Shaping energy markets through community energy policy

By Will Eadson and Mike Foden

“If you see Sid… tell him!” So went the tagline to the 1986 government advertising campaign for shares in the previously nationalised British Gas: the first step in the privatisation and attempted marketisation of UK energy supply. Three decades later this inescapably political project remains incomplete.

Energy systems are beset by persistent market failures as well as negative social and environmental ‘externalities’. In short, the imagined ‘self-regulating’ market has not materialised. Consequently governments continue to play a central role in both creating and regulating energy markets. This presents a dilemma in countries like the UK, where an ideological commitment to deregulation is confronted by a social responsibility (and electoral imperative) to mitigate the market’s worst effects on people and the planet.

One response has been to enrol other actors and technologies to implement and enact governance at arms’ length. This has notably included making use of ‘community’ across multiple policy domains, including energy.

Using communities to shape energy markets

Our recent article in Geoforum explores just this: how the UK government has sought to use communities to shape energy markets. The article follows two interests: in why, despite 30 years of concerted effort, energy has resisted attempts at marketisation; and, more broadly, in how governments mobilise others to enact national policy.

Our focus was the development and implementation of policies within the UK government’s Community Energy Strategy. We adopted a strategy of ‘zooming in’ on different points within the process, from the development of the strategy itself to the impact of policies on the community energy sector as a whole, on local projects, and finally on the cultivation of energy consumers through community-led projects.

Across each of these sites of intervention it was striking how market imperatives repeatedly came into tension with a range of other logics of action, often just as potent as the governmental desire to marketise energy. The resulting negotiation between market and non-markets logics played out in different ways, but it was consistently observed at multiple sites of focus: we call this a ‘fractal double-movement’, drawing from Karl Polanyi’s classic analysis of the continual interplay between efforts to build a market society and counteracting pressures to ensure social protection.

This approach allowed us to re-appraise seemingly linear attempts to marketise energy: for instance even during the policy making process, we found that both market and non-market logics were advanced within and outside government and the civil service. As such, market/beyond-market pressures cannot be straightforwardly read-off as ‘large companies’ versus ‘civil society’ or ‘state’ versus ‘community’.

Looking at the community energy sector we explored how various market instruments like feed-in-tariffs had shaped the dominant modes of ‘doing’ community energy, with perceptions that there was a shift in focus towards financial returns and less focus on community development. But at the same time feed-in-tariffs and the resultant growth in finance options for community energy had also provided opportunities for community energy projects to subvert or reappropriate market forces in order to meet environmentally and socially oriented goals.

Moving our attention to two specific, community-facing programmes designed to encourage better market engagement among energy users, we found a similarly conflicted story.

One of these schemes focused on collective switching – a kind of bulk-buying club for energy tariffs – with the rationale being that bringing together large numbers of energy users would encourage energy suppliers to offer reduced tariffs. However, appeals to market choice failed to entice energy users to switch supplier, with evidence even suggesting that the more choice energy users had, the less likely they were to act; meanwhile energy companies failed to offer market leading prices.

Yet at the same time, the (primarily) socially-focused local authorities and community groups delivering these market-oriented programmes were able to harness them to achieve their own ends. For instance funding helped local organisations get a “foot in the door” (research participant) to pursue wider and longer-term goals from tackling poverty to carbon reduction, lacking funds to address these concerns directly.

Further, particular governmental priorities were utilised as leverage within organisations to negotiate internal politics: just as national governments rarely speak with one voice, nor do local state/non-state actors. As one representative from a community organisation explained, “I was always saying we need to get projects on energy and everyone was a bit ‘yeah why?’, but now it’s become a real topic.”

Why does this all matter? Well, we think that our research has highlighted three things:

  1. The continual work required to create functioning energy markets and different ways that energy’s specific materialities and social history make it resistant to marketisation; in particular some of the more low-profile work involved in maintaining this vision.
  2. That the work of making energy markets is political. Our analysis reveals contestation between pro-market and pro-social logics recurring at different levels of focus: not just in the arena of formal politics or between state and commercial entities, but within sectors, within organisations, even down to the conflicted priorities of individual actors. Although policy is often treated as an object resulting from strategic decision-making by elite actors, we have highlighted its continuing contestation and negotiation.
  3. That using communities to socially embed energy markets is interesting as a strategy because it simultaneously marketises/disembeds community energy. Community has been deployed to escape the dilemma of needing to intervene without being seen to intervene. While avoiding the overt political confrontation of (for example) directly regulating energy companies, this form of indirect, diffuse intervention through communities instead created a dispersed and devolved set of micro-tensions at different points within the energy system, to be managed locally.

Read our article in full here: Eadson, W. and Foden, M. (2019) State, community and the negotiated construction of energy markets: Community energy policy in England. Geoforum, (100), p21-31. Open access and available online at: https://doi.org/10.1016/j.geoforum.2019.02.006


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