity needs, we won’t have that every day. But I think off-grid solutions, such as microgrids, mini-grids, battery technology and solar wind, are going to have to form part of the overall mix. That potentially will take some pressure off the national grid.”