UK government explores mandatory community stakes in energy projects

The UK government is investigating the feasibility of requiring developers to sell a 20 per cent stake in new energy projects to local communities. This move follows recommendations from the cross-party Energy Security and Net Zero Committee, which urged parliamentarians to ensure residents can own shares in renewable generation schemes. The government has partially agreed with these proposals, indicating it is assessing how to utilise existing legislation to grant local individuals and groups a right to purchase stakes at fair market prices.

In its response published on Wednesday, the government stated that it is currently exploring how a mandatory shared ownership offer could function in practice. While the administration expressed a preference for developers to offer such stakes voluntarily, it confirmed it is evaluating the potential use of powers under the Infrastructure Act 2015. Detailed proposals are planned for consultation later this year. The government emphasised the need to maintain investor confidence while ensuring the approach remains workable and proportionate, with the ultimate goal of delivering tangible benefits to communities.

State-owned firm Great British Energy is positioned to play a central role in this initiative. The company is set to launch legal templates and governance documents to guide communities in shared ownership projects with commercial developers. Community ownership is a key pillar of GB Energy’s operations, supported by a one billion pound spending plan from its total budget of 8.3 billion pounds. In February, the firm revealed a local power plan committing to support more than 1,000 local and community clean energy projects. Former energy secretary Ed Miliband previously stated that such plans would enable groups to own and control clean energy, ensuring profits flow into communities rather than to large energy companies. For major offshore wind schemes, these stakes could represent values in the tens of millions, though questions remain regarding the inclusion of generation infrastructure such as battery storage or substations.