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A community energy project is a renewable energy or energy efficiency project that a community develops, delivers and benefits from. Examples include a cooperative that raises funds to construct a small wind farm, or a community group that organises a bulk buy of solar panels for installation on multiple local households. Community energy is an emerging sector in Australia, unlike in Europe where the sector is established and strong, particularly in Denmark, Germany and Scotland. In 2015, over 2800 community energy projects were operating in Europe compared with fewer than 25 projects in Australia. In 2016, six community energy projects were operating in Victoria. The Victorian Government is encouraging the development of community energy projects as part of its roadmap to boost renewable energy generation in the state.

The Inquiry’s terms of reference asked the Committee to investigate the benefits of community energy projects, how their uptake can be encouraged, whether they can be expanded beyond solar and wind power and how challenges specific to metropolitan projects can be overcome. The Committee spoke with community energy groups, supporting organisations, energy distributors and retailers, and government bodies to review best practice models of community participation in the energy sector in Victoria, interstate and overseas.

The Committee recognises the benefits that community energy projects offer local communities but is also mindful of ensuring that consumer protection and energy security and affordability are not compromised. The implementation of the Committee’s recommendations will help to encourage the uptake of community energy projects in Victoria while also protecting consumers and the efficiency of the electricity market.

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